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HomeMy WebLinkAbout2024-01-18-AC-min 1/18/2024 AC Minutes 1 Minutes Town of Lexington Appropriation Committee (AC) January 18, 2024 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; Anil Ahuja; John Bartenstein; Eric Michelson; Sean Osborne (7:57 p.m.); Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio) Members Absent: Lily Yan Other Attendees: Marilyn Fenollosa, Community Preservation Committee (CPC); Thomas Case, CPC Administrator; Charles Lamb, Capital Expenditures Committee (CEC); David Kanter, CEC; LexMedia At 7:34 p.m. Mr. Parker called the meeting to order and took attendance by roll call. All votes recorded below were conducted by roll call. Announcements and Liaison Reports Mr. Padaki attended his first Recreation Committee meeting as a liaison. Most of the meeting was devoted to discussion of tennis and pickleball issues as well as of Recreation program fees. Ms. Kosnoff stated that a program summary and a list of program improvement requests are in- cluded in the Select Board packet for their meeting next Monday, and that she expected the entire White Book to be released on January 19. Ms. Kosnoff also very briefly reviewed some of the topics that will be covered at Financial Budget Summit III on Thursday, January 25. CPC Appropriation Requests at the 2024 Annual Town Meeting Ms. Fenollosa attended as a representative of the CPC to present the community preservation pro- jects proposed this year under Article 10. Using a PowerPoint presentation, she began by summariz- ing the funding history and future projects anticipated to come before the CPC. She stated that debt service for the renovation of the Cary Memorial Building will be fully retired in FY2025, and that larger requests are expected for recreation projects in the years following FY2025 in anticipation of many fields becoming unavailable during construction at Lexington High School. She noted that Community Housing has seen less funding than other types of projects in recent years, but that will be changing with the creation of the Affordable Housing Trust and with new projects at LexHAB and the Lexington Housing Authority. Ms. Fenollosa observed that the state funding match hit a peak in 2022 and has declined since then. The state did not have a surplus available to augment CPA funds during FY2024. The recent statewide decline in home sales and mortgage refinancing activity has lowered the revenues used for the CPA funding match. This year, FY2024, the state matching rate is only 21%, and the rate in FY2025 is predicted to be about 15%. The funding available for CPA projects in FY2025 is roughly $11.6 million, which includes approx- imately $3.5 million from the current balance, $7 million in estimated local tax surcharge revenue, $940,000 in state matching funds, and $150,000 in interest income. Ms. Fenollosa explained that the 1/18/2024 AC Minutes 2 state match is calculated by applying the matching rate to the prior year’s surcharge revenue. If all CPA requests are approved, the ending balance will be approximately $2.3 million, which conforms to the recommended policy of keeping about $2 million in reserves. Ms. Fenollosa then explained each request for funding from the CPC under Article 10 using a slide deck. Article 10(a) Cary Memorial Library Renovation The renovation of the Cary Library lower level including the Children’s Room has a total cost esti- mated at $5.5 million. Of this, $1.5 million would be raised by the Library Trustees , $1.7 mil- lion would come from the General Fund, and $2.3 million from CPA funds. Mr. Padaki asked about the age and status of the current HVAC system. Ms. Fenollosa did not have an exact answer but thought that a new HVAC system for the building was installed 20 years ago during a major renovation to the building. Mr. Bartenstein asked whether the HVAC system had un- dergone significant maintenance since it was installed. Mr. Parker asked about the expected lifetime of an HVAC system. Ms. Fenollosa did not know, but Mr. Padaki suggested that 20 to 25 years would be normal. Mr. Parker noted that HVAC technology has changed dramatically over the past 20 years with new eco-friendly coolants and updated requirements for plumbing. Mr. Lamb re- sponded that the library’s HVAC system will not likely reach its expected lifetime. Article 10(b) Archives & Records Management There were no questions from the Committee. Article 10(c) Park Improvements – Athletic Fields – Bowman School The Committee had no questions regarding $545,000 to renovate athletic fields at Bowman Elemen- tary School. Article 10(d) Lincoln Park Fitness Stations Equipment There is a request for $160,000 to completely replace fitness stations on the Roberta Lee Fitness Nature Path at Lincoln Park, which were installed 20 years ago. Mr. Michelson asked if there was any other funding available to support the park, such as the trust fund that was established when the fitness stations were installed. Ms. Fenollosa stated that she had not yet received any confirmation of funding from the trust funds, so she had included the full amount in the CPC budget. If the trust funds can provide some or all of the funding, the CPC will reduce the amount it contributes. Mr. Michelson asked about the balance in the trusts. Ms. Kosnoff responded that there are two trusts, the Richard and Jean Kirk Fund apparently had a balance of $732,000 in 2022, and another smaller fund had a balance between $100,000 and $150,000. However, the interpretation of these balances was questioned. The Trustees of Public Trusts have been sent an official letter requesting support for the project, but no one at the meeting was aware of a response. Mr. Parker asked if this matter could be resolved before the project begins. Ms. Kosnoff responded that she would like to get a definitive answer ahead of town meeting. Article 10(e) Park Improvements – Hard Court Surfaces – Valley Road Ms. Fenollosa stated that the Valley Road tennis courts were replaced with asphalt a couple of years ago using environmentally sensitive materials, but the surfaces have already failed. The previous installation carried a 1-year guarantee. This request would fund new surfaces using post-tensioned concrete slabs, which carry a 25-year guarantee. 