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HomeMy WebLinkAbout2025-11-20 Finance Summit I - ReleasedFinance Summit I Select Board, School Committee, Appropriation Committee, Capital Expenditures Committee November 20, 2025 7:00 PM Estabrook Hall, Cary Memorial Building AGENDA Summit ITEMS FOR INDIVIDUAL CONSIDERATION 1.Overview of FY2027 Revenue Projections, Budget Drivers, Current-Year Challenges, Policy Considerations, and Proposed Approaches to Closing the Budget Gap ADJOURN 1.Anticipated Adjournment 8:30pm NEXT MEETING INFORMATION - LABELONLY Meeting Packet: https://lexington.novusagenda.com/agendapublic/ *Members of the public can attend the meeting from their computer or tablet by clicking on the following link at the time of the meeting: https://lexingtonma.zoom.us/j/82013535294? pwd=mGvKYC9PHOT8ByUHHa0a18jNRhRXpf.1 Phone +1 646 876 9923 Meeting ID: 820 1353 5294 Passcode: 848540 An Act Relative to Extending Certain State of Emergency Accommodations: https://www.mass.gov/the-open-meeting-law Hearing Assistance Devices Available on Request All agenda time and the order of items are approximate and subject to change. AGENDA ITEM SUMMARY LEXINGTON BOARD OF SELECTMEN MEETING AGENDA ITEM TITLE: Overview of FY2027 Revenue Projections, Budget Drivers, Current-Year Challenges, Policy Considerations, and Proposed Approaches to Closing the Budget Gap PRESENTER: Carolyn Kosnoff, Assistant TM Finance; Steve Bartha, Town Manager; Dr. Julie Hackett School Superint ITEM NUMBER: I.1 Sub Item: SUMMARY: Municipal and School leaders will present preliminary information and trends driving the development of the FY2027 Budget. The presentation includes the following materials: FY2027 Summit 1 Presentation Fiscal Indicators FY2027 Revenue Projections FY2027 Revenue Allocation Model FY2027 School Budget Drivers - in addition please review the pre-recorded video by Dr. Hackett, Superintendent of Schools at the following link: Video SUGGESTED MOTION: No vote is requested for this item. FOLLOW-UP: DATE AND APPROXIMATE TIME ON AGENDA: 11/20/2025 ATTACHMENTS: Description Type FY2027 Budget Summit 1 - Presentation Presentation FY27 LPS Budget Summit Presentation_November 2025 Backup Material Revenue Report - FY2027 Backup Material FY2027 Summit I Indicators_11.20.2025 Backup Material Town of LexingtonFY2027 Budget Summit INovember 20, 2025 Town of Lexington2Agenda: • Review of FY2025 Operating Results – Budget to Actual• FY2027 Revenue Projections• FY2027 Revenue Allocation Model• Closing the Budget Gap (now & later)• Budget Challenges, Planning and Policy Considerations • Review Future Summit Dates & Agendas Town of Lexington3FY2025 Operating Results Town of Lexington4FY2025 Operating Revenue Town of Lexington5FY2025 Operating Expenditures(A) (B) (C) (D) (B+C)/A (B/A)Revised BudgetYear-to-Date Expended EncumbrancesAvailable Budget% Used (Exp. & Enc.)% Used (Exp. Only)LPS Education Personal Services 120,852,942$ 119,500,582$ -$ 1,352,360$ 98.9% 98.9%LPS Education Expenses 19,655,425$ 19,342,294$ 1,581,290$ (1,268,159)$ 106.5% 98.4%Minuteman Regional Vocational 3,406,395$ 3,406,395$ -$ -$ 100.0% 100.0%Total Education 143,914,762$ 142,249,271$ 1,581,290$ 84,201$ 99.9% 98.8%Employee Benefits 38,133,895$ 36,594,219$ -$ 1,539,676$ 96.0% 96.0%Pension 10,743,076$ 10,743,076$ -$ -$ 100.0% 100.0%Facilities 14,565,854$ 13,756,207$ 771,564$ 38,083$ 99.7% 94.4%Debt Service, Insurance & Other 8,689,152$ 7,292,354$ 14,339$ 1,382,459$ 84.1% 83.9%Total Shared Expenses 72,131,977$ 68,385,856$ 785,903$ 2,960,218$ 95.9% 94.8%Municipal Personal Services 32,992,787$ 32,682,970$ -$ 309,817$ 99.1% 99.1%Municipal Expenses 16,742,374$ 14,349,626$ 1,307,344$ 1,085,404$ 93.5% 85.7%Total Municipal 49,735,161$ 47,032,596$ 1,307,344$ 1,395,221$ 97.2% 94.6%Total Operating Expenditures 265,781,900$ 257,667,723$ 3,674,537$ 4,439,640$ 98.3% 96.9%Summary of Operating Expenditures - General Fund• The turnback in employee expenses is due to actual shifts in Open Enrollment & Qualifying Events compared to the