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HomeMy WebLinkAbout2024-02-01-AC-min 2/1/2024 AC Minutes 1 Minutes Town of Lexington Appropriation Committee (AC) February 1, 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; Lily Yan (8:00 p.m.); Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio) Members Absent: Sean Osborne Other Attendees: Suzie Barry, Select Board; James Malloy, Town Manager; Dr. Julie Hackett, Su- perintendent, Lexington Public Schools; David Coelho, Asst. Superintendent for Finance and Oper- ations; David Kanter, Capital Expenditures Committee (CEC) 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 There were no announcements or liaison reports. Lex250 Celebration Ms. Barry and Mr. Malloy discussed the current budget plan for the Lex250 Celebration (Semi- quincentennial). Ms. Barry stated that she had discussed the needs for the Town during the celebra- tion with Mr. Malloy, Doug Lucente (Select Board and Lex250 Committee), and the senior staff of the Town’s municipal departments including the Police command staff, Fire command staff, Dept. of Public Works, Dept. of Public Facilities, and the Health Dept. They reviewed the schedule of events, which continues to evolve, and reviewed the events planned for 2024. The full celebration will begin on April 19, 2024, and events are scheduled through July 2026. Ms. Barry asked the staff to consider what additional funding they would need during FY2025 to cover staffing, supplies, and equipment related to Lex250. Ms. Barry also attended a “public safety kickoff” at the MEMA bunker in Framingham to learn more about the preparations that should be made to handle these events. The command staffs of the Lexington Police and the Fire Departments were also represented at the meeting. Ms. Barry noted that Article 24 currently requests $500,000 to support the work of the Sem- iquincentennial Commission. The Commission currently has access to $500,000 in ARPA funds, which must be spent or under contract by the end of December 2024. The Commission also has an earmark of $100,000 of state ARPA funds from Senator Barrett, all of which has already been allo- cated if not spent. The commission expects to receive another $150,000 state earmark from Repre- sentative Ciccolo, which must be spent by June 30, 2024, but the status of this earmark is uncertain. Mr. Malloy stated that the Commission expense budget currently totals $1,013,000, but the availa- ble funding, including the amounts that are expected to be covered by ARPA funds and the upcom- ing request under Article 24 totals roughly $880,000. He is working refining the estimates of the funding of the Town services that will be needed to support the celebration. The timing of various expenses determines which funding source will be most appropriate. Most of the largest expenses 2/1/2024 AC Minutes 2 will be for Town staff overtime outside the allowed spending windows for the ARPA funds and state earmarks, implying they must be funded under Article 24. The total for items that can only be funded under Article 24 is estimated at $563,000. Of that total, approximately $325,000 is overtime for Town employees. Mr. Malloy is trying to reduce the total needed in Article 24 funding to $500,000. Mr. Padaki asked if the currently available funding would be sufficient to cover all the expected costs. Ms. Barry stated that 95% of the current budget covers municipal infrastructure needs, and no funding in that budget has been allocated for event programming, so the Commission will be launching a separate fundraising campaign. Ms. Barry replied that they might also need additional funding due to events that are outside the current scope of the celebration. For example, there is a proposal to invite the Royal Family of England to attend the celebration, which would necessitate much greater security. There is also a possibility that the Town would invite the U.S. President to attend the celebration which may entail additional costs for security. At the MEMA meeting, there was talk about getting a SEAR rating (Special Event Assessment Rat- ing) from the Dept. of Homeland Security for the event. Depending on the rating, this could trigger federal involvement and additional support. This is complicated by the occurrence of the Boston Marathon during the 2025 celebration. Mr. Levine asked who on the Committee was responsible for Article 24. Mr. Padaki confirmed that Lily Yan was currently assigned to draft the report. Mr. Levine asked if Ms. Barry could provide a one-page summary of the Lex250 budget, including all funding sources, previous expenditures, and anticipated future expenses. Ms. Barry asked by what date the Committee would like to have that information. Mr. Parker stated that February 29 was the deadline, and Ms. Barry responded that she would deliver the budget summary by February 25. Timing of Financial Articles at the Annual Town Meeting Ms. Kosnoff noted a concern on the publication deadline for the Recommended Budget and Financ- ing Book (the “Brown Book”), which per our conventions must be available four weeks prior to town meeting taking up financial articles. The goal is to publish the Brown Book by Friday, Febru- ary 16, but it could be delayed a week to February 23 due to as yet unresolved issues in the budget planning, including debt service, state aid, and some capital items. A delay to February 23 would require the Moderator to take up financial articles no earlier than March 27 (town meeting will be in recess on March 25 for Holi). FY2025 Lexington Public Schools Operating Budget Dr. Julie Hackett and David Coelho presented a set of slides on the LPS FY2025 operating budget. Comparing the ongoing FY2024 budget to the recommended FY2025 budget shows a net increase of 4.29%, with salary expenses up 7.15% and other expenses down 10.41%. Enrollment fell from 6,901 in FY2021 to 6,790 in FY2022, bounced back to 6,845 in FY2023, and settled at 6,805 for FY2024. Mr. Coelho