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HomeMy WebLinkAbout2023-12-14-AC-min 12/14/2023 AC Minutes 1 Minutes Town of Lexington Appropriation Committee (AC) December 14, 2023 Place and Time: Remote participation via a Zoom teleconferencing session that was open to the public; 7:30 p.m.–9:30 p.m. Members Present: Glenn Parker, Chair; Sanjay Padaki, Vice-Chair; Alan Levine, Secretary; John Bartenstein; Eric Michelson; Sean Osborne; Carolyn Kosnoff, Assistant Town Manager, Fi- nance (non-voting, ex officio) Members Absent: Anil Ahuja; Lily Manhua Yan Other Attendees: David Kanter, Capital Expenditures Committee; Deepika Sawhney, School Com- mittee At 7:37 p.m. Mr. Parker called the meeting to order and took attendance by roll call. Ms. Kosnoff was not present at that time but joined later during the meeting. All votes recorded below were conducted by roll call. Announcements and Liaison Reports No one offered any announcements or liaison reports. Review of Draft Warrant Articles for 2024 Annual Town Meeting Mr. Parker walked through the draft list of articles for the 2024 ATM and asked for volunteers to work on portions of the Committee’s report. The resulting assignments were captured on a spread- sheet. There was discussion about whether proposed changes to the Town’s noise bylaw would require a recommendation from the Committee. The article is listed under “General Articles”, and apparently has no explicit funding request. Implementing the proposed changes, including stronger enforce- ment, might require additional staffing, which would ultimately be reflected in the operating budget. Mr. Parker stated that the Committee should limit its recommendations to financial impacts and avoid critiquing policy decisions. For example, a bylaw change that does not have additional fund- ing for enforcement may be perceived as a dubious policy, but its financial impact is limited. Mr. Michelson agreed to look into the article entitled “Authorization for Affordable Housing Trust to seek affordable housing development on a town-owned parcel”, and whether the Committee should report on it. Mr. Parker suggested that the Committee might want to comment on zoning changes related to short-term rentals. Approve Minutes of Prior Meetings Minutes from the Committee meeting on November 30 were approved by a vote of 6-0. Discussion of the FY2025 Budget Mr. Bartenstein stated his concern about the proposed appropriation of $3.2 million to the Afforda- ble Housing Trust (AHT), and whether this was creating an imbalance in the use of CPA funds in the Town. The AHT received $1.5 million in CPA funds at the spring 2023 ATM. 12/14/2023 AC Minutes 2 Mr. Levine noted that a prior proposal to fund the construction of units on Vine St. for affordable housing did not go forward because $5.3 million for six units was seen as too high, and this moti- vated the request for the reconfiguration of LexHAB as a private nonprofit that could acquire and maintain affordable housing at a lower cost. Mr. Michelson suggested that LexHAB would not be prepared to use any funds until the legal ac- tion needed to enable its reconfiguration has cleared the legislature. Mr. Levine stated that the Cary Memorial Library (CML) lower floor renovation is expected to cost about $5.5 million, with $1.5 million to be provided by the Cary Memorial Library Foundation. The CPC allocated its remaining $2.3 million in cash after funding other projects, with the expectation that the Town would appropriate the remaining $1.7 from the General Fund. Mr. Levine suggested that the Committee could debate whether the CPC’s appropriation into the AHT should be reduced in favor of providing more funding for the more imminent CML project, or if the CPC might cover the cost of the CML project using debt. Mr. Bartenstein remained concerned that the annual appropriation to the AHT had risen from $1 million to over $3 million. Mr. Kanter reported that, at the CPC meeting this afternoon, they had confirmed that their intent is to bank the money to fund the future work of the AHT, without any specific plans to purchase prop- erties. Mr. Michelson stated that the estimated balance for the Housing community preservation reserve is around $2.4 million, with another $800,000 coming in this year. This total is close to the proposed $3.2 million CPC appropriation with money that can only be used for affordable housing. Ms. Kosnoff joined the meeting and responded to Mr. Bartenstein’s question about the use of funds for the AHT. She stated that the FY2025 budget appropriates estimated CPA revenue for the com- ing year. Appropriations will support the AHT as well as other requests from LexHAB and the Lex- ington Housing Authority. The CPC request for the AHT will consume the entire balance of the CPA Affordable Housing reserve. The requested funding for LexHAB and the Lexington Housing Authority would come from the CPC’s unallocated funds. Announcements from Ms. Kosnoff Ms. Kosnoff provided updates on several pending issues. Legislation regarding the treatment of opioid settlement funds was passed allowing, among other things, payments from such settlements to be deposited directly into a special revenue fund without appropriation and allowing those funds to be spent without appropriation. The Town will likely ask for a vote regarding the opioid settlement funds this year, and this will help transition to the new process that will no longer require an appropriation. The Finance Department recently filed tax recap information with the State, which will allow the tax rate to be set this week. The federal government provided a clarification regarding time limits on the use of ARPA funds. ARPA funds must be “committed” by December 31, 2024 and spent by December 31, 2026. The clarification stated that in order to be considered “committed”, projects must be under contract by December 31, 2024. This could affect items in the participatory budget for ARPA funds that may be unable to meet this deadline. For example, there is a desire for a dog park, but no site for such a park has been identified to date. 12/14/2023 AC Minutes 3 Mr. Bartenstein asked if there was any need to change the allocation to the Capital Stabilization Fund to balance the FY2025 budget. Ms. Kosnoff replied that the budget was balanced and no change in the allocation would be needed. A couple of changes since the last Budget Summit have somewhat eased the pressure on the budget. The updated assessment from Minuteman Regional High School is significantly lower than ex- pected (by Town staff) for FY2025 by several hundred thousand dollars. The original 8% growth projection for health insurance has also been refined. State GIC health plans have all been updated since last year, and there has been a fair amount of movement of Town staff in and out of plans resulting in updated estimates. As a result, healthcare costs in the prelimi- nary budget have been reduced by a few hundred thousand dollars. The Town is still waiting to see final premium rates from the GIC, which might result in a small additional decrease in the expected level of healthcare costs. The Governor is advocating to set the minimum per-student Chapter 70 aid at $100, over three times the rate of $30 that the Town assumed in its original budget plan. All these changes have resulted in significant increases in the allocations to municipal and school budgets. At the last Budget Summit, the allocatable revenue was projected to increase by 3.7%, but that growth is now estimated at 4.1%. Barring any major unexpected budget issues, the budget should be able to accommodate the financial guideline directing new growth revenue to the Capital Stabilization Fund this year. It may still be necessary to revisit that guideline in the coming years. Ms. Kosnoff stated that negotiations for a potential purchase of land using CPA funds faced con- flicting appraisals. The owner’s appraisal considered the land to be buildable, while the Town’s does not, and there was a drastic difference in the appraised values. The CPC’s Open Space reserve currently has about $800,000 available, and the CPC has already allocated all other available funds, so if the negotiations between the Town Manager and the owner do not arrive at a price within the CPC’s existing capacity, then the purchase will be deferred. Ms. Kosnoff stated that there was no interest in using debt for this purchase, and there is “not a rush to sell the property”. Mr. Parker reminded the Committee that the next meeting will be January 4, 2024, and on every Thursday after that until the week before the start of the Annual Town Meeting. The only exception to that will be the final Budget Summit on Thursday, January 25 at which the White Book will be presented. Adjourn The meeting was adjourned at 8:49 p.m. Respectfully submitted, Glenn P. Parker Approved: January 4, 2024 Exhibits ● Agenda, posted by Mr. Parker ● Report assignments spreadsheet, from Mr. Parker