amount budgeted (80 positions at a blended rate) • The turnback in Debt Service, Insurance & Other includes unused Reserve Fund ($850K) and favorable debt service interest rates and financing schedule adjustments Town of Lexington6Free Cash Trend Town of Lexington7FY2027 Revenue Projections Town of Lexington8FY2027 Projected Revenue Summary• Tax levy is assumed to increase 2.5% plus $3.0M in new levy growth• Chapter 70 State Aid is assumed to be a minimum per student increase of $100/student • Local Receipts reflect increases in Motor Vehicle Excise (MVE) and $1.5M in Interest Income• Available Funds primarily reflect a reduction in Free Cash• Set Asides are primarily one-time funds set aside for one-time expenses Town of Lexington9Tax Levy New Growth (Revenue) Town of Lexington10Local Receipts (Revenue) Town of Lexington11Investment IncomeAnnual Rates of Return from MMDT*2027 Projected2026 EstimatedFY2025 ActualFY2024 ActualFY2023 ActualFY2022 ActualFY2021 ActualFY2020 ActualFY2019 ActualFY2018 ActualFY2017 ActualFY2016 Actual $ 1,500,000 $ 1,000,000 $ 6,279,974 $ 7,825,208 $ 4,401,414 $ 281,726 $ 277,170 1,297,265$ $ 1,781,573 $ 1,027,739 $ 573,023 $ 332,126 Interest Earned on General Fund*Annual Returns from Massachusetts Municipal Depository Trust (MMDT) Cash Portfolio: https://www.mymmdt.com/mmdt/pools/investment-pools/mmdt-cash-portfolio.do Town of Lexington12FY2027 Revenue Allocation Model Town of Lexington13FY2027 Revenue Allocation Model Town of Lexington14FY2027 Revenue Allocation Town of Lexington15FY2027 Shared ExpensesShared Expenses – FY2027• Shared Expenses represent 26-29% of the annual General Fund operating budget and are increasing at a faster rate than revenue growth.• Heath Insurance is a particular challenge, with double-digit increases in premiums budgeted for two consecutive years (FY26 ~11%; FY27~15%).• Public Facilities is driven by salaries in FY2027; utility projections reflect • Minuteman Budget reflects a projected 10% increase in assessment due to an increase in Lexington’s 5-year rolling enrollment. Town of Lexington16FY2027 Health InsuranceHealth Insurance TrendFY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027Advised % Increase in Premiums 8.0% 5.5% 5.5% 5.0% 5.0% 5.0% 7.0% 9.6% 11.0% 15.0%Budget Amount (GenFund) 24,932,984$ 25,542,389$ 25,951,569$ 27,026,973$ 28,270,148$ 29,554,494$ 31,612,815$ 33,947,889$ 37,401,396$ $ 42,448,468 Budget $ Inc vs PY 609,405$ 409,180$ 1,075,404$ 1,243,175$ 1,284,346$ 2,058,321$ 2,335,074$ 3,453,507$ 5,047,072$ Budget % Inc vs PY 2.4% 1.6% 4.1% 4.6% 4.5%7.0% 7.4% 10.2% 13.5%Actual Expense (GenFund) 21,949,687$ 22,585,970$ 24,133,417$ 25,448,028$ 26,483,798$ 27,711,900$ 28,999,884$ 32,466,784$ Actual % Increase 2.9% 6.9% 5.4% 4.1% 4.6% 4.6% 12.0%Health Insurance Turnback 2,983,297$ 2,956,419$ 1,818,152$ 1,578,945$ 1,786,350$ 1,842,594$ 2,612,931$ 1,481,105$ • Health Insurance premiums have been trending up for several years; turn-backs have trended lower• There are approximately 2,600 subscribers (1200 actives; 1400 retirees)• The Town covers 82% of the premium cost; subscribers contribute 18% • Each budget year has a placeholder for annual Open Enrollment & Other Qualifying Events (OEQE) (90 per year 2018-2019; 80 per year 2020-2027)• Every 1% increase in premiums adds approximately $330K in cost (a premium increase of 10% vs 15% would reduce cost by approx. $1.6M) Town of Lexington17FY2027 Revenues Set-Aside for Designated Expenses Town of Lexington18Discussion on Closing the FY2027 Budget Gap(comments and guidance requested for this item) Town of Lexington19Closing the Budget Gap – Revenue vs Expenses• Closing the budget gap will require an increase in projected revenues, or a decrease in expenses, or likely both• Revenues are currently projected conservatively, in line with longstanding methodologies, including the exclusive use of ongoing sources (i.e. no one-time revenues)• A more aggressive approach may be taken in projecting certain revenue line items (i.e. investment income), though