1/18/2024 AC Minutes 3 Article 10(f) Lincoln Park Field Improvements Ms. Fenollosa stated that the total project cost is $1,810,000, of which $1,145,000 would be covered by CPA funds, and $655,000 by the General Fund. The Town will cover the cost of installing the artificial turf surface, which cannot be funded by the CPA per regulation. Article 10(g) LexHAB Support, Restoration, Preservation, and Decarbonization The request for $482,365 would help to fund rehabilitation and decarbonization efforts at 26 Lex- HAB properties, plus rent subsidies for a small number of low-income tenants. Mr. Levine noted that the first part of therequest would fund approximately one third of the full re- habilitation and decarbonization project, with an additional $400,000 coming from LexHAB and another $400,000 from Mass Save (a collaborative of electric and natural gas utilities supporting en- ergy efficient upgrades). As for the second part of the request, Ms. Fenollosa explained that LexHAB tenants pay 30% of their income towards rent, which does not always cover the full rental cost. LexHAB covers the re- maining cost, so $115,740 from this request would be used for such purposes. The amount is based on projections for rent subsidies needed in the coming year. Mr. Michelson asked if the CPC expects to receive a single request from the Affordable Housing Trust (AHT) for all community housing projects in the future, or if the CPC expects also to receive requests from additional agencies, such as LexHAB and the Lexington Housing Authority. Ms. Fenollosa responded that the CPC will most likely continue to receive multiple requests since each organization has its own governance and maintains its own list of properties. Article 10(h) LHA Exterior Preservation This request for $100,000 would fund replacement of siding, windows, and doors at a Massachu- setts Avenue duplex owned by the Lexington Housing Authority (LHA). There were no questions from the Committee. Article 10(i) Affordable Housing Trust Pre-Funding The AHT has requested $3.2 million in funding for “acquisition, holding, and other affordable hous- ing costs, hiring of consultants to prepare RFPs, preparation of housing needs assessments, etc.”. An earlier AHT projection indicated that it could receive requests for up to $8.3 million in such costs during FY2025. There was a discussion about oversight of the AHT, and how it is being held accountable for its spending. Ms. Fenollosa noted that there are some checks and balances in place, such as having a Select Board member serve on the board of the Trust and having the Town finance staff manage the accounting for the Trust. Mr. Padaki asked if Town Meeting would receive a report on the activities of the Trust each year. Ms. Fenollosa said the CPC requires annual updates from all the organizations they fund. She ob- served that the current request was signed by the Select Board and by Carol Kowalski on behalf of the Land Use, Housing, and Community Development department, which have insight into this re- quest and support it. Mr. Parker stated that Elaine Tung, Director of the AHT will be attending the Committee’s meeting on February 8. Ms. Fenollosa encouraged the Committee to ask about specific spending plans for the AHT in FY2025. 1/18/2024 AC Minutes 4 Ms. Kosnoff reiterated that the Finance department staff keeps the books and performs the account- ing for the AHT, and that the CPA requires tracking and financial reports on all funded projects, and that the AHT will have grant agreements in place for any CPA-funded projects. The current request can be seen as seed funding to help launch the AHT’s work. The AHT is currently in the exploratory stage for a couple of projects, including a request under Ar- ticle 33 (Authorize Affordable Housing Trust to Seek Affordable Housing). It will be difficult to pro- vide an itemized budget while key approvals from Town Meeting are pending. Mr. Bartenstein suggested that an annual report on spending by the AHT should be presented to Town Meeting, and Ms. Kosnoff responded that her staff could provide that information, but it could not speak to the deeper issues of how the AHT decides to do its work. Mr. Parker responded that the AHT has not been in operation long enough to have any activities to report on. Article 10(j) Projected Debt Service The current request for $681,200 will close out the debt service for the Cary Memorial Building up- grades. An additional $2 million in debt was previously authorized for renovating Munroe Center for the Arts as part of a $6.6 million project. Ms. Kosnoff stated that the project is currently focused on de- sign and value engineering, so it will not be necessary to issue any debt in the coming fiscal year. Mr. Levine asked if the project had received bids exceeding the prior appropriation. Ms. Kosnoff replied that the Center had not yet put out a bid out for construction. After refining the original con- struction estimates using design and construction documents, the Center determined that the initial design proposal was too expensive. The current design and engineering is intended to bring the cost