HomeMy WebLinkAbout2008-11-17-SPTM-AC-rptAPPROPRIATION COMMITTEE
TOWN OF LEXINGTON
REPORT TO THE
2008 SPECIAL TOWN MEETING
November 17, 2008
Released November 11, 2008
Appropriation Committee Members-Fiscal Year 2009
Alan M. Levine Chair • John Bartenstein Vice-Chair • Susan McLeish Secretary
Robert N. Addelson (ex-officio; non-voting) • Deborah Brown • Richard Eurich
Pam Hoffman • Michael J. Kennealy • Eric Michelson • Glenn Parker
APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
Summary of Warrant Article Recommendations
2008 Special Town Meeting (STM)
November l7, 2008
Abbreviations: GF =General Fund; EF =Enterprise Fund; CPA =Community Preservation Act
Trust Fund; MF =Mitigation Fund
Ar- Title Funds Funding Committee,
t~cle Requested Source Recommendation
2 Zoning Bylaw, CRO and RO to CD Will be indefinitel
y
95-99 Hayden Avenue,124-128 None n/a postponed
S rin Street
p g
3 Amend FY 2009 Operating Budget $457, 760 GF Approve (9-0)
4 Amend FY 2009 Enterprise Fund
See Text
EF
Approve (9-0)
Bud ets
g
5 Land Purchase -off Cedar Street
& off Hartwell Avenue X186,100 CPA Approve (9-0)
6 Harrington Pre-School Playground $35,135 CPA Approve (9-0)
~ Appropriate to Specified Stabilization a) $216, 750.11
MF
Approve (9-0)
Funds b) $25, 000
Appropriate for Munroe School
8 Feasibilit Stud
y y $35, 000 GF Approve (9-0)
9 Appropriate for Prior Years' Unpaid none n/a No action required at
Bills this time
Page 2 of 15
APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
Contents
Summary of Warrant Article Recommendations .......................................................................................................... 2
Introduction ........................................................................................................................................................................ 4
Warrant Article Analysis and Recommendations .........................................................................................................5
Article 2: Zoning Bylaw, CRO and RO to CD 95-99 Hayden Avenue, 124-128 Spring Street .................. .. 5
Article 3: Amend FY2009 Operating Budget .............................................................................................. .. 5
Article 4: Amend FY2009 Enterprise Funds Budgets ................................................................................. .. 6
Article 5: Land Purchase -off Cedar Street & off Hartwell Avenue .......................................................... .. 8
Article 6: Harrington Pre-School Playground ............................................................................................. .. 8
Article 7: Appropriate to Specified Stabilization Funds .............................................................................. .. 9
Article 8: Appropriate for Munroe School Feasibility Study ...................................................................... 10
Article 9: Appropriate for Prior Years' Unpaid Bills ................................................................................... 11
Appendix A: Revenue and Expense Changes .............................................................................................................. 12
Appendix B: CPA Revenue Update .............................................................................................................................. 14
Page 3 of 15
APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
Introduction
In this report, we give recommendations on those articles to be acted upon at this Special Town Meeting.
Our analysis and recommendations on each article may be found below. We also include pertinent
background information in two appendices. The first appendix presents a table that was prepared by the
Finance Department and Town Manager and staff and gives an overview of changes on both the revenue
and expense side to the current year (fiscal year 2009) budget. The second appendix gives an overview of
revenues received under the Community Preservation Act umbrella.
The Massachusetts Department of Revenue has certified the Town's available funds, also known as free
cash balance, as of July 1, 2008. The certified balance is $5,481,717. The DOR also certified the balances
in the Water Enterprise Fund, the Sewer Enterprise Fund, and the Recreation Enterprise Fund. The Water
and Sewer Fund balances are set forth in the discussion under Article 4 below. The Recreation Fund
balance was certified at $1,258,039. The Assessors and the State have not yet determined a final figure for
new growth for FY 2009, but, as may be seen in the table in Appendix A, the new growth number will be
greater than the figure included in the FY 2009 budget at the 2008 Annual Town Meeting by a minimum of
$7b2,419. The new growth number should be finalized before the tax rate is set in early December.