this approach may result in shortfalls in subsequent years• Expenses are also projected conservatively. Some line items have built-in cushion to account for mid-year changes (i.e. health insurance) • Inflating projected revenue and/or removing the cushion from expense lines will add risk to the annual operating budget for the current and future years• Both actions will reduce the amount of free cash available in future years, impacting the ability to fund reserves and cash capital.Closing the Budget Gap ~ $4.7M Town of Lexington20Allocation Adjustments to Revenue Town of Lexington21Use of One-Time RevenuesPotential Revenue Adjustments:• Aggressively estimate Investment Income or other Local Receipts• Use one-time funds: • Free Cash• SPED Stabilization• General Stabilization• OPEB Fund• Divert annual funding from Reserves or investment in Cash Capital:• Tax Levy to Capital Stabilization Fund• Tax Levy to Cash Capital (roads & buildings)• Free Cash to OPEB• Minor adjustments to Local Receipts or State Aid may be made as the budget progressesThe use of one-time funds for the operating budget does not align with past, or best practices and will carry the budget deficit into FY2028. Certain actions, such as reducing reserves, may be viewed negatively by ratings agencies. Town of Lexington22Expense & Other ReductionsExpenses (School & Municipal):• Management will review detailed expense budgets and make targeted and/or broad % based reductions with input from Department Heads• Vacant positions may be left unfilled • Consider changes in the level of service currently providedOther Potential Adjustments:• Reduce OEQE in Health Budget• Reduce set-asides for Reserve Fund and/or unanticipated needs• Adjustment to term or schedule of within-levy debt financingReductions in expenses and set-asides will lead to smaller turn-backs in future years (i.e. lower amounts of available Free Cash). Lower Free Cash will impact the Capital Budget – either in the form of deferred maintenance or future increases in debt service. Town of Lexington23Municipal Operating ExpendituresContractual Expenses:• Refuse & Recycling collection & disposal• Curbside composting• Lexpress bus service (less grant funding)• PEG Access (Lexmedia)• Vehicles & vehicle maintenance• Contractual Services across multiple departmentsMunicipalExpense Budget DriversMunicipal Bargaining Units Current ContractLexington Municipal Employees Association FY 26-28Lexington Municipal Management Association FY 26-28SEIU Local 888 School Crossing Guards FY 26-28Local 1703 Building Custodians FY 25-27AFSCME Local 1703 Public Works FY 25-27Lexington Police Association FY 24-26Cary Memorial Library Staff Association FY 24-26AFSCME Public Safety Dispatchers FY 24-26Police Superiors Association FY 23-25IAFF Local 1491 Firefighters FY 23-25Compensation:FY2027 total projected increase ~ 3.9% (COLAs, Steps, Grades & Market Adj.): Town of Lexington24Other Policy Discussions & Considerations Town of Lexington25Mid-Term Budget Planning & Challenges• Managing the Operating Budget to avoid Operating Overrides -(Municipal & School) • Financing the Lexington High School Construction Project; managing taxpayer impact• Identifying new revenue sources• Planning for residential development and growing the commercial tax base• Guidelines for managing revenues and/or savings from energy investment, one-time and ongoing• Capital Investment, Planning & Debt Financing • Guidelines for funding Pensions & OPEB liabilitiesMid-term Budget Planning & Challenges Mid-Term Budget Planning & ChallengesTown of Lexington26•Maintain Existing Assets vs Creating New Assets: If less funding is available in future years, guidance will be needed on the priority between continuing capital programs and the creation of new assets.