interpreted this as a stabilizing trend. Current projections for enrollment show the overall PreK-12 number of students remaining level or dropping slightly over the next three years, but the projections are subject to uncertainties which al- low the possibility of significant deviations from the trend. In the projections through FY 2027, the greatest uncertainty was ±11% for the K-5 enrollment in FY2027. Mr. Coelho noted that the budget for the school system must adapt both to the number of students enrolled, and to the specific needs of those students, particularly for those requiring additional edu- cational support. Based on a review of the current and projected needs, the proposed budget shows a 2/1/2024 AC Minutes 3 net decrease of 8.61 FTEs (full-time equivalents). This is the result of a reduction of 28.53 FTEs for baseline educational needs, combined with the addition of 8.20 FTEs due to enrollment, the addition of 10.73 FTEs from mandates (legal requirements or contractual obligations), and the addition of 1.00 FTE for PE/Health. In the enrollment category, eight of the FTEs are system-wide unallocated slots held open for unpredictable shifts in enrollment. Mr. Bartenstein asked for the current total FTEs in the school system. The following slides showed 1,232 FTEs for teachers, part of a total of roughly 2,260 FTEs for FY2025. Mr. Bartenstein com- mented that the trend over the past ten years has been a steady increase in FTEs, and he asked what was driving that trend. Dr. Hackett stated that special education was the primary driver, combined with in-migration, meaning families moving into the system. Some children arrived with little or no formal schooling or they have significant disabilities, and thus require intensive support. There are also 30 new immigrant families with children who are being sheltered in Lexington, again with lim- ited exposure to formal schooling. Mr. Bartenstein asked if the growth in the number of FTEs would start to level off at some point. Dr. Hackett responded that she is concerned because, for example, one existing special education program has grown so much that it had to be split into two different sites. The program is now full, but more children who require special education services continue to arrive. Mr. Bartenstein asked if special education is outpacing the overall growth of the school operating budget. Dr. Hackett agreed and asked Mr. Coelho to confirm it. He stated that roughly one third of the operating budget goes to special education programs now, and that it is growing, but he would need to examine the budget history to properly capture the trend. Dr. Hackett stated that the school system has reduced funding in areas where it made sense, such as the middle school team sizes, which were smaller during the pandemic and have now been enlarged, resulting in a reduction of 7 or 8 FTEs at Clarke and Diamond Middle Schools. She also noted that the system attempts to place existing staff whose positions are eliminated into newly created posi- tions. Mr. Padaki asked if the school system still published a more detailed enrollment projection chart. Mr. Coelho responded that the budget document contains a detailed “cohort survival” chart. Mr. Levine asked about the projected reduction in special education FTEs for FY2025. Mr. Coelho responded that the reductions were the result of transitions, e.g., to higher grade levels, or students exiting the school system. Mr. Levine asked if it was fair to say that the quality of special education services has not been reduced, but the number of staff required to provide those services in the com- ing year is lower. Mr. Coelho agreed. Mr. Levine noted that this was a reversal from the overall growth trend over the 5 or so years. Mr. Coelho agreed, adding that the school system had added a lot of special education staff in FY2023 and FY2024, and that it was possible to reduce some staff while maintaining service levels. Dr. Hackett added that she fully expected those staffing levels to change due to new arrivals. Mr. Coelho presented a chart giving a breakdown of staffing changes by bargaining unit. Mr. Bar- tenstein commented that different FTEs will have different costs in the budget. Mr. Coelho agreed, saying that each employee’s salary depends on classification, years of service, and experience. Mr. Bartenstein suggest that special education aides are probably at the low end of the salary scale, so adding more of them has a lower impact than adding senior teachers. Mr. Coelho agreed but noted that benefits were not affected by pay level, and benefits impact the Town’s Shared Expenses budget. 2/1/2024 AC Minutes 4 Ms. Kosnoff observed that Mr. Coelho’s slide shows school staff growing by 51 employees during the current FY2024 budget year. She expressed concern that the benefits expenses, at roughly $18,000 per eligible employee, from this growth may not have been fully accounted for in the FY2024 Shared Expenses. She offered to discuss this matter later with Mr. Coelho. Mr. Coelho concluded with a summary slide showing risks and unknowns for the school budget that included state Chapter 70 aid, expiration of ESSER and ARPA funds, state Circuit Breaker reim- bursement rates, federal 94-142 grant aid, the lingering impact of Covid-19, unanticipated enroll- ment changes, two recent years of relatively high inflation, and declining end of year turn-backs from the school system. The hope is that Chapter 70 aid will be increased by $60 per student. Any positions that relied on ESSER or ARPA funds will have to be re-evaluated and maintained through an alternate source of funds. For the state Circuit Breaker, the FY 2025 budget assumes a 75% reim- bursement rate. That is the rate for the current school year, FY 2024, which translates to $5.9 mil- lion in reimbursements for special education costs. Federal grant support is expected to hold steady. The long-term impacts of social isolation during