At this time, it appears that the only impacts on the Town's current fiscal year budget of the worldwide
financial and economic crisis that are known with reasonable certainty will be relatively minor. The
negative impacts to date include very small cuts in State aid to Lexington and modest reductions in the
expected level of local receipts (see Appendix A). Of course, there are likely to be additional ramifications
of the crisis, e.g., reduced revenues and reduced value of the employees' retirement pension trust fund, but
it is premature for Town Meeting to act before we have a good idea of what the real problems might be.
Among the implications, it is likely that the crisis will affect the revenue picture for FY 2010. That will be
addressed next spring at the Annual Town Meeting where it is likely that serious decisions will have to be
made. At this time town officials have been studying budgets in order to be able to react to any further
deterioration in the current fiscal year revenues.
We note that for the articles involving appropriations, the possible sources of funds at this Special Town
Meeting include the General Fund (which for this purpose generally includes the tax levy, other sources of
funds such as state aid and local receipts), the Enterprise Fund, the Mitigation Fund, Free Cash, the
Stabilization Funds, the Reserve Fund, and Community Preservation Act (CPA) funds.
Page 4 of 15
APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
Warrant Article Analysis and Recommendations
Article 2• Zoning Bylaw, Funds Funding Committee
CRO and RO to CD 95- Requested Source Recommendation
99 Hayden Avenue, 124-
128 Spring Street None n/a not applicable
The proponents, i.e., the Beal Companies, have requested that this article be indefinitely postponed; thus
we make no recommendation. Before we received notice of the intent to postpone this article, we were
reviewing the fiscal impact analysis presented by John Connery and Associates on behalf of the
proponents, and we were considering both the scope and nature of a possible recommendation. If the
rezoning is brought to the 2009 Annual Town Meeting, we will build on our work to date and issue a
substantive report at that time.
Article 3: Amend FY2009 Funds Funding Committee
0 eratin Bud et
p g g Requested Source Recommendation
$457,760 GF Approve (9-0)
$134,050 Transfer between line
items; $0 net impact
This article allows an opportunity to make adjustments to the current fiscal year budget appropriated at last
spring's town meeting. These adjustments, detailed below, fall into three general categories: (1) expenses
that are running above budget, i.e., fuel costs; (2) new expenses that have arisen since the budget was
appropriated. i.e., replacement of the kitchen equipment at the COA; and (3) accounting/budgeting
corrections, i.e., transferring funds from the school operating budget to the public facilities budget for
school phone services - now a function of the public facilities department.
With the exception of the transfer between the school budget and the public facilities budget, the funding
source for all of the expense adjustments detailed below is a combination of increased state aid and
additional new growth over and above what was estimated last spring. See Appendix A for details of the
FY2009 revenue adjustments that will be finalized when Lexington's tax rate is certified in December. The
adjustments are:
$ 24,000 increase to 4100 Law Enforcement Personal Services to fully fund the School Resource Officer
position at $48,000. This is a housekeeping measure to reflect the policy for the last two years of
funding this position through the police budget.
$ 8,000 increase to 2400 Public Facilities to fund replacement of kitchen equipment at the COA. This
need was identified during a Health Department inspection this past summer.
$ 50,000 increase to 8210-8220 Town Manager Expenses to supplement the budget for labor counsel
services, bring the total appropriated for this purpose to $79,000. This expense item has run over
budget due to ongoing labor negotiations.
$ 40,000 increase to 7200 Planning Expenses to fund a traffic study for Hartwell Avenue.
Page 5 of 15
APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
$323,758 increase to 4200 Fire/Medical Expenses, 3100-3500 DPW expenses, and 2400 Public
Facilities to supplement fuel budgets, bringing the total fuel budget in those three accounts to
$926,918. The budget for fuel in 4100 Law Enforcement Expenses remains at $88,634. It
should be noted that a $100K increase to the Reserve Fund voted at the Annual Town Meeting
remains available to provide a contingency fund for any other energy overages.