•Cash vs Debt Financing: The Town has enjoyed elevated levels of free cash inrecent history, which has allowed for a high level of capital investment while decreasing debt financing. If this trend begins to reverse, new guidelines may be needed for the use of debt financing for capital programs and projects. •Large Capital Projects post LHS (potential future debt exclusions):Long term capital planning improvements include East Lexington Fire Station Reconstruction, Clark Middle School HVAC, Library HVAC, and Town Office Building•Planning for Growth and/or Regulatory Changes: Increases in the Town’s population and/or regulatory changes such as environmental guidelines for Stormwater Management, may require significant levels of capital investment not currently in our long-term capital plans. Plans will evolve as new information becomes available.Capital Planning Guidelines Town of Lexington27Mid-Term Budget Planning & ChallengesFY26 FY27 FY28 FY29 FY30FY31 FY32 FY33 FY34 FY35General Fund (Issued) 4,682,433$ 3,697,662$ 3,323,830$ 3,040,230$ 2,759,660$ 2,434,660$ 2,166,340$ 1,674,800$ 1,538,000$ 964,400$ General Fund Authorized (Unissued) -$ 2,577,153$ 2,500,532$ 2,423,911$ 2,347,289$ 2,270,668$ 1,939,647$ 1,676,878$ 1,619,055$ 1,561,231$ Total Projected GF Debt Service 4,682,433$ 6,274,815$ 5,824,362$ 5,464,141$ 5,106,949$ 4,705,328$ 4,105,987$ 3,351,678$ 3,157,055$ 2,525,631$ Authorized General Fund Debt (Issued & Unissued):Unissued General Fund projects include Police Station Solar Canopy, Pine Meadows Clubhouse, 173 Bedford St Renovation, New Sidewalk Installations (Cedar St), Cary Memorial Library, and Hartwell Avenue Infrastructure Design. Town of Lexington28Pension FundActuarial Date 1/1/2006 7/1/2008 1/1/2010 1/1/2012 1/1/2014 1/1/2016 1/1/2018 1/1/2020 1/1/2021 1/1/2023 1/1/2025Total Liability 111,724$ 125,412$ 133,456$ 154,907$ 158,135$ 169,564$ 188,161$ 222,082$ 253,300$ 269,155$ 296,288$Pension Assets 98,759$ 113,880$ 118,559$ 121,340$ 130,169$ 144,700$ 164,000$ 178,655$ 194,047$ 221,429$ 262,274$Pension Liability (unfunded) 12,965$ 11,532$ 14,897$ 33,567$ 27,966$ 24,865$ 24,162$ 43,427$ 59,253$ 47,726$ 34,014$ Percent Funded 88.40% 90.80% 88.84% 78.33% 82.32% 85.34% 87.16% 80.45% 76.61% 82.27% 88.52% Town of Lexington29Pension Funding Schedule• The Retirement Board conducts new actuarial valuations every two years – the most recent as of 1/1/2025• The fund remains on target to achieve full funding in FY2030 (partial funding year)• The Town’s annual budget contribution will decrease significantly once the unfunded liability is paid down• This schedule should be reviewed with Financial Indicators 9, 10a & 10b• Funding slightly above 100% will ensure we maintain full funding and provide more flexibility for future yearsRetirement Fund – Adopted Funding Schedule as of 1/1/2025 Town of Lexington30OPEB FundActuarial Date (Dollars in ,000's) 6/30/2006 6/30/2009 6/30/2011 6/30/2013 6/30/2015 6/30/2017 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024OPEB Liability255,440$ 266,099$ 306,301$ 131,406$ 195,460$ 143,680$ 137,586$ 145,831$266,296$ 246,534$268,218$ 265,620$ Plan Assets/Net Position -$ 840$ 2,000$ 3,069$ 5,799$ 9,870$ 15,774$ 18,466$ 24,058$ 23,554$ 27,826$ 34,129$ Net OPEB Liability255,440$ 265,259$ 304,301$ 128,337$ 189,662$ 133,810$ 121,812$ 127,365$242,238$ 222,980$ 240,392$231,491$ Percent Funded 0.00% 0.32% 0.65% 2.34% 2.97% 6.87% 11.46% 12.66% 9.03% 9.55% 10.37% 12.85% Town of Lexington31Reflections & Future Meeting Dates Future Meeting DatesTown of Lexington32Future Meeting Dates: • FY2027 Summit II – December TBD (if needed)• FY2027 Select Board Budget Hearings – Dec. 3, 4 & 9, 2025• FY2027 White Book Summit – January 28, 2026 (Wed)• Annual Town Meeting Begins – March 30, 2026• Spring Policy & Planning Summit – TBD (after Town Meeting) Town of Lexington, MA FY2027 Revenue Projections Town Manager’s Office Finance Department Issued November 20, 2025 Revenue Executive Summary This revenue projection is being submitted to the Select Board as required under Section 13 of Chapter 753 of the Acts of 1968, as amended, An Act Establishing the Selectmen-Town Manager Form of Government in the Town of Lexington. The projection is based on the most current data available; as