Loading...
HomeMy WebLinkAbout2018-02-01-AC-min 02/01/2018 AC Minutes Minutes Town of Lexington Appropriation Committee(AC) February 1, 2018 Place and Time: Parker Room, Town Office Building, 7:30 p.m. Members Present: John Bartenstein, Chair; Alan Levine, Vice-Chair & Secretary; Ellen Basch; Eric Michelson; Sanjay Padaki; Andrei Radulescu-Banu; Lily Manhua Yan; Jian Helen Yang Member(s)Absent: Richard Neumeier Other Attendees: Bob Pressman, Community Preservation Committee (CPC) The meeting was called to order at 7:36 p.m. 1. Announcements and Liaison Reports Mr. Bartenstein reported the following: • There will be a reception for retiring Selectman Peter Kelley on Thursday, March 1 from 4-6 p.m. This will not conflict with a 7:30 p.m. AC meeting, if one is so scheduled. • The Board of Selectman (BoS) were supportive of the warrant article proposed by the Capital Expenditures Committee (CEC) to amend the Town bylaws governing the finance committees' activities to better reflect current practice. • An email from Suzie Barry, Chair, BoS, indicates that the BoS will likely support the track and field and lighting capital projects; and that it is not yet clear whether a majority will support moving ahead with an expansion for the Lexington Community Center at this time. • A draft list of Annual Town Meeting (ATM) warrant articles prepared by staff was included in the Budget Summit 4 packet; he has excerpted it and separately distributed it to members. Ms. Kosnoff reported the following: • The FY2017 audit has been finalized; she will distribute the financial statement. • The Other Post-Employment Benefits (OPEB) biennial valuation was finalized this week. An actuary will hold an information session with staff at some point before the March town meeting, and up to four members of this Committee would be welcome to attend. Mr. Levine, Mr. Radulescu-Banu, Ms. Yan, and Ms. Yang expressed interest in attending, schedules permitting. Mr. Michelson volunteered to attend if any of these had a conflict. Ms. Kosnoff noted that while the projected OPEB liability is substantial, approximating $200 million, and the liability is still less than 5% funded, Lexington has appropriated more into its OPEB fund for future liabilities than most towns in the area. • Appropriations into the OPEB fund were approximately $1.5 million in 2016 and $1.8 million in both fiscal years 2017 and 2018. Those appropriations included $750,000 each year from the Health Insurance Claims Trust Fund, which had been created when the Town was self-insured for its employee/retiree health 1 02/01/2018 AC Minutes benefits. The current balance in the Health Trust Fund is about$3.8 million, and that fund will eventually be depleted. Ms. Kosnoff noted that when the Pension Fund is 100% funded, it may be feasible to increase the annual appropriations into the OPEB fund; and that due to recent stock market gains, the value of the pension fund increased by approximately 20% in 2017. • A report on the recommended OPEB appropriation for FY2019 is currently being prepared. Mr. Levine commented that the rate of return used for estimating future growth is a critical component in estimating the amount of the future liability • The debt issuance will be finalized next week. The Town is issuing approximately $48.0 million in long term bonds and approximately $11.7 million in Bond Anticipation Notes (BANs). The long-tern bond request is influenced by capital project expense schedules. The $48.0 million bond will cover about 35 items, including $9.0 million for the Hastings Elementary School project that could have been issued at a later date, but was advanced to take advantage of the current favorable interest rate environment. This decision also avoids paying issuance costs twice, first for BANs and then for long term bonds. In explaining the process for issuing bonds, Ms. Kosnoff reported that the Town uses a financial advisor who prepares an offering document, known as an official statement (OS), that is comparable to a prospectus. The OS goes to the rating agencies which, after review, assign a bond rating for the Town. The bonds are then issued for sale, and financial institutions submit bids. Bids may include premiums (an up-front payment), in addition to an interest rate, but bids must include the True Interest Cost, which is used for comparing submissions, with the lowest bid being selected. The bidding results could potentially result in changes to the assumptions regarding tax increase mitigation that have been used in the Town's modeling for funding large projects. 