HomeMy WebLinkAbout2025-05-15-AC-min-att1Commentary on the Fougere Report
Appropriation Committee, Town of Lexington
May 15, 2025
Preface
To comply with the MBTA Communities Act, Article 34 of the 2023 Annual Town Meeting created new
zoning overlay districts to expand by -right development of multifamily housing in Lexington.
On February 14, 2025 the Appropriation Committee issued a memorandum, MBTA Community Zoning—
Financial Considerations, which examined the potential impact of Article 34 based on recent and
anticipated submissions for new developments to the Planning Board.
On March 13, 2025, our Committee published its report on Article 2 of the 2025-1 Special Town Meeting.
That article reduced the scope of zoning bylaws approved under Article 34. Our report included projections
of potential growth, both before and after those changes were enacted.
On March 19, 2025 the Select Board received a draft report, Impact Analysis of Multi family Housing
Development on Lexington, Massachusetts, from Fougere Planning + Development in association with
Jeffery Donohoe Associates (Fougere Report).
This memorandum responds to the Fougere Report. It is addressed to Lexington's Town Meeting Members,
Select Board, and Planning Board and it represents the consensus view of the Appropriation Committee.
Executive Summary
The draft of the Fougere Report covered 1,117 proposed housing units based on recently approved
applications to the Planning Board. This represents a small fraction of the potential future development
covered in our February 14 memorandum, limiting the applicability of the report to the next three to five
years.
In our Committee's report to the 2025-1 Special Town Meeting, we projected that the number of new
housing units would reach 2,600 (or more) over the next ten to twelve years. We assert that the Town should
begin preparing now for significantly more growth, including the potential for new capital investments that
are not foreseen in the Fougere Report.
There is unavoidable uncertainty in projections of school enrollments, municipal expenses, and future
housing growth. While the Fougere Report provides valuable initial information, it should explain its school
enrollment methodology, update its estimates for growth in school costs, and consider using uncertainty
analysis to contextualize the estimates.
We recommend close attention as new developments proceed, and regular updates to the financial impact
analysis.
Observations on the Fougere Report
We affirm that the report adds value to this community discussion. The following aspects provide useful
information and extend the analyses presented earlier by this Committee:
• The consultants conducted interviews with department heads about potential financial impacts and
summarized the sense of those interviews.
• New revenue from motor vehicle excise taxes was estimated.
• Potential increases in circuit -breaker reimbursements and Chapter 70 state aid were noted.
Appropriation Committee: Commentary on the Fougere Report
• Affordable units were distinguished from non -affordable units in the estimation of likely student
occupancy per dwelling unit.
• Public safety and municipal impacts were examined in detail. The examination included an analysis
of Police, Fire, and EMS call data, as well as an estimate of incremental revenue from additional
EMS calls.
Below we share the Committee's issues and concerns with the report.
1. Additional Growth
The 1,117 units analyzed in the Fougere Report represent a fraction of the anticipated development. More
units are anticipated from:
• Properties where owners have submitted preliminary subdivision plans (PSPs) to "freeze" the
zoning. (840 units projected if no Hartwell CM zone properties are developed; up to 2,400 units
projected otherwise)
• Other projects in the remaining MBTA Communities overlay districts. (670 units projected)
• Special Residential Developments including those at 28 Meriam St. and 257 Waltham St. that are
not in MBTA Communities overlay districts. (20+ units projected)
• Affordable housing developments on Town land, e.g., Lowell St. and Vine St. that are also outside
the MBTA overlay districts. (45-50 units projected)
In addition to the 1,117 units considered in the Fougere Report, this shows the potential development of
around 1,600 to 3,100 units, meaning that coming developments could ultimately result in a total of two
and a half to nearly five times 1,117 units.
As we discuss below, additional growth at this scale could exceed critical population and school enrollment
thresholds, triggering demands for major new capital projects.
2. School Impact Projections Need Refinement
The Fougere Report estimates the baseline general -education per -student cost at $10,000412,000,
depending on the grade level. When additional expenses for SPED students are included, the report shows
the average per -student cost rising to about $17,000 for high school students. The report cites the
Department of Elementary and Secondary Education (DESE) as its source, but no derivation of these
numbers from DESE data is provided. A cursory review of DESE school expense data for Lexington
suggests that the average per -student cost may be somewhere in this neighborhood, but it would be helpful
to see the underlying assumptions behind the numbers.
The report assumes a net expense of $80,000 per student in out -of -district SPED placements. We would
also like to see a more detailed explanation for that figure. The cost for out -of -district students is made up
of costs for tuition, transportation, and consultant services partially offset by state circuit -breaker
reimbursements.
The report states that out -of -district students make up 1 % of LPS enrollment, but that p is actually 1.4%.