new information arises, the projections may be revised. The summary below presents Total General Fund Operating Revenues, and Net General Fund Revenues. •Total General Fund Operating Revenues are from annually recurring and non-recurring revenue sources, including transfers from Enterprise Funds, special revenue funds, and Specialized Stabilization Funds. •Net General Fund Revenues are Total General Fund Revenues less revenues recommended to be set-aside to fund designated expenses. A large portion of the revenue set-aside is from certified Free Cash, which is a one-time revenue that should not be used for ongoing expenses. In FY2027, Total General Fund Operating Revenues are projected to increase by approximately $7.19 million, or 2.3%. Net General Fund Revenues, those available to support school and municipal operating budgets, are projected to increase by $12.42 million, or 4.5%. FY2024 Actual FY2025 Actual FY2026 Recap FY2027 Projected FY2026-27 Change General Fund Revenue Summary $% Property Tax Levy (Table 1)$ 227,334,427 $ 239,713,641 $ 249,133,335 $ 258,361,669 $ 9,228,333 3.70% State Aid (Table 2)$ 19,695,534 $ 20,579,658 $ 21,532,602 $ 22,181,496 $ 648,894 3.01% Local Receipts (Table 3)$ 25,615,431 $ 25,740,345 $ 16,868,269 $ 17,821,440 $ 953,170 5.65% Available Funds (Table 4)$ 17,328,584 $ 17,250,345 $ 25,611,684 $ 22,112,842 $ (3,498,842) (13.66)% Revenue Offsets (Table 5)$ (1,813,993) $ (1,953,708) $ (2,103,696) $ (2,360,640) $ (256,944) 12.21% Enterprise Receipts (Table 6)$ 1,894,067 $ 1,873,817 $ 1,935,189 $ 2,047,125 $ 111,936 5.78% Total General Fund Operating Revenues $ 290,054,050 $ 303,204,098 $ 312,977,383 $ 320,163,931 $ 7,186,548 2.30% Less - Tax Levy Dedicated to Capital Stabilization Fund $ 4,036,373 $ 6,563,050 $ 6,580,908 $ 6,580,908 $ — —% Less: Revenues Set-Aside for Other Designated Purposes $ 20,156,257 $ 21,256,751 $ 28,345,019 $ 23,112,059 $ (5,232,960) (18.46)% Net General Fund Revenues $ 265,861,420 $ 275,384,297 $ 278,051,457 $ 290,470,965 $ 12,419,508 4.47% Detailed Description: Property Tax Levy: The FY2027 property tax levy is projected to increase approximately $9.23 million, or 3.70%. The projected levy is a function of the FY2026 levy limit increased by 2.5% per Proposition 2½, plus an increment for new growth. FY2027 new growth will be a function of construction activity for the period July 1, 2025 to June 30, 2026. FY2027 new growth is estimated at $3,000,000 based on a review of historical data and current trends. There is little commercial or industrial development in the pipeline, but the Town expects residential and personal property growth will remain stable in FY2026 and FY2027. Tax Levy Dedicated to Capital Stabilization Fund: In the Fall of 2021 the Town Manager proposed a new fiscal guideline, a Capital Stabilization Framework, to prepare for future capital projects. Beginning in FY2022, new levy growth generated from specified commercial and industrial development has been dedicated to the Capital Stabilization Fund (CSF) rather than becoming general revenue for the town’s operating budget. Projects include those with a Preliminary Site Development and Use Plan (PSDUP) approved by Town Meeting, or those approved due to the revamped zoning on Hartwell Ave. This framework has reserved levy capacity to absorb an increase in debt service for large capital projects, such as the high school. The set-aside funds will be applied in future years to mitigate exempt debt service created by those capital projects. A list of properties currently subject to this guideline is available Town of Lexington - FY2027 Revenue Projections in Table 1C, and the accumulated set-aside amount of prior year new growth is $6,580,908 for FY2027. Additional new levy growth from commercial and industrial projects for FY2027 is not included in the $3.00 million estimate noted above. Tax Levy Dedicated to Pension Fund: In FY2023 Takeda Pharmaceuticals (Takeda), a large industrial property owner discontinued their annual filing as a ‘manufacturer’ with the Commonwealth of Massachusetts. In previous years, the designation as ‘manufacturer’ exempted Takeda from personal property taxes. This change returned Takeda’s $39 million of personal property back to the tax roll which equaled $1.06 million in new taxes. The Town executed a plan to dedicate this unexpected revenue into the Pension Fund in future years in order to remain on our planned funding schedule. When the Town has fully paid down the pension liability (i.e. reached full-funding) the contribution from the tax levy to the Pension Fund will decrease by over $10 million annually. The amount set-aside to pension each year is growing by 2.5%. State Aid: State Aid is projected to increase by 3.01% in FY2027, primarily due to an expectation that the Town will receive minimum per pupil aid under the Chapter 70 formula. Projections assume the minimum contribution will be $100 per student, which aligns with funding in the last two years. The mandated amount is $30 per student per the Department of Elementary and Secondary Education (DESE), so this projection carries a modest amount of risk. The State is beginning to develop its FY2027 budget and initial FY2027 State Aid numbers will be available in January 2026, once the Governor releases her budget. Final figures are likely to be known in June 2026 when the Legislature adopts, and the Governor signs, the FY2027 State Budget. Local Receipts: FY2027 projections for each category of receipt are based on the history of actual collections and projections of 3- and 5-year historical averages, with some adjustments to specific categories due to economic and local conditions. FY2027 local receipts are estimated to increase by approximately $953,170 or 5.65% over FY2026 estimates, and details by category are detailed below. The main contributors to the increase in local receipts are investment income and motor vehicle excise, partly offset by a reduction in the estimates for other excise. Available Funds: Available Funds are projected to decrease by $(3,498,842), or (13.66)%, primarily due to a decrease in the amount of Free Cash available from the close of FY2025. Free Cash is currently projected to be approximately $20,500,000, with the final amount expected to be certified in December, ahead of finalizing the FY2027 budget. The FY2027 transfer from the PEG Access SRF is recommended at $200,000 less than the PEG operating budget, which results in support from the tax levy to continue level service PEG programming. This is level with the amount budgeted in FY2026, though PEG revenue in future years may continue to decline. Free Cash has not yet been certified and therefore is a conservative estimate; however any additional free cash will be utilized for cash capital, not to support the operating budget. Revenue Offsets: Revenue Offsets are projected to increase by approximately $256,944 or 12.21%. Revenue Offsets represent the set-aside of a portion of projected revenues legally required for particular purposes including: (1)the component of State Aid (Public Library aid reimbursement) that is distributed as Cherry Sheet aid, but, in fact, is a categorical grant that is not available to support General Fund operations; (2)Cherry Sheet assessments - estimated charges to be levied by the Commonwealth to cover the costs of state and regional services provided to the Town, based on updated projections issued alongside the Governor's budget; Town of Lexington - FY2027 Revenue Projections (3)the Assessor's Overlay account which covers the cost of abatements and exemptions granted to property taxpayers; and, (4)potential snow and ice deficits. The FY2027 increase in total Revenue Offsets is driven by the set-aside of $400,000 in estimated FY2027 revenue to cover a potential snow and ice deficit at the end of FY2026. For FY2026, $400,000 was set-aside, but did not end up being needed since actual FY2025 snow and ice removal expenses fell within their budgeted levels. Enterprise Receipts: This category of revenue