HomeMy WebLinkAbout2018-02-08-AC-min 02/08/2018 AC Minutes
Minutes
Town of Lexington Appropriation Committee (AC)
February 8, 2018
Place and Time: Ellen Stone Room, Cary Memorial Building, 7:30 p.m.
Members Present: John Bartenstein, Chair; Alan Levine, Vice-Chair & Secretary;
Eric Michelson; Richard Neumeier; Sanjay Padaki; Andrei Radulescu-Banu; Lily Manhua Yan;
Ran Helen Yang; Carolyn Kosnoff, Assistant Town Manager, Finance(non-voting, ex-officio)
Members)Absent: Ellen Basch
Other Attendees: David Kanter, Vice-Chair and Clerk, Capital Expenditures Committee (CEC)
The meeting was called to order at 7:37 p.m.
1. Announcements and Liaison Reports
Mr. Bartenstein reported the following:
• The Budget Summit V, scheduled for February 13, has been canceled.
Mr. Neumeier reported the following:
• In the March 6, 2017 Lawyers' Weekly, there was an opening listed for an Assistant City
Solicitor in Chelsea, MA; salary range: approximately $68,000 to $85,000.
• In the January 28, 2018 Lawyers' Weekly, there was an opening listed for a Town
Counsel in Milford, MA; salary range: approximately$90,000 to $128,000
• In the January 29, 2018 Lawyers' Weekly there was an opening listed for a City Solicitor
in Newton, MA, who would manage 10 full-time employees; salary range approximately
$145,000 to $150,000.
Ms. Kosnoff reported the following:
• Yesterday, the Town issued over $48.0 million in long term bonds. Seven bids were
received—all competitive. The Town was required to select the bid with the lowest True
Interest Cost(TIC). The selected bid included a 29-year term, a TIC of 2.996°/x, and a
premium (an up-front payment) of$2.7 million. The premium will be used to offset
issuance costs and reduce the par value of the bond. This will reduce principal payments
during the first five years. The structuring of the low bid results in a coupon rate of 5.0%
over the first 10 years, and then it drops to approximately 2.6% in year 11 and increases
slightly for the remainder of the term. The financial modeling done by the Town
estimated a 4.0% coupon rate; the debt service modeling will be updated to reflect the
reduction in borrowing due to the premium received and the higher coupon rate.
The Town also issued approximately$11.7 million in Bond Anticipation Notes (BANs)
yesterday. The low bid has a TIC of 1.4%.
• Both Standard&Poor and Moody's gave Lexington a Aaa rating. Mr. Bartenstein
distributed Moody's report on Lexington's rating.
2. Review of FY2019 Budget Issues
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Mr. Kanter reviewed the warrant articles on which the CEC has questions and/or may
comment in its report to the Annual Town Meeting (ATM). He noted that he expects the
CEC to support those articles not mentioned. The CEC questions/comments plus some
supplemental information about the referenced articles included, but were not limited to, the
following:
• Appropriate for Advice and Analysis–Getting to Net Zero: The CEC has noted that
although this is not a capital project, the CEC considers the requested funding to be
fungible and suggests that it might be better used to help offset costs associated with
major capital projects recently approved in the debt exclusion referendum.
• Appropriate for Community Preservation Committee (CPC) Operating Budget and CPA
Projects.-
Conservation
rojects:Conservation Land Acquisition: Information is not yet available.
Community Center Sidewalk: The CEC is likely to support this project, but
information is not yet available.
9 Oakland Street Renovation and Adaptive Re-Use: This is a non-town project for
Douglas House, which houses and works with those who have brain injuries. The
original reconstruction of the building received Community Preservation Act
(CPA) funding, and the current project(to enhance the envelope of an ancillary
building) is CPA eligible, according to Town Counsel. The request is for
$200,000; the estimated project costs are over $400,000. The CEC voted to
support this request—the only vote taken to date on 2018 ATM articles.