Employee health benefits for teachers and school staff are carried in the Town's Shared Expenses budget
and thus are not listed in the School budget. It is not clear whether these costs are included in the Fougere
Report's accounting; the inclusion of benefits could add roughly 20% to all cost estimates affected by
increases to staff size.
We assert that the marginal cost per additional student will likely depend on the magnitude of enrollment
increases. If 2.5 to nearly 5 times the 1,117 housing units are developed over the next decade, one would
expect the new housing to be occupied by 2.5 to nearly 5 times the 499 students assumed in the Fougere
Report. There are several reasons that marginal costs may depend on the enrollment changes. A modest
increase in enrollment may require not much more than a modest increase in the number of classroom
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Appropriation Committee: Commentary on the Fougere Report
teachers. For a larger increase in enrollment, additional specialists for art, music, etc., and additional
administrators will also be needed. As an extreme example to illustrate this point, for very large increases
in enrollment, we would expect the marginal cost per additional student to approach the average cost per
student which is much higher than the assumed marginal cost.
School cost projections based solely on per -student costs are complicated by the possible need for new or
enlarged school facilities. Our schools accommodate a constantly changing enrollment size, and an
enrollment increase of 5% to 10% can often be accommodated, albeit with some crowding and/or
redistricting. There is nevertheless a threshold above which the Town may need to provide additional space
in the school system. We may surpass that threshold at some point if the Town sees a total enrollment growth
of 1,500 to 2,000 LPS students. While this would not directly affect marginal per -student costs, it would
still present an additional financial hurdle for the Town during a period of intense growth.
We believe there are some intangibles worth our attention. For example, a new high school building will
tend to attract more high school students to Lexington in both new and existing housing. This is not
considered in the current LPS enrollment projections or the Fougere Report.
Methodological Limitations
We note a lack of formal uncertainty analysis in the Fougere Report. In some cases, estimates based on
limited sample data will have unavoidably large uncertainty. It would be helpful to have some quantification
of the statistical uncertainties in key cost and enrollment estimates.
For example, student occupancy projections were based on limited data from existing developments that
do not reflect the expected mix of housing alternatives. Since few condominiums were available for study,
the estimates regarding new condominiums will be subject to a high level of statistical uncertainty. In
addition, fewer apartment complexes were analyzed compared to the LPS report from January. While this
may tend to make results more representative of potential new developments, a smaller sample size will
lead to higher statistical uncertainty.
The student occupancy projections do not consider the possibility that dens may be used as extra bedrooms.
We assert that demand for access to LPS is strong enough that some families will choose to use a den as a
bedroom if that is the only option they can find or afford. This could modestly increase projected school
enrollment increases.
Student occupancy numbers vary widely among the existing apartment and condominium developments. It
is not clear that the range of variation can be adequately explained by the variations in the number of
bedrooms per dwelling unit in each development together with natural statistical variation. In the absence
of an understanding of this variation, we note that one cannot rule out the possibility that new housing
would tend to follow a higher rather than a lower occupancy pattern in which case using an average would
lead to a student occupancy underestimate.
The estimates of municipal expense increases should be discussed in more detail.
While equipment such as police cruisers will last more than one year, such equipment is replaced on a
regular schedule. Adding new equipment should not be considered as a one-time cost. Instead, these
expenditures should be presented more like operating expenses using an average annual cost of ownership.
The Fougere Report does not examine the impact on the potential future tax revenue from commercial
properties and the long-term loss of revenue if those properties are converted to residential uses.
Finally, we believe any analysis of this type should adopt a conservative perspective, offering a careful
examination of the worst case and highest -cost scenarios.
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Appropriation Committee: Commentary on the Fougere Report
Some of the housing that may be developed beyond the 1,117 units (See "Additional Growth" above) could
be completed within the next five years, i.e., before all 1,117 units are constructed. This complicates a
discussion of the timing of the financial impacts of the new housing, and especially how such impacts could
be offset by decreases in the student population in currently existing housing.
Furthermore, in regard to projections of the increases that may be needed in the future to maintain
educational quality, we note that the Town of Lexington's education expenses have increased by about 4%
per year over the last five years even as enrollments decreased by about 1.5% per year. The trend of
increasing educational expenses appears likely to continue and will make it more difficult to maintain
educational quality when enrollments increase.
These considerations imply that it is premature to offset projected cost increases due to enrollment
increases.
Conclusions
No one can provide an exact timeline for the construction of new housing in Lexington or for the associated
changes in school enrollments. Factors that will influence this timeline include a local economy that relies
on free travel for tourism and immigration for academic and medical workers along with many specialized
engineering fields. Construction businesses may face economic supply -chain issues that impede their work.
The zoning choices of our neighboring and regional communities will also influence the market for housing
here in Lexington.
We recommend continued monitoring of new housing developments with timely updates to estimates for
the timing and magnitude of financial impacts.
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