represents transfers from the Water, Sewer, and Recreation Enterprise Funds to the General Fund to cover General Fund expenditures that support the operations of the water, sewer, and recreation departments. Town of Lexington - FY2027 Revenue Projections Revenue Summary FY2027 Projected FY2026-27 Change FY2024 Actual FY2025 Actual FY2026 Recap $% Table 1: Property Tax Levy Tax Levy $ 216,220,071 $ 227,348,851 $ 239,807,037 $ 249,133,335 $ 9,326,298 3.89% Prop. 2.5%$ 5,405,502 $ 5,683,721 $ 5,995,176 $ 6,228,333 $ 233,157 3.89% New Growth $ 6,824,943 $ 6,774,465 $ 3,331,122 $ 3,000,000 $ (331,122) (9.94)% Override/Excess Levy Capacity $ (14,424) $ (93,397) $—NA Subtotal $ 228,436,092 $ 239,713,640 $ 249,133,335 $ 258,361,669 $ 9,228,333 3.70% Table 2: State Aid Chapter 70 $ 17,609,131 $ 18,321,635 $ 19,344,035 $ 19,999,535 $ 655,500 3.39% Charter School Reimbursement $ 87,520 $ 149,983 $ 81,758 $ 81,758 $ — —% Unrestricted General Government Aid $ 1,832,124 $ 1,887,088 $ 1,907,846 $ 1,907,846 $ — —% Veterans' Benefits & Exemptions $ 83,921 $ 130,560 $ 109,400 $ 99,659 $ (9,741) (8.90)% Offsets (Library)$ 82,838 $ 90,392 $ 89,563 $ 92,698 $ 3,135 3.50% Subtotal $ 19,695,534 $ 20,579,658 $ 21,532,602 $ 22,181,496 $ 648,894 3.01% Table 3: Local Receipts Motor Vehicle Excise Tax $ 6,143,335 $ 6,606,284 $ 5,601,396 $ 6,198,000 $ 596,604 10.65% Other Excise $ 1,982,929 $ 1,691,969 $ 1,832,000 $ 1,685,000 $ (147,000) (8.02)% Penalties & Interest $ 479,253 $ 404,807 $ 492,000 $ 430,000 $ (62,000) (12.60)% PILOTs $ 731,519 $ 817,682 $ 762,000 $ 767,000 $ 5,000 0.66% Rentals $ 479,390 $ 308,021 $ 352,623 $ 359,190 $ 6,566 1.86% Departmental-Schools $ 475,325 $ 533,446 $ 300,000 $ 299,000 $ (1,000) (0.33)% Departmental-Municipal $ 3,629,754 $ 3,820,994 $ 3,395,950 $ 3,507,950 $ 112,000 3.30% Licenses & Permits $ 3,226,256 $ 4,616,400 $ 3,016,300 $ 2,958,300 $ (58,000) (1.92)% Special Assessments $ 10,370 $ 13,550 $ — $ — $ — —% Fines & Forfeits $ 172,123 $ 111,884 $ 116,000 $ 117,000 $ 1,000 0.86% Investment Income $ 7,825,208 $ 6,279,974 $ 1,000,000 $ 1,500,000 $ 500,000 50.00% Miscellaneous Non-Recurring $ 459,968 $ 535,335 $ — $ — $ — —% Subtotal $ 25,615,431 $ 25,740,345 $ 16,868,269 $ 17,821,440 $ 953,170 5.65% Table 4: Available Funds Parking Fund $ 100,000 $ 250,000 $ 425,500 $ 425,500 $ — —% Cemetery Sale of Lots Fund $ 50,408 $ 123,000 $ 151,875 $ 147,000 $ (4,875) (3.21)% Free Cash $ 15,919,159 $ 15,838,627 $ 24,096,825 $ 20,500,000 $ (3,596,825) (14.93)% Health Claims Trust Fund $ 240,000 $ 32,270 $ — $ — $ — —% Transportation Demand Management Stab. Fund $ 171,000 $ 171,000 $ 171,000 $ 171,000 $ — —% Traffic Mitigation Stabilization Fund $ 80,000 $ — $ — $ — $ — —% Transportation Management Overlay District (TMOD) Stabilization Fund $ 42,000 $ — $ — $ — $ — —% Ambulance Stabilization Fund $ — $ 125,000 $ — $ — $ — —% PEG Access Special Revenue Fund $ 586,833 $ 646,214 $ 596,441 $ 694,392 $ 97,951 16.42% Transportation Network Company (TNC) Special Revenue Fund $ 7,684 $ 13,234 $ 18,043 $ 22,950 $ 4,907 27.20% Betterments Fund $ 11,500 $ 1,000 $ 2,000 $ 2,000 $ — —% Visitors Center Stabilization Fund $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ — — General Stabilization Fund $ — $ — $ — $ — $ — —% Special Education Stabilization Fund $ — $ — $ — $ — $ — —% Recreation Enterprise Fund $ — $ — $ 100,000 $ 100,000 $ — —% Use of BAN Premiums $ 70,000 $ — $ — $ — $ — —% Subtotal $ 17,328,584 $ 17,250,345 $ 25,611,684 $ 22,112,842 $ (3,498,842) (13.66)% Town of Lexington - FY2027 Revenue Projections Table 5: Revenue Offsets Cherry Sheet Assessments $ (981,462) $ (1,112,390) $ (1,264,133) $ (1,116,126) $ 148,007 (11.71)% Cherry Sheet Offsets - Public Libraries $ (82,531) $ (91,318) $ (89,563) $ (94,514) $ (4,951) 5.53% Overlay (abatements)$ (750,000) $ (750,000) $ (750,000) $ (750,000) $ — —% Snow Deficit $ — $ — $ — $ (400,000) $ (400,000) — Subtotal $ (1,813,993) $ (1,953,708) $ (2,103,696) $ (2,360,640) $ (256,944) 12.21% Table 6: Enterprise Receipts