Covid-19 have required more social workers and more counseling time for students. Dr. Hackett stated that they made about $2.5 million reductions in expenses, which make up about 14% of the budget, with the remaining 86% for staffing. Mr. Coelho stated that the FY2025 budget responds to recent inflation with a 3.5% increase for ex- pense accounts, which covers supplies, materials, and books for students. In FY2024, expense ac- counts were held flat. He stated that with the limits on funding, they would focus on support for staffing, and there would be smaller turn-backs from the school budget. Mr. Michelson asked Mr. Coelho to provide more detail on the $2 million reduction in the expense budget. Mr. Coelho stated that much of the budget reduction was achieved by better analyzing the potential need for special education tuition for current in-district students that may need to transition to out-of-district programs, better analyzing use of the Circuit Breaker and grants, and examining other special education expenses including transportation. He noted that the Special Education Re- serve Fund and the Special Education Stabilization Fund provide a backup in case special education expenses increase much more than the expectation. The remaining reductions came from trimming four accounts, K-12 curriculum, finance operations, superintendent’s line items, and human re- sources, which have often reverted funds back to the Town at the end of the fiscal year. Mr. Michel- son asked why these reductions were not made sooner. Mr. Coelho responded that, since he started five years ago not long before Covid-19, this was the first year when he could devote time to in- depth analysis of the school system’s spending. Mr. Levine asked about the rising enrollments at the Lexington Children’s Place (LCP). Dr. Hackett agreed that enrollments are going up and that special needs are also increasing there. The LCP is currently at capacity, so the only options are to expand into space at an elementary school, build more space, or put students into outplacements. The recently constructed LCP was sized to be larger than the expected need, but over the last couple of years the demand has grown dramatically. Cur- rently there are five students in outplacements that the principal would like to bring back, but this would also require a matching group of typical peer students to maintain the inclusionary status. Mr. Bartenstein asked if Lexington had become a target for families with special needs students, or if the increase in special needs was spread across the Greater Boston area. Dr. Hackett responded that the demand is increasing everywhere, but Lexington is seeing a significantly larger increase than other areas, possibly double the average rate. Dr. Hackett added that some programs the school system works with, such as METCO, have changed their method for assigning students to a lottery 2/1/2024 AC Minutes 5 system, which has resulted in more students with special needs coming to Lexington. Mr. Barten- stein asked if there were students who came to Lexington just to get an outplacement. Dr. Hackett replied that most people choose to live in Lexington because they want to be a part of the commu- nity. Building Renovation at 173 Bedford Street Ms. Kosnoff stated that the Town had the option to pursue a less expensive renovation of 173 Bed- ford Street by not fully upgrading the HVAC to an all-electric system. The alternative would be to upgrade the current fossil-fuel based system (natural gas), which would save the Town about $1.5 million out of an estimated total of $6 million in renovation costs. She wanted to hear feedback from the Committee on whether this option, which would not fully address the Town’s climate goals, was nevertheless acceptable. Mr. Levine stated that a lease on space as an alternative to using 173 Bedford Street would need to last at least 10 years with an option to extend to 20 years. He felt that investing in 173 Bedford Street would be a better use of funds. Mr. Michelson agreed, stating that it would be unwise to use the location for affordable housing before the Town’s need for swing space was finished. Mr. Pa- daki stated that we should prefer a lower cost option for the renovation of the 173 Bedford St. build- ing because we don’t have a long-term plan for the building. Mr. Ahuja asked what the cost of leasing space would be. Ms. Kosnoff replied that staff have issued an RFP for 5- and 10-year leases that would satisfy the Town’s needs, but the bids are not due back until February 14. In any case, staff does not expect to receive any bids that would cost less than the projected $4.3 million in renovation costs in the case that the fossil-fuel HVAC is retained. Ms. Kosnoff stated that the Town currently has a plan for set of capital projects that would use 173 Bedford Street as swing space for the next ten years, after which there are no further plans for the building. At that time, one possibility would be for the location to be re-purposed for affordable housing. Mr. Bartenstein asked if the current RFP for leased space specified an all-electric HVAC system. Ms. Kosnoff replied that it did not, and Mr. Bartenstein stated that there was therefore no reason to impose such a requirement in the current renovation plans. Mr. Levine stated that it may be possible to include other less expensive energy-saving options in the renovation, even if the HVAC system is not completely replaced. Minutes of Prior Meetings Minutes from the Committee meeting on January 18 were approved by a vote of 7-0. Future Meeting Discussion Mr. Padaki suggested that the Committee should begin voting on warrant articles at its next meet- ing. Mr. Parker stated that all drafts should be completed by February 29. Adjourn The meeting was adjourned at 9:42 p.m. Respectfully submitted, Glenn P. Parker 2/1/2024 AC Minutes 6 Approved: February 8, 2024 Exhibits ● Agenda, posted by Mr. Parker ● LPS FY25 Budget slides