$ 7,500 increase to 8210-8220 Town Manager Expenses to fund the evaluation by an assessment center
of candidate(s) for Police Chief.
$ 4,502 increase to 4200 Fire/Medical Expenses to supplement the $200,000 already appropriated for
purchase of an ambulance (actual bid came in at $204,502). Normally this would be
appropriated under a capital article, but it is being appropriated now under the operating budget
so the ambulance purchase can proceed without further delay.
$457,760 TOTAL to be appropriated from General Fund/tax levy
$134,050 decrease to 1100 Lexington Public Schools for phone service expenses
$134,050 increase to 2400 Public Facilities for phone service expenses
$ 0 TOTAL (transfer from one line item to another)
The Committee unanimously supports this article.
Article 4: Amend FY2009
Enterprise Funds Funds
Requested Funding
Source Committee
Recommendation
Budgets see text EF Approve (9-0)
This article proposes several minor housekeeping adjustments to the appropriations made for the Water and
Sewer Enterprise Funds at the Annual Town Meeting last spring.
Adjustment to Reflect Final MWRA Charges
In January of each calendar year, the Massachusetts Water Resources Authority (MWRA) provides its
member towns with a preliminary estimate of their water and sewer assessments for the upcoming fiscal
year. The Town uses these preliminary assessment figures to establish the MWRA component of the Water
and Sewer Enterprise Fund appropriations at the annual town meeting. In June of each year, the MWRA
completes its budget process and issues final assessments to its member towns. The final assessments are
typically less than the preliminary estimates.
Water and sewer rate-setting for each fiscal year takes place during the late summer or early fall following
the annual town meeting. Since at this point the final MWRA charges have been determined, the Town's
practice has been to set rates in an amount projected to be sufficient to cover the actual, final MWRA
assessments, as well as the other direct and indirect costs of the Water and Sewer Enterprises appropriated
at the Annual Town Meeting. In effect, therefore, the Town raises within this rate structure and pays to the
MWRA each year an amount somewhat smaller than the amount originally appropriated at the annual town
meeting.
The proposed adjustments will reduce the original appropriations made for the MWRA component of the
FY2009 Water and Sewer Enterprise budgets at last spring's Annual Town Meeting to reflect the actual
final assessments. The amounts appropriated at this year's Annual Town Meeting for MWRA water and
sewer charges and the final assessments for FY2009 are as follows:
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APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
A ro riated Final Assessment Chan e
Water $4,623,873 $4,565,881 $(57,992)
Sewer $5,941,401 $5,855,209 $(86,192)
Adjustments to Reserve Funds
Under the state statute governing enterprise funds, G.L. c. 44, § 53F1/2, accumulated surpluses resulting
from the operations of an enterprise fund, referred to as retained earnings or the reserve fund, may be used
either "for capital expenditures of the enterprise, subject to appropriation, or to reduce user charges."
Deficits must be funded with existing reserves or, in the absence of such reserves, made up in the following
year's rates.
At last year's rate-setting, in the fall of 2007, the Board of Selectmen adopted a recommendation of the
Town Manager neither to increase nor decrease the water and sewer rates for FY2008. At that time, it was
anticipated that re-adopting the existing rates would have the following effect on cash reserves, which then
stood at about $2.5 million and $2.1 million respectively, all else being equal: (1) lower the water fund
cash reserves by $362,750; and (2) increase the sewer reserves by $187,000. Accordingly, last year's
Special Town Meeting was asked to, and did, appropriate $362,750 from the Water Enterprise Fund's
reserves to cover the projected deficit. In fact, however, the results of operations in FY2008 proved to be
significantly better than anticipated. The water fund generated a surplus of approximately $450,000 and
the sewer fund generated a surplus of nearly $750,000. One would have expected the certified cash
reserves as of 6/30/08 to have increased accordingly but, for reasons not yet fully understood, the water
fund reserves increased by a much smaller amount to just over $2.5 million, while the sewer fund reserves
increased to approximately $2.7 million. (See table below.)
