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HomeMy WebLinkAbout2017-08-22-CEC-minMinutes of the Lexington Capital Expenditures Committee (CEC) Meeting {� August 22, 2017 Location and Time: Town Office Building, Reed Room (111); 7:30 A.M. Members Present: Jill Hai, Chair; David Kanter, Vice -Chair & Clerk; Sandy Beebee (arrived at 7:42 A.M.); Rod Cole; Charles Lamb; Wendy Manz; Frank Smith (remote participation) Members Absent: None Others Present: Joe Pato, Board of Selectmen (BoS); Carolyn Kosnoff, Assistant Town Manager, Finance; Sara Arnold, Recording Secretary Documents Presented: • Notice of CEC Meeting, August 22, 2017 • Draft Minutes of the CEC Meeting, August 2, 2017 • Memo by John Bartenstein, Chair, Lexington Appropriation Committee, May 15, 2017, "Alternate Proposal for Debt Exclusion Referendum, Use of Capital Stabilization Fund" • CEC Subject Areas & Liaison Assignments for Fiscal Year 2017; dated 15 Nov 2016 • Town of Lexington Organizational Chart; Source: Town of Lexington FY2017 Recommended Budget & Financing Plan ("Brown Book"), February 29, 2016; inside front cover Call to Order: At 7:36 A.M., Ms. Hai called the meeting to order and authorized Frank Smith to participate remotely via teleconferencing because he was at a significant geographic distance from this meeting place. Approval of Minutes: A Motion was made and seconded to approve the Draft Minutes of the CEC meeting, August 2, 2017. By Roll Call Vote: 5-0-1 (Mr. Lamb abstained as he was not at that meeting.) (Ms. Beebee arrived) Discussion of the Special Financial Summit (SFS) that is Scheduled for September 13, 2017: Mr. Pato reported having missed the August 2, 2017, SFS and wanted, prior to the September SFS, to better understand the position of this Committee regarding the use of the Capital Stabilization Fund (CSF) to offset the size of the anticipated debt -exclusion package. His perception, based on the Minutes of the August 2nd SFS, was that the discussion and positions expressed by this Committee and the Appropriation Committee related primarily to political concerns related to the large debt -exclusion package being developed and the need to minimize the impact on the taxpayers. He wanted to hear more about this Committee's financial analyses and the long-term prudence of using CSF fund for this purpose. Mr. Kanter disagreed that this Committee's positions were primarily political. He said that Mr. Bartenstein's proposal not to include the two, past, land purchases (20 Pelham Road and 173 Bedford Street) in this fall's Debt -Exclusion Referendum and then to fully pay off those costs from the CSF had been thoroughly discussed and supported by this Committee with primary regard to what was considered a fiduciary responsibility of the Town. Ms. Hai noted that there had been considerable discussion about the financial implications during a "Chairs + One" meeting held prior to the August 2nd Special Summit. Page 1 of 4 Minutes of the Lexington Capital Expenditures Committee (CEC) Meeting August 22, 2017 Each member of this Committee stressed the need to see the updated financial models currently being prepared by staff and they are interested in having the models include the impact of replacing Lexington High School (LHS). Ms. Kosnoff noted that the LHS project has not been defined, nor has timing been determined, making it extremely difficult to include an estimate for it. Mr. Pato commented that he envisions a LHS project to be a series of smaller projects carried out over 15 years of more. There was agreement by the Committee that: • Because the Town has already made the purchases of 173 Bedford Street and 20 Pelham Road, there is logic in using the cash in the CSF to pay for them rather than adding them to further bond debt -service being addressed in the debt -exclusion package. • The Town also has a responsibility to the taxpayers whose past tax money is in the CSF. It seems appropriate to use some of those funds now to reduce the total financial burden of those two land purchases. Mr. Lamb added that the current financial models assume 30 -year bonds, but the Town should be financing those projects with bonds whose terms do not exceed 20 years. The arbitrary caps on tax increases adopted by the BoS should not necessarily dictate the length of the bonds. Mr. Pato's responses included the following: • It seems preferable to plan on amortizing the property purchases over a short period of time rather than paying for them outright. This would help retain flexibility for using the CSF when it is most needed; this will be better understood after the debt exclusion referendum. • The public is not naive; moving the money around would not protect them from the financial impacts. • The land purchases are important elements of the projects to build a new fire station and a new facility for the Lexington Children's Place and should be recognized as part of those