within the originally approved budget. Article 10(k) Administrative Budget Ms. Fenollosa stated that the request for $150,000 would cover administrative costs for the coming year, including administrative staff, legal expenses, land appraisals, and land planning. Mr. Michel- son asked if he could see a history of administrative expenses for the CPC. Ms. Kosnoff stated that the primary expense for the CPC is a single staff member, with occasional land appraisals, and other minor expenses. She suggested that the information might be available in the report of the Capital Expenditures Committee. Ms. Fenollosa located the information for prior years up to FY2022 and offered to send it to Mr. Michelson. Mr. Lamb complimented Ms. Fenollosa and the CPC on the publication of a 5-year capital plan, but noted that the total of $48 million in potential requests exceeds the projected $40 million in pro- jected revenue. Mr. Bartenstein asked about the projected CPC funding for affordable housing set forth in the slide deck, which jumps from $3.2 million in FY2025 to $6.5 million in FY2026. Ms. Fenollosa re- sponded that the projections were based on information from the Affordable Housing Trust and the Office of Economic Development. Ms. Fenollosa stated that she would research questions from this meeting and send what she could find to Mr. Parker to share with the Committee. Review of Warrant Articles for the 2024 Annual Town Meeting Mr. Padaki asked when the Committee would start voting on article recommendations. Mr. Parker responded that he would like to have some draft article writeups available that summarize the posi- tion of the Committee before formal voting but would be amenable to early straw votes if that 1/18/2024 AC Minutes 5 would be helpful to the authors. He asked if there were any projects in Article 10 which might not receive unanimous support. Mr. Bartenstein suggested that Article 10(d), the fitness path, was an area of concern because of the possibility that funding may be available from a trust fund. Mr. Pa- daki stated that he would like some confirmation that the Affordable Housing Trust would be providing annual reports before moving ahead with Article 10(i), prefunding for the AHT. Mr. Bartenstein asked Ms. Kosnoff if the usual data on participation and spending on the senior ser- vices program (Article 6) could be provided. Ms. Kosnoff replied that she has the dollar amounts but suggested that he contact the new Senior Services Director, Dana Benkelman. Mr. Parker stated that he had prepared a template for the Committee’s report in Wdesk, and that it was ready to receive content from the Committee. He added that he would need to discuss data link- ing for the report with Rosalyn Impink, the Town Budget Officer. Committee Member Participation in Local Elections Mr. Bartenstein inquired about expectations of Committee members with respect to participation in local elections. In the past, the Committee had a policy which encouraged members to avoid en- dorsements and other public displays of support for candidates. The rationale for this was that the Committee desires a good working relationship with whomever is ultimately elected. Mr. Parker re- sponded that. based on legal precedent established by the state Supreme Court, we are not permitted to impose any conditions that would limit the free speech of members. Mr. Bartenstein noted that personal expressions of support should not refer to a member’s service on the Appropriation Com- mittee, which Mr. Parker agreed was still Committee policy. Mr. Michelson added that participation by a Committee member as an officer in a campaign would still be strongly discouraged. Minutes of Prior Meetings Minutes from the Committee meeting on January 11 were approved by a vote of 7-0. Future Meeting Discussion Mr. Parker stated the Committee will be participating in a joint meeting at Budget Summit III on Thursday, January 25, starting at 7:00 p.m. Mr. Parker stated that Dr. Julie Hackett, School Superintendent, and Dave Coelho will be attending the Committee meeting on February 1, and Suzie Barry is also expected to provide an update on the “Lex250" celebration. Mr. Parker stated that the Committee would aim to publish its report on March 11. He commented that Town Meeting is starting particularly early this year. Ms. Kosnoff stated that, as a result of the early start, Town staff could not commit to publishing the Brown Book in time to take up financial articles on the first night of Town Meeting. Mr. Bartenstein asked that the Committee be notified as soon as practical about the publication schedule for the Brown Book. Ms. Kosnoff offered an update on the Select Board’s position regarding the future use of 173 Bed- ford St. as swing space. Previously, the Select Board seemed intent on using 173 Bedford St. as swing space during upcoming construction projects, and the 5-year capital plan had assumed town- owned swing space would be available. Some Select Board members are now contemplating the use of 173 Bedford St. for affordable housing sooner than 2031, which is when it would otherwise be- come available following its use as swing space. As a result, staff have issued an RFP for leasing space, and this remains an open policy issue that could impact the final FY2025 budget. 1/18/2024 AC Minutes 6 Mr. Kanter asked if the amounts to be appropriated into the stabilization funds had yet been final- ized. Ms. Kosnoff replied that the budget was at the point where those numbers could be deter- mined, but the final amount was not yet available. Adjourn The meeting was adjourned at 9:04 p.m. Respectfully submitted, Glenn P. Parker Approved: February 1, 2024 Exhibits ● Agenda, posted by Mr. Parker