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HomeMy WebLinkAbout2024-07-11-AC-min 7/11/2024 AC Minutes 1 Minutes Town of Lexington Appropriation Committee (AC) July 11, 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; John Bartenstein; Anil Ahuja; Sean Osborne; Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio); Lily Yan (8:00 p.m.); Vinita Verma Ms. Verma listened to the meeting by phone but was unable to participate. Members Absent: Eric Michelson Other Attendees: Charles Lamb, Chair, Capital Expenditures Committee (CEC); Kelly Axtell, As- sistant Town Manager; Deepika Sawhney, Vice Chair, School Committee; Melinda Walker At 7:38 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. Parker asked if the Committee would be willing to share a recording of a committee meeting with a group that is working on an artificial intelligence project to provide access to the Town budget. The Committee was agreeable but suggested that we ask the group to delete the recording after they are done with it. Mr. Padaki attended the Recreation Committee meeting in June where there was much discussion about the likely impact of the high school project on the playing fields. That committee took no po- sition, but several members expressed the opinion that it will be difficult for them to agree to any plan that impacts the fields for a substantial length of time. Mr. Bartenstein noted that a new development is being planned under the relatively new MBTA Communities zoning changes at 331 Concord Ave. that would include retail space and 200 residen- tial apartments. There are also other developments being planned under the MBTA Communities zoning bylaw. Such developments could have a substantial impact on the number of students at the high school. Mr. Padaki noted that Vinita Verma has recently been appointed to the Committee. Ms. Verma lis- tened to this meeting by phone, but was not audible via that connection and, therefore, was unable to participate. Mr. Osborne reported that the Town Manager search committee is on schedule and expects to rec- ommend three to five candidates for the Select Board to interview by the end of August. The last day for our current Town Manager, Mr. Malloy, will be September 30, 2024. FY2024 End of Year Budget Adjustments Ms. Kosnoff presented a series of year-end budget adjustments: 7/11/2024 AC Minutes 2 Salary Adjustments Line Item Amount Police – Regular Wages $ 13,000 Fire – Regular Wages $ 1,030,000 Library – Regular Wages $ 25,000 Select Board – Regular Wages $ 2,500 Year-End Transfers Transfer To Transfer From Amount Balance Property & Liability Insurance Health Insurance $ 13,000 $ 4,498,149.69 Board of Health – Regular Wages Board of Health – Contract Services $ 9,500 $ 21,231.00 Select Board – Legal Services Town Manager, Land Use and Housing $ 96,000 $ 124,965.00 Elections – Contract Services Elections – Seasonal P/T Wages $ 15,000 $ 58,531.78 Innovation & Tech – Overtime Innovation & Tech – Townwide Soft- ware Support $ 8,000 $ 14,098.79 Authorizations of Revolving Funds Revolving Fund Original Authorization Increase Requested Revised Authorization Compost Operations $ 875,000 $ 65,000 $ 940,000 Note that the Committee must approve year-end budget transfers and changes in authorizations of revolving funds, but does not have any authority over salary adjustments. The Salary Reserve Account is used to fund increases in personnel costs following settlements with collective bargaining units or unexpected overtime costs. The balance in the Salary Reserve Ac- count is just over $2,700,000, and is adequate to fund the requested salary adjustment transfers. Year-end transfers may be made between different budget lines, either between expenses and salary lines of a department or between budget lines of different departments. There are no Reserve Fund transfers being requested for FY 2024. Ms. Kosnoff stated that the Town did not fully budget for insurance premiums required during con- struction of the new Police Headquarters, including increased insurance for the new building and a builder’s risk policy during the construction. Ms. Kosnoff anticipates that there will be a request to increase the funding for the Town’s FY2025 health insurance costs at the fall special town meeting. The Town incurred unexpectedly large legal expenses in FY2024. Those expenses include costs of two litigation cases which accounted for over $100,000 out of the total of $390,000. These two pro- ceedings have concluded and are not expected to generate further expenses. In addition, the ex- penses related to various affordable housing issues were substantially larger than in most years, since they included expenses related to LexHAB’s transition to a 501(c)(3) organization, the crea- tion of the Affordable Housing Trust (AHT), and preparation for the Lowell St. 100% affordable housing project. Ms. Kosnoff remarked that if LexHAB is successful in its transition to an independent nonprofit, the Town will no longer be directly responsible for its legal expenses. The Town also faces a policy de- cision on the funding of legal expenses for the AHT, which are currently paid under the Town’s le- gal expenses budget. An alternative would be to have the AHT cover its legal expenses from the trust balance. During the past year, the Town Clerk leased elections processing equipment that allowed for high- speed processing of ballots. The costs were higher than expected, but using this equipment reduced 7/11/2024 AC Minutes 3 the need for additional staff time. It has become very difficult to find short-term staffing to support elections, and without short-term staffing the Town would have had to pay overtime to regular staff. The cost of leasing the equipment was less than the potential cost of staff overtime. The Innovation & Technology increase was driven by the need for additional technical support dur- ing hybrid town meetings. The Compost Revolving Fund “business” has outperformed expectations for revenues received, but, in the process, has incurred additional expenses that must be formally authorized. The Committee voted 7-0 to approve all five year-end transfers as requested and also voted 7-0 to approve the change in the spending limit of the Compost Revolving Fund. Mr. Parker signed the re- quests and