At this fall's water and sewer rate-setting, the Town Manager advised the Board of Selectmen that
projected costs for the water and sewer funds were up by 10% and 3.3% respectively due, primarily, to
increases in MWRA charges and increases in debt service costs attributable to the Water and Sewer
Enterprise Funds' share (17°Io and 7% respectively) of the debt service costs for the construction of the new
DPW facility. To meet these costs, the Town Manager recommended, and the Board of Selectmen
adopted: (1) a 9.5°Io increase in water rates, projecting a draw of $463,050 on water fund reserves to
mitigate the rate increase; and (2) a 0% increase in sewer rates, projecting that no change in the rates would
generate a small surplus of about $40,000.
Data provided to the Board of Selectmen in connection with this year's rate-setting shows that the Town's
ability to forecast water and sewer usage, and thereby to anticipate revenues and reserve levels, continues
to be substantially better than in the past. Indeed, the use of a rolling average of the previous three years of
consumption data would have predicted with considerable accuracy the actual usage and financial results
experienced in FY2008. The Town has not yet adopted such rolling averages in the rate-setting process,
instead continuing to employ a more conservative set of consumption estimates first adopted three years
ago. These earlier consumption assumptions have consistently underestimated usage and revenue, and
have resulted in steadily increasing reserve balances. (See table below.) The Committee recommends use
of the rolling averages at next year's rate-setting, at which point the Town will have available four years of
reliable consumption data across a range of climatic conditions.
In order to reconcile the FY2009 enterprise fund appropriations for tax-rate-setting purposes, and to
promote transparency in the setting of the Water and Sewer Enterprise Fund budgets, the Special Town
Meeting will be asked to appropriate $463,050 from the Water Enterprise Fund's certified retained
earnings. In effect, this action would ratify the action already taken by the Board of Selectmen during the
FY2009 rate-setting process to draw on projected reserves in order to mitigate the increase in the FY2009
water rates. It should be noted, however, that actual results have consistently proved to be much better than
Page 7 of 15
APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
projected results, and that this appropriation from retained earnings does not necessarily mean that the
reserve funds will actually be used.
The historical growth of, and projected changes in, water and sewer retained earnings (if the usage and
other assumptions employed to set the rates are borne out) are as follows:
Enterprise Fund Reserves
6/30/06 6/30/07 6/30/08 Change
FY07-FY08 Projected Change
FY08-FY09
Water $2,090,334 $2,496,655 $2,537,249 $40,594 $(463,050)
Sewer $ 447, 441 $2,137, 540 $2, 763,179 $625, 639 $0
Total $2,537,775 $4,634,195 $5,300,428 $666,233 $(463,050)
Following up on a recommendation of the Water and Sewer Rate Study Committee in its final report
several years ago, the Town staff has indicated for some time that it plans to develop a reserve policy which
defines the appropriate level of retained earnings to be maintained for emergency purposes for both funds,
and which sets forth guidelines for the use of such funds either to mitigate future rate increases or to
finance capital projects. Such a policy has yet to be adopted. In view of the steadily increasing levels of
reserves, which now represent close to 40% of the annual revenues of each fund, the Committee urges that
such a policy be adopted before next year's rate-setting.
The Committee unanimously supports this article.
Article 5: Land Purchase -
off Cedar Street & off Funds
Requested Funding
Source Committee
Recommendation
Hartwell Avenue $186,100 CPA Approve (9-0)
The CPC is recommending that $18b,100 be appropriated from the Open Space Reserve Fund to purchase
two parcels of land. These two landlocked parcels are owned by the Goodwin family, are contiguous to
town-owned open space, and are on the Conservation Committee's master acquisition list. An attempt to
purchase these 20.5 acres last spring was thwarted by problems surrounding the appraisal of the parcels.