projects. • The Bedford Street property may be sold after it is no longer needed for swing space. • If funds for rebuilding the Maria Hastings Elementary School (Hastings) are not approved in the debt exclusion vote, the Town still needs to rebuild Hastings because of increasing enrollment. It was noted that the debt -exclusion vote is tentatively scheduled for early December. The results could impact when to issue bonds and whether to roll over the bond anticipation notes (BANs) that are due in February. Ms. Kosnoff advised that although BANs have typically been for a 1 -year term, a shorter term can be used if pay -downs are to be made in less than the next year. In response to a question, Mr. Pato reported that the BoS had recently voted to support its earlier vote for an all -electric system for the new Hastings facility. This triggered discussion about efforts by Jon Himmel, Chair, Permanent Building Committee (PBC), to identify the Town entities who could have a vested interest in major building projects and to develop a Page 2 of 4 Minutes of the Lexington Capital Expenditures Committee (CEC) Meeting August 22, 2017 time -line for involving them during the whole of such a project's process. (This is an undertaking that this Committee had previously endorsed, in concept, when earlier proposed to it by Mr. Himmel.) Mr. Lamb, as the Committee's liaison to the PBC, agreed to work with Mr. Himmel on this effort. Discussion of the Committee's Organization and Processes—including Planning for Fall Special Town Meeting(s) and the FY2019 Capital -Budget Review Cycle: It was noted that this Committee's responsibilities include preparing reports to Town Meeting regarding recommended capital expenditures, and Committee members assume a variety of tasks to complete that objective. Mr. Kanter, currently the editor for all Committee reports to Town Meetings, asked whether the Committee still supports his approach and practices to that editorial work. He received unanimous support. Ms. Hai asked the Committee to consider whether a different approach in the layout of the report regarding presenting the same information would enhance its usefulness to all the Town Meeting Members. (That would be a discussion for a future meeting.) After reviewing assignments for the FY2017 effort and discussing various options for incorporating assistance from Ms. Beebee and Mr. Smith, who recently joined this Committee, it was agreed that for further activity during FY2018: • Ms. Beebee would assume responsibility for reporting on Culture and Recreation projects, with Ms. Manz assisting as necessary; • Ms. Beebee would "shadow" Mr. Cole's responsibilities relating to school projects; • Other "shadow" opportunities are available based on interest; • Mr. Smith would assume responsibility for reporting on Public Works projects, with Mr. Kanter assisting as necessary; • Ms. Beebee would serve as liaison to the Commission on Disability and Mr. Smith would serve as liaison to the Lexington Center Committee. • All other previous assignments would continue. It was noted that the Center Streetscape Design Review Ad hoc Committee may be dissolved in the near future, eliminating that liaison assignment. After reviewing the leadership roles for this Committee, a Motion was made and seconded to elect Ms. Hai to continue as the Chair, Mr. Lamb to be the Vice -Chair, and Mr. Kanter to continue as the Clerk. By Roll Call Vote: 7-0 Member Concerns and Liaison Reports: Ms. Hai reported that Michael Cronin—who is currently the Chief of Operations for the Newton Public Schools—has been selected to be Lexington's next Director of the Department of Public Facilities beginning on the 25th of next month. Future Dates for this Committee: • Regarding a Fall 2017 STM and a December Debt -Exclusion Referendum: September 13th–SFS for Updates on Costs of capital projects September 18th–BoS meeting to discuss the STM and referendum Page 3 of 4 Minutes of the Lexington Capital Expenditures Committee (CEC) Meeting August 22, 2017 September 20tH 26tH and October 4th—CEC meetings • Regarding FY2019—FY2023 Capital Improvement Project (CIP) requests and Preparation of Report for 2018 Annual Town Meeting: October 5th—Budget Summit I October 16th—CIPS submitted to BoS October 20th—ClPsdistributed to CEC October 25th, November 1St 8th 14th 29th December 5th 13th 20th and January 10th 17th 24th—CEC meetings. (Carl Valente, Town Manager, is expected to attend a CEC meeting in late December and/or early January to receive input on this Committee's positions on the CIPs) November 15th—Budget Summit II December 7th—Budget Summit III January 25th—Budget Summit IV (when this Committee will present its positions on CIPS) February 13th—Budget Summit V (if needed) Adjourn: A Motion was made and seconded at 9:28 A.M. to adjourn. By Roll Call Vote: 7-0 These Minutes were approved by the CEC at its meeting on September 13, 2017. Page 4 of 4