Lowell Street/Farmview Affordable Housing Supplemental Funds: The appropriation
request from the Lexington Housing Advisory Board has not, as yet, been
submitted. Ms. Kosnoffnoted that she expects it to be for over $1.0 million. Mr.
Kanter noted that there is a policy question about how much to pay for affordable
housing.
• Appropriate for Westview Cemetery Building Construction: Cemetery fees are expected
to cover the cost of this project.
• Appropriate for 45 Bedford Street/Fire Station Replacement: It isn't clear whether the
$18 million request includes construction documents. It was noted that the debt
exclusion vote was for a project, not an amount of money,but it is important that the
costs do not substantially exceed the amounts discussed during the campaign; the State
could intervene if the costs exceed those projections by more than 10%.
• Appropriate for Municipal Capital Projects and Equipment:
Hydrant Replacement Program: Mr. Kanter reported that there is conflicting
information about how many hydrants are in Town; he would like verification that
the program is aggressive enough for safety purposes.
Center Streetscape Improvements Design: Mr. Michelson helped in reviewing the
history of this project. Town Meeting previously appropriated funds intended to
move the design to 100% of completion. Because of controversy over aspects of
the plan that was to be designed, the schematic design phase was halted, and an ad
hoc committee was created to review the design options and provide the Board of
Selectmen(BoS)with recommendations related to sidewalk materials on the north
side of Massachusetts Ave., lighting, and fixtures. Because of the new scope,the
unused part of the previous appropriation can only support a 25% completion of
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the design, which is expected to be available before ATM; this article is
requesting the balance to complete the design.
It was noted that the project includes resurfacing Massachusetts Avenue in the
center; temporary repairs will be necessary until the project moves forward.
Initially, the BoS supported installation of a traffic light at Woburn
Street/Winthrop Road and Massachusetts Avenue as part of the project. A traffic
study was subsequently conducted, and the BoS has not re-visited the issue.
Implementation of this approximately$7.5 million project is slated for a period of
three years, to be paid for within the levy limit. In response to a question, Ms.
Kosnoff said that this project is not currently included in the Town's financial
modeling, but she believes it can be accommodated comfortably.
Automatic Meter Reading System: Ms. Kosnoff explained that an appropriation of
$750,000 will be requested this year under Article 16(f) to begin installation of an
automatic meter reading system which would replace manual reading of
residential and commercial water meters. The appropriation would comprise
$375,000 from Water Enterprise Fund debt and$375,000 from Sewer Enterprise
Fund debt. This would be the first phase of a three-phase project—the plan is for
the new system to be implemented in three sections with funding for the next two
sections ($750K each) coming over the next two years. A cost benefit analysis is
expected to be completed by early March. The project requires installation of a
radio sending unit on each meter in Town, which would allow for remote meter
readings and an automatic process of monitoring usage that would quickly
identify leakage problems. Currently, the Town is averaging approximately
$460,000 in abatements for water usage problems that were undetected for weeks
or months. Although there are currently three employees who conduct biannual
meter-readings, the new system is not expected to reduce staff because those staff
members have other responsibilities. Because of the tiered billing schedule, it is
important that timely meter reading is conducted, making it impractical to depend
on customers to read their meters.
Transportation Mitigation: These funds would be used for addressing safety issues
that surface during the year, frequently being identified by residents. The CEC
suggested to Carl Valente, Town Manager, that unused funds should not be
carried over to the next year, but Mr. Valente felt that current practice provides
necessary flexibility.
Municipal Technology Improvement Program;Application Implementation;Network
Core Equipment Replacement: The Town's new Information Officer is working
to improve use of the Town's current technology systems.
• Appropriate for School Capital and Equipment: This is a request for approximately$1.7
million.
• Appropriate for Public Facilities Capital Projects and Equipment:
Public Services Building Vehicle Storage Area Floor Drainage System: This is a
new projecta request for approximately$157,000 for garage floor repairs.