Now that these problems have been rectified, each parcel has been valued at $70,000. Additional costs
incurred to purchase these properties include approximately $46,100 for surveying, filing etc. The
Community Preservation Open Space Reserve has an unencumbered balance of over $1,120,000, and the
Undesignated Reserve has an unencumbered balance of over $6,400,000.
The Committee unanimously supports this article.
Article 6: Harrington Pre-
School Pla round
Yg Funds
Requested Funding
Source Committee
Recommendation
$35,135 CPA Approve (9-0)
This request is for $35,135 to supplement $75,000 of CPA money authorized at the 2008 ATM and
$20,000 of privately raised money. The goal is to construct a handicapped accessible play structure. The
original cost estimate of $95,000, after further consideration, has now escalated to $130,135. The original
and increased project costs break down as follows:
Page 8 of 15
APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
ATM change STM % change
e ui ment & installation 75,000 10,361 85,361 13.8%
site prep 11,000 -6,800 4,200 -61.8%
fencing 4,000 6,400 10,400 160.0%
sidewalk 0 7,174 7,174 unbudgeted
site services 5,000 13,000 18,000 260.0%
contingency 0 5,000 5,000 unbudgeted
total $95,000 $35,135 $130,135 37.0%
It appears that the request fora $75,000 appropriation last spring at the Annual Town Meeting was based
on an underdeveloped cost estimate. Regardless of the reasons, inaccurate cost estimates often lead to later
problems in carrying out capital projects. In response to this situation, both the CPC and the Public
Facilities Department have raised their standards of documentation required to move forward in the future.
We urge all involved parties to invest sufficient time and research in order to develop realistic cost
estimates prior to submitting such projects to Town Meeting for its approval. Such efforts are essential to
protect the integrity and viability of the CPA program and the entire capital investment program of the
Town.
The Committee unanimously supports this article.
Article 7; Appropriate to Funds Funding Committee
S ecified Stabilization
p Requested Source Recommendation
Funds
a) $216,750.11
MF Approve (9-0)
b) $25,000 MF
At the 2007 Annual Town Meeting, four specified stabilization funds were established to replace certain
pre-existing special revenue accounts. Monies in the special revenue accounts, funded by negotiated
payments from developers, had previously been spent without appropriation. In order to comply with
Massachusetts Department of Revenue guidelines, and to make the existence and use of the funds more
transparent, the negotiated payments in question are now subject to appropriation, by atwo-thirds vote of
Town Meeting, into and out of the following specified stabilization funds:
• Transportation Demand Mana~ement/Public Transportation (TDM/PTl Stabilization Fund.
Contains payments negotiated with developers to support the operations of Lexpress.
• Traffic Mitigation (TM) Stabilization Fund. Contains payments negotiated with developers to
support traffic mitigation projects, such as improvements to signals and pedestrian access at
intersections, including funds previously contained in the Avalon Bay TDM special revenue
account.
• School Bus Transportation Stabilization Fund. Supports daily school bus operations, and was
originally funded with $200,000 contained in the Avalon Bay School Bus Transportation special
revenue account.
• Section 135 Zoning By-Law Stabilization Fund. Created to finance public improvements using
monies contributed by developers pursuant to Section 135 of the Code of Lexington.
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APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
Article 7 part (a) would transfer $216,750 into the TDM/PT Stabilization Fund, which funds Lexpress. The
current balance of the TDM/PT Fund is $93 plus a small amount of interest that has accrued on the $93.
The new funds are derived from payments received after the Annual Town Meeting by Starwood Hotel
($200,000), Watertown Savings Bank ($1,750), Avalon Bay ($10,000), 45 Hayden Woods ($4,000), and
Brookhaven ($1,000).
Article 7 part (b) would transfer $25,000 into the TM Stabilization Fund. The new funds originate from a
payment by the Watertown Savings Bank received after the Annual Town Meeting as part of the rezoning
for their new building on Waltham Street across from Brookhaven. The current balance of the TM Fund
(prior to the transfer) is $226,818.93.
We unanimously recommend approval of this article.