2. Review of FY2019 Budget Issues • Community Preservation Act (CPA)Funding for Center Field Track and Field Reconstruction and Athletic Facility Lighting: In response to questions about the amount of CPA funding being used for recreation projects (about 80% of available CPA funds), Mr. Pressman said that the CPA funds were originally available for historic preservation, open space, and affordable housing. Eligibility for recreation projects was added later. The Community Preservation Committee (CPC) is supportive of the recreation projects that have been presented. He added that the Center Track and Field project and the Athletic Lighting project will need to be debt-financed over five years. He also noted that the track was originally constructed in 2000 and has been resurfaced twice, in 2006 and 2012. There was discussion about the possibility that future reconstruction/renovation of the Lexington High School (LHS) could impact the track, field, and athletic lighting projects. It was agreed that this was a possibility,but a LHS project has not yet been defined enough to determine the potential ramifications. During discussion, it was noted that the athletic facilities involved are heavily used resources, making it undesirable to close them until further information is 2 02/01/2018 AC Minutes available; moving the track and field to a location other than adjacent to the high school did not generate general support. • CPA Funding for Other Projects: Mr. Pressman said that the Lexington Housing Assistance Board has put out bids for work to be done related to the site adjacent to the former Busa Farm on Lowell Street. A CPA request is anticipated. Additionally, the Town is expected to request CPA funds for a sidewalk from Marrett Road to the Lexington Community Center, the amount to be determined. It was noted that the FY2019 Capital Improvement Project request for design work for a new Police Station does not identify the CPA as a funding source, although an earlier version did so. The State's current level of reimbursement for CPA projects is about 17%. • School Budget, Class Consolidation Proposal: Mr. Bartenstein reviewed Patrick Mehr's request that this Committee address a proposal, described on his website, that he asserts could reduce the School Department budget by as much as $2.0 million per year by consolidating classrooms. Mr. Bartenstein noted that this Committee has the right to comment on this proposal but is not required to do so. He added that if this Committee were to decide to comment, a review should be fair, impartial, and efficient. There was discussion about the pros and cons of such a review, including whether such a review would be beneficial and in what ways. It was noted that the School Committee is responsible for school-related policy decisions and that a new school superintendent will be starting in the summer. It was suggested that such an undertaking would require time that this Committee does not have while preparing its report to the 2018 ATM. A motion was made and seconded to table the discussion and revisit the question of whether to conduct such a review after the ATM. The motion passed. VOTE: 6-2 Ms. Basch and Mr. Radulescu-Bann explained their opposition to the motion. Ms. Basch believes this is a School Committee matter. Mr. Radulescu-Banu said that he had unsuccessfully reached out to Mr. Mehr to discuss this proposal. He agreed to forward a November 2017 email he had sent to the lex-polrel email list in response to a constituent's inquiry about Mr. Mehr's multiple proposals in a Boston Globe opinion piece. 3. Planning for Report to 2018 ATM Mr. Bartenstein reviewed the spreadsheet identifying assignments for writing this Committee's report to the ATM and the currently-identified warrant articles. He will add assignments for the remaining warrant articles in the near future. 4. Minutes After making one edit to the January 18, 2018 draft minutes, a motion was made and seconded to approve the December 14, 2017 minutes and the corrected January 18, 2018 minutes. The motion passed. VOTE: 8-0 3 02/01/2018 AC Minutes 5. Next Meetings It was agreed to meet on February 8, 2018. It was noted that a budget summit is tentatively scheduled for February 13, 2018. If it is cancelled, this Committee may decide to meet that evening. The meeting adjourned at 9:55 p.m. Respectfully submitted, Sara Arnold, Recording Secretary Approved: February 8, 2018 Exhibits Agenda, posted by John Bartenstein, Chair Email from Suzie Barry, BoS chair, Subject: BOS Update; Date: January 31, 2018 ATM Event Planner as of 2/1/2018—Assignments • List of Warrant Articles from BoS Agenda Packet, January 24, 2018 4