delivered them to Ms. Kosnoff by email. Discussion of the Lexington High School Project As the Committee’s liaison to the School Building Committee (SBC), Mr. Levine led the discus- sion. He began by noting that this is a very large project that still has many unknowns, but he wanted to understand what the Committee needs to make its recommendations on the project. Mr. Levine stated that we need better information on the total project costs. The current cost esti- mates are rough and are intended to indicate relative costs for the five options being considered now. He stated that estimates for the three projects involving all new construction are probably fairly accurate. He is concerned about the accuracy of the cost estimates for the alternatives that in- volve renovations or new construction on the footprint of the current facility because those alterna- tives are more complicated than the others, and he is not convinced that the estimates of those costs are sufficiently accurate relative to the cost estimates for the alternatives involving all new construc- tion on the fields. Mr. Levine suggested that anyone who feels strongly in favor of a concept that is not included in the five alternatives that are currently on the table should speak up. Ms. Kosnoff responded that incor- porating additional options beyond the current five would likely result in a significant delay relative to the current project timeline. Nevertheless, if none of the options has the necessary community support, then a delay would be preferable. Mr. Levine is concerned that the schedule does not allocate any time for review outside of the SBC. In response, the Town is organizing a joint committee summit for early August to gather more feed- back on the project. Mr. Levine expressed satisfaction with Ms. Kosnoff’s initial financial modeling but stated that the model needs to be refined by obtaining better estimates of the costs, and to include the availability of subsidies that could offset some costs, especially in regard to sustainability features. The initial capital investment for solar and geothermal is estimated at about $80 million, but the Town could be eligible for $55 million in subsidies and rebates once the building is completed. The current model- ling also ignores the expected reduction in operating costs due to the transition from an HVAC sys- tem using fossil fuels to solar and geothermal. This reduction could have a net present value of $30 million to $40 million. Mr. Padaki expressed concern about how voters would respond if certain sports were to be unavail- able for five or six years while playing fields were offline. Mr. Levine responded that none of the options leave the playing fields untouched. Some options would have less down time for the fields, but the construction will require a significant laydown area, and limiting or relocating the laydown 7/11/2024 AC Minutes 4 area to preserve access to playing fields will be more expensive. A geothermal system may require 560 wells covering three to five acres of land and will require 1.0 to 1.5 years of construction. There is no alternative that does not disrupt the playing fields for some amount of time. Some alter- natives could limit the down time to an interval perhaps as short as two years, while others could involve down times as long as four or five years. Ms. Kosnoff expressed confidence that the Town would not abandon Lexington High School’s baseball teams during the construction, and that alternative facilities would be made available, albeit at some cost. Other baseball leagues that rely on the center fields would likely have to move else- where for the duration. According to Ms. Kosnoff the Town faces a dilemma, because some people strongly object to the high cost, but there are also objections to alternatives that may cost less because they impact the playing fields. The Town has also received strong feedback that parents want to minimize the dis- ruption to their students’ educational program. Mr. Levine noted that the project to relocate the School Administration to 173 Bedford St., and then build new fields on the site of Old Harrington, would help to partially alleviate the shortage of fields during the high school construction. Mr. Padaki asked about options to renovate or rebuild the field house. Ms. Kosnoff responded that the MSBA will only permit a renovation under the current funding umbrella. A new field house would have to be a separate project with separate funding and its own debt exclusion vote. Ms. Kos- noff would like this Committee and the Capital Expenditures Committee to weigh in on this topic at the summit, since it impacts the school architect’s work and/or the Town’s 5-year capital planning. Mr. Padaki asked for a better summary of the requirements for renovating the field house, and the projected lifespan of the building with renovations. The impact of new construction of dwelling units under the MBTA Communities zoning on the number of students at Lexington High School, and how to plan for the possibility of higher enroll- ments was discussed without drawing any conclusions except that it is important to do that plan- ning. Mr. Levine concluded by noting that the SBC timeline has improved cost estimates coming out on October 28, after which the School Committee would narrow the list to a single option on Novem- ber 12. Mr. Levine expressed his discomfort with the limited amount of time in that schedule, espe- cially if anyone expects this Committee, along with several other boards and committees, to provide useful recommendations. If this Committee wants (or is expected) to provide further input after the August summit, then this must be a point of discussion at the summit. The fall town meeting has been tentatively scheduled for November 12-14. Minutes of Prior Meetings Minutes from the Committee meeting on April 18 were approved by a vote of 7-0. Future Meeting Schedule A joint committee financial summit is planned during the first two weeks of August. Mr. Parker suggested that the Committee meet again on August 29. 7/11/2024 AC Minutes 5 Adjourn The meeting was adjourned at 9:00 p.m. Respectfully submitted, Glenn P. Parker Approved: August 8, 2024 Exhibits ● Agenda, posted by Mr. Parker ● Year-end budget adjustment forms