Article 8: Appropriate for
Munroe School Funds
Requested Funding
Source Committee
Recommendation
Feasibility Study $35,000 GF Approve (9-0)
The Board of Selectmen held a "summit" meeting with the School Committee, Appropriation Committee,
and Capital Expenditures Committee on July 29, 2008 to discuss the use of the old Harrington School, the
old Munroe School, the White House site and the Muzzey Senior Center. The uses under consideration for
these buildings are school swing-space and administrative offices, asenior/community center, and an arts
center such as the Munroe Center for the Arts.
At the July 29 summit meeting it was determined that additional data and further analysis were required to
understand the needs of the stakeholders and the capacity of each of the four buildings. A task force
comprised of the Town Manager, the Superintendent, the Director and a staff member of the Department of
Public Facilities, along with representatives from the Board of Selectmen, School Committee,
Appropriation Committee, Capital Expenditures Committee, and Permanent Building Committee was
organized to review currently available information, identify what additional information was needed, and
make recommendations. The task force met on September 17, 2008 under the leadership of the Town
Manager.
One of the task force's recommendations was that the Munroe School building be evaluated as a potential
site for asenior/community center. This requires a feasibility study to determine whether the site and the
present building can be reconfigured or redesigned to house such a center. This study should use the same
programmatic data used for the White House feasibility study conducted earlier this year, and once
completed will allow comparison of the two sites. It is important to note that the task force also
recommended that the Town defer moving forward on further engineering/design studies for a
senior/community center at the White House site until the Munroe School feasibility study and the School
Department Master Plan are completed. It is our hope that both the Munroe School feasibility study and
the School Department Master Plan will be completed by February 2009. This schedule would allow the
possibility of decisions on the disposition of one or more of these building -the Munroe School, the White
House, and the Old Harrington School - at the annual town meeting in the spring.
We unanimously recommend approval of this article.
Page 10 of 15
APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
Article 9: Appropriate for
Prior Years' Un aid
p Funds
Requested Funding
Source Committee
Recommendation
Bills none n/a n/a
We have not been informed of any outstanding unpaid bills as of press time.
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APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
Appendix A: Revenue and Expense Changes
The table below, prepared by the Finance Department and Town Manager and staff, gives an overview of
changes on both the revenue and expense sides of the current year (fiscal year 2009) budget. Changes
which affect only the enterprise funds or the Community Preservation Act Trust Fund are not included.
Changes in revenue are summarized in the top half of the table. The second column gives the figures that
were used to set the budget at the 2008 Annual Town Meeting (ATM). State aid is projected to increase as
seen in the second line; that increase is somewhat smaller than anticipated before the recent round of
budget cuts by the State. The estimate of local receipts has been reduced in response to the recent
downturn of the economy.
Expense changes which affect the General Fund are summarized in the bottom half of the table. These will
be authorized through action of the Assessors (snow and ice deficit) and Town Meeting (Articles 3, 8).
Tables are located on the next page.
