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HomeMy WebLinkAbout2023-01-26-AC-min 01/26/2023 AC Minutes 1 Minutes Town of Lexington Appropriation Committee (AC) January 26, 2023 Place and Time: Remote Participation: in accordance with “An Act Relative to Extending Certain State of Emergency Accommodations”, signed into law by Gov. Baker on July 16, 2022, communication took place via a Zoom teleconferencing session that was open to the public; 7:30 p.m. Members Present: Glenn Parker, Chair; Anil Ahuja; John Bartenstein; Alan Levine, Secretary; Eric Michelson; Sean Osborne; Sanjay Padaki, Vice-Chair; Lily Manhua Yan; Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio) Members Absent: none Other Attendees: David Kanter, Capital Expenditures Committee At 7:30 p.m. Mr. Parker called the meeting to order and confirmed attendance by roll call. Mr. Levine was enlisted to take minutes and began recording the meeting for the purpose of creating minutes. Announcements and Liaison Reports Ms. Kosnoff announced that an updated White Book, i.e., the preliminary recommended budget, was published earlier in the day and would be in the packet for the January 30 budget summit meeting. Ms. Kosnoff noted that there weren’t many changes in the update, but that the section on the school budget is now included, that corrections were made to the last table outlining the 5-year capital plan in the section on capital projects, and that corrections were made to clarify that a particular program improvement will be financed from the Tourism Revolving Fund rather than the General Fund. Ms. Kosnoff also announced that staff recently spoke with representatives of Lexington’s bond rating agency and that they expect the Town to retain its Aaa rating. The Town is moving up the issuance of bonds for the construction of the new police station to this February due to concern that interest rates could rise over the next year. Ms. Kosnoff said that the interest rate on the police station bonds is expected to be in the range of 3% to 3.25%. Mr. Parker asked Ms. Kosnoff as to what can be done to facilitate sharing of budget information for local news organizations so that they do not need to, e.g., completely retype tables from the White Book or Brown Book. Ms. Kosnoff will consider how to do this. Mr. Parker noted that he had contacted Town staff about problems with the Appropriation Committee pages on the Town web site, but that the problems had not been resolved. Ms. Kosnoff said that she would speak to the staff member who maintains that part of the web site. Mr. Padaki asked that staff update the tables in Wdesk that members of the AC will use in the committee report to the annual town meeting. Review of the FY 2024 Preliminary Budget and Finance Plan Mr. Padaki asked about the changes made to get to the preliminary recommended budget, including, in particular, reconciliation of the school budget. Ms. Kosnoff said that small tweaks to the estimates of revenue and certain items in shared expenses made additional funds available. The revision to shared expenses includes a reduction in the amount for pensions related to the Lexington 01/26/2023 AC Minutes 2 Housing Authority. The gap between the requested school budget and the amount allocated to that budget was cut in half from the previous figure of $710,000. Since the Superintendent has indicated that the need for increased funding for special education is of particular concern, the preliminary budget now proposes that $500,000 to be put into the SPED Stabilization Fund and that $750,000 in available funds be put into a to-be-created Special Education Reserve Fund. The latter fund is permitted by the Municipal Modernization Act. Appropriations into the fund would need to be voted by town meeting, but use of the fund for special education expenses would need to be approved by only the School Committee and Select Board. Any balance left in the Fund at the end of a fiscal year would carry over to the next year. The $750,000 in available funds, i.e., free cash, was previously intended to be used to fund capital expenses. Ms. Kosnoff further noted that $2.6 million flowed to free cash this past fall because the schools did not fully expend previously received circuit breaker funds by a specified deadline, and that it was best to use most of the $2.6 million to support FY 2024 capital expenses and thereby reduce future debt service expenses. Ms. Kosnoff stated that the schools face a number of financial challenges over the next few years including the current year. First, the teachers’ union contract has not been settled. Second, the schools are seeking a way to increase the elementary school week from 4.5 to 5 days per week. There are federal ESSER funds available to do this now, but those funds, coming as a one-time grant, would not be available to pay the increased expenses in future years. Furthermore, many teachers value the half day per week off from teaching and use it to prepare lesson plans, etc. Third, the schools filled 25 new positions so far in the current fiscal year primarily to serve newly arrived special education students – this increase was not planned and affects both the school budget and the shared expenses benefits budget. Fourth, the proposed school budget assumes a rather high amount for salary differentials, i.e., for the decreases in salaries when teachers at the top of the salary ladder retire and are replaced by teachers new to the system. Mr. Bartenstein pointed out that if the operating budgets increase much faster than expected then it may become necessary to reconsider the policy for putting tax revenue into the Capital Stabilization Fund. Ms. Kosnoff agreed and added that if such increases are necessary then all of the set-asides will need to be reviewed. Ms. Kosnoff recommended that the Committee invite school representatives to a meeting to hear their perspective on the proposed budget. In response to a question from Mr. Bartenstein in regard to which bargaining units do not have contracts in place, it was stated that those units include the employees of the Fire Department and Library in addition to the teachers. Warrant Articles for the 2023 Annual Town Meeting Further discussion on this agenda item was postponed to the next meeting. Meeting Schedule Mr. Parker has scheduled AC meetings for each Thursday in February and March. The current authorization to conduct meetings solely on-line expires on March 31. The annual town meeting will be conducted in person. Mr. Parker stated that AC meeting will be all virtual until March 31 and fully in person after that. Mr. Padaki said that the capability to conduct hybrid meetings should be available to accommodate AC members who are ill or on travel and not able to be present at in- person meetings. Mr. Parker noted that the AC report to the annual town meeting should be approved by March 9 and published on March 13 in order to be ready for the start of the annual town meeting on March 20. 01/26/2023 AC Minutes 3 Minutes of Prior Meetings Mr. Parker circulated a draft of the minutes of the meeting of January 11, 2023, earlier in the day, and Mr. Levine had followed up by circulating a revised set. It was decided to postpone approval because of the lack of time to review the draft before the meeting. Mr. Osborne stated that his name should be included in the list of attendees. Adjourn The meeting was adjourned by roll call vote at 8:43 p.m. Respectfully submitted, Alan Levine Approved: February 2, 2023 Exhibits ● Agenda, posted by Mr. Parker