Municipal Building Envelopes and Systems: This project is designed to address two
problems with leakage in the Town Office Building.
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Visitors Center Construction Documents: This is a$200,000 request. It may
become a stand-alone article.
• Appropriate for Visitors Center (Citizen Article): It is expected that this article will be
indefinitely postponed because the project is included in the article above Appropriate for
Public Facilities Capital Projects and Equipment; Visitors Center—Construction
Documents.
• Appropriate to Post-Employment Insurance Liability Fund: The CEC would like the
BoS to re-visit the policy for this funding. The CEC considers the requested funding to
be fungible and suggests that it might be better used to help offset costs associated with
major capital projects recently approved in the debt exclusion referendum.
• Rescind Prior Borrowing Authorizations: Ms. Kosnoff reported that this article relates to
closing accounts for projects that have become inactive or are complete, and that she
expects several such items to be identified this year.
• Appropriate to Stabilization Fund: Mr. Kanter noted his opinion that, in view of the
Town's recent revenue growth, this fund needs an infusion of funds to fulfill a previously
accepted guideline of maintaining the Stabilization Fund at no less than 5% of the net
operating revenues.
• Appropriate for Authorized Capital Improvements: Information is not yet available.
• Amend General Bylaw Regarding Financial Committees (Citizens Article): This article
was initiated by the CEC to ensure mission statements for the finance committees reflect
current practice. It was noted that the mission statement for the AC does not need to be
changed.
• Resolution to Request Warrant Articles to be Accompanied by Financial Projections
(Citizens Article): The CEC is concerned that this could become a cumbersome
requirement for staff. Staff members already prepare Capital Improvement Plan (CIP)
requests for their departments that include information about funding requests and
estimates. These are used by senior staff to evaluate projects and build a budget. They
are used by the CEC during their review process. These are public documents. Mr.
Bartenstein suggested that Mark Andersen, the proponent for this article, be invited to
attend an AC meeting.
Mr. Kanter added that the CEC is concerned about a project that is not currently included in
the FY2019 Town Manager's Preliminary Budget & Financing Plan (White Book). The
Police Department has postponed replacement of its radio system until FY2020, although
Motorola's maintenance contract expired on January 1, 2018. Motorola has reported that it
will continue to serve Lexington on an as-needed basis, and the Police Chief is comfortable
that the equipment will continue to serve Lexington adequately.
3. Planning for Report to 2018 ATM
Mr. Bartenstein reviewed the recently updated spreadsheet that identifies assignments for
writing this Committee's report to the ATM. He urged members to work with their assigned
partners in preparing material.
4. Minutes
After making two edits to the February 1, 2018 draft minutes, a motion was made and
seconded to approve those minutes, as corrected. The motion passed. VOTE: 8-0
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5. Next Meetings
It was agreed to invite Marl-, Sandeen, Chair of the Sustainability Committee, and
Mr. Andersen to a meeting to discuss the articles that they are supporting, Articles 7 and 34
respectively. AC meetings will be scheduled for March 1, March 8, March 15, and March
22. If an additional meeting is necessary, a meeting could be held on March 13.
In response to a question regarding a report in today's Lexington Minuteman about a"glitch"
in the assessor's computer program used to determine real estate values, Ms. Kosnoff
stressed that this was not a computer glitch but human error involving some properties
related to tear-down designations. It isn't clear whether malting the corrections would
change the amount of taxes due.
The meeting adjourned at 9:48 p.m.
Respectfully submitted,
Sara Arnold, Recording Secretary
Approved: March 1, 2018
Exhibits
• Agenda, posted by John Bartenstein, Chair
• Moody's Rating Action: Moody's assigns Aaa and MIG 1 to Lexington, MA's GO
bonds and BANs, 1 Feb 2018
• Extract from Pending Draft#3 Capital Expenditures Committee Report to 2018 ATM (as
of 8 Feb 2018) Table of Contents
• ATM Event Planner as of 2/7/2018—Assignments
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