Page 12 of 15
APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
CHANGES IN FY09 REVENUES TO SUPPORT REVISIONS IN CERTAIN FY09
REVENUE ESTIMATES AND SUPPLEMENTAL APPROPRIATIONS PROPOSED FOR
THE NOVEMBER 2008 SPECIALTOWN MEETING
FY 2009
FY2009 Revised Estimate
Estimated at ATM 11 /06/08 Difference Comments
Property Tax Levy $ 109,181,083 $ 109,943,503 $ 762,419 Increase in new growth
Based on final cherry
State Aid $ 9,670,275 $ 9,963,453 $ 293,178 sheet fi ures
Local Receipts $ 10,156,258 $ 9,668,095 $ (488,163} reductions in motor
vehicle excise, liberty
ride and school rental
fees, and increase in
e-rate reimbursements
Available Funds $ 3,378,168 $ 3,378,168 $ -
RevenueOffsets $ (1,798,686} increase in cherry
$ (1,843,450} $ (44,764} sheet assessments
Other Revenues $ 1,710,887 $ 1,710,887 $ -
Revenues set- $ 2,242,000 $ 2,242,000
aside for non-
recu rri ng
ex enses
Total Revenues $ 34,539,985 $ 135,062,655
Annual Town $ 134,372,857
Meeting
Appropriations
$ 689,798 Revenue available for supplemental
appropriations at the November Special
Town Meeting
to fund the net balance of the FY08 snow
$ 197,038 and ice deficit
$ 492,760 Net balance of revenue available for
supplemental appropriations
PROPOSED SUPPPLEMENTAL APPROPRIATIONS
$ 24, 000
$ 8, 000
$ 50, 000
$ 40, 000
$ 35, 000
$ 323, 758
$ 7,500
$ 4, 502
$ 492, 760
Police Department: School Resource Officer
Facilities Department: Kitchen Equipment for Council on Aging
Town Manager: Labor Counsel Budget
Planning Department: Hartwell Avenue Study
Monroe School Feasibility Study
Fire, DPW and Facilities Departments: Energy Budget supplements
Town Manager: Police Chief Assessment Center
Fire Department: Supplemental Funds for Ambulance
Net balance of revenue available for supplemental appropriations
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APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
Appendix B: CPA Revenue Update
For the past six years, the State Community Preservation Act (CPA) trust fund has provided a 100°Io match
to local surcharge revenues on the first funding round, but there was insufficient revenue in the fund to do
so this year. Instead of 100%, all CPA communities received a first round match of 67.b2%. In addition,
the 71 communities that adopted CPA with the full 3% surcharge received additional funding in the second
round distribution. The percentage match for those communities ranged from 68°Io to 100%. The CPA
legislation calls for the third funding round to be made at the discretion of the Massachusetts Department of
Revenue's (DOR) Commissioner of Revenue, and the decision was made not to proceed with that third
round this year.
This is the first year that the CPA trust is no longer able to sustain the 100°Io match, due to the adoption of
the program by additional municipalities and declining real estate activity. The DOR estimates that in
October of 2009 the first round match will fall to 35°Io. Note that the matching funds are disbursed in the
fiscal year after the surcharge revenues are raised, e.g., the Town receives in FY 2009 the State funds that
match Lexington's FY 2008 surcharge revenues.
Trends in the CPA Matching Fund Program
Fiscal Year
# of
Communities CPA billed
locally
(in millions} Registry
receipts
(in millions)
First Round
Match
FY02 34 $17.85 $41.3 100%
FY03 54 27.16 53.8 100%
FY04 61 30.82 50.5 100%
FY05 82 46.34 37.4 100%
FY06 102 58.67 36.1 100%
FY07 113 68.13 31.9 100%
FY08 127 74.07 27.0 67.62%
FY09 projected 133 80.00 27.0 35%
This decreasing state match will reduce the total of the local surcharge and the matching contributions to
Lexington's CPA Trust fund from $5,112,724 to an estimated $3,868,000 in FY09/10.
Page 14 of 15
APPROPRIATION COMMITTEE REPORT, NOVEMBER 17, 2008 STM
History of CPA Revenue Funds for Lexington
State CPA Trust Fund match*
Fiscal
Year 3% Pro ert
p y
Tax surcharge
First Round
Second Round Surcharge +
matching
funds
% Match
FY07 2,556,362 2,556,362** 5,112,724 100.00%
FY08 2,777,882 1,878,411 49,297 4,705,590 69.39%
FY09*** 2, 847, 000 997, 000 24, 600 3, 868, 600 35.9%
* The Trust Fund matching funds are disbursed around October 15 of the following fiscal year.
** Total of both rounds 1 and 2.
*** All entries on the FY 2009 line are projections.
Legislation has been filed, HB4820, to amend various portions of the current CPA statutes. One section of
the bill would increase the minimum required CPA matching fund level from 5% to 75%. The increased
Registry receipts needed to support the proposed higher minimum payments to communities would come
from increasing the deed filing fee.
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