Water $ 1,011,340 $ 968,301 $ 1,002,244 $ 1,091,745 $ 89,501 8.93% Wastewater (Sewer)$ 588,040 $ 596,525 $ 614,684 $ 627,572 $ 12,888 2.10% Recreation & Community Programs $ 294,687 $ 308,991 $ 318,261 $ 327,808 $ 9,547 3.00% Subtotal $ 1,894,067 $ 1,873,817 $ 1,935,189 $ 2,047,125 $ 111,936 5.78% Gross General Fund Revenues $ 291,155,715 $ 303,204,097 $ 312,977,383 $ 320,163,931 $ 7,186,548 2.30% Less: Property Tax Levy Dedicated to the Capital Stabilization Fund $ 4,036,373 $ 6,563,050 $ 6,580,907 $ 6,580,907 $ — —% Less: Revenues Set Aside for Designated Expenses $ 20,156,257 $ 21,256,751 $ 28,345,019 $ 23,112,059 $ (5,232,960) (18.46)% Net General Fund Revenues Available for Appropriation $ 266,963,085 $ 275,384,296 $ 278,051,457 $ 290,470,965 $ 12,419,508 4.47% Town of Lexington - FY2027 Revenue Projections Revenues Set Aside for Designated Expenses: This represents components of Gross General Fund Revenues that are set aside for designated purposes. The proposed purposes for FY2027 are shown in the table below. Financing Sources Tax Levy Free Cash Other Total Notes 1 Set-Aside for Unanticipated Current Fiscal Year Needs $ — $ 250,000 $ — $ 250,000 Reserve for appropriation at the 2026 Annual Town Meeting to fund supplemental appropriations to the FY2026 (current year) budget. 2 Other Post-Employment Benefits (OPEB)$ — $ 2,129,721 $ — $ 2,129,721 Appropriate to OPEB Trust. 3 Unallocated $ — $ 1,000,000 $ — $ 1,000,000 Set aside for yet-to-be identified one-time needs in the FY2027 budget & reserve for future budgets 4 Cash Capital $ — $ 16,720,279 $ 22,950 $ 16,743,229 Free Cash, Tax Levy and other available funds to support capital improvements. 5 Appropriate into Capital Stabilization Fund $ 6,580,908 $ — $ — $ 6,580,908 To meet future capital/debt service needs and provide taxpayer debt mitigation for capital projects 6 Street Improvement Program $ 2,746,777 $ — $ — $ 2,746,777 Tax Levy designated for long-term street maintenance plan. 7 Municipal Building Envelope and Systems $ 242,332 $ — $ — $ 242,332 Initially funded in 2006 override; increases by 2.5% per year. 8 Warrant Articles $ — $ — $ — $ — 9 Subtotal $ 9,570,016 $ 20,100,000 $ 22,950 $ 29,692,966 Community Center $ 268,334 10 Funding for Pension Schedule $ — $ 400,000 $ — $ 400,000 Amount of incremental increase in the updated Pension Funding schedule will continue to be supported with Free Cash in FY2027. 11 Grand Total $ 9,570,016 $ 20,500,000 $ 22,950 $ 30,092,966 Town of Lexington - FY2027 Revenue Projections Table 1-A: Tax Levy History Fiscal Year Previous Year Levy Limit(incl. amended new growth) Allowable 2½% Increase Allowable New Construction Dedicated New Levy Growth* Voter Approved Override Total Tax Levy Limit Exempt Debt Service Allowable Amount to raise from Property Tax Unused Tax Capacity Actual Tax Levy 2008 $ 96,012,202 $ 2,400,305 $ 2,485,650 $ — $ 3,981,589 $ 104,879,746 $ 5,372,874 $ 110,252,620 $ 45,961 $ 110,206,659 2009 $ 104,879,746 $ 2,621,994 $ 3,276,649 $ — $ — $ 110,778,389 $ 5,632,642 $ 116,411,031 $ 72,867 $ 116,338,164 2010 $ 110,778,389 $ 2,769,460 $ 2,431,902 $ — $ — $ 115,979,750 $ 5,746,384 $ 121,726,134 $ 58,674 $ 121,667,460 2011 $ 115,934,719 $ 2,898,368 $ 3,426,550 $ — $ — $ 122,259,637 $ 5,753,550 $ 128,013,187 $ 57,464 $ 127,955,723 2012 $ 122,259,637 $ 3,056,491 $ 3,346,536 $ — $ — $ 128,662,664 $ 5,379,620 $ 134,042,285 $ 46,950 $ 133,995,335 2013 $ 128,662,664 $ 3,217,107 $ 3,538,945 $ — $ — $ 135,440,316 $ 6,199,081 $ 141,639,396 $ 53,534 $ 141,585,863 2014 $ 135,440,316 $ 3,386,008 $ 3,017,335 $ — $ — $ 141,843,659 $ 6,927,654 $ 148,771,313 $ 1,175 $ 148,770,138 2015 $ 141,843,659 $ 3,546,091 $ 2,896,983 $ — $ — $ 148,286,733 $ 7,423,332 $ 155,710,065 $ 74,194 $ 155,635,871 2016 $ 148,286,733 $ 3,709,681 $ 2,772,633 $ — $ — $ 154,769,047 $ 8,324,697 $ 163,093,744 $ 18,897 $ 163,074,847 2017 $ 154,781,455 $ 3,869,536 $ 3,309,344 $ — $ — $ 161,960,336 $ 8,330,185 $ 170,290,521 $ 94,519 $ 170,196,001 2018 $ 161,960,336 $ 4,049,008 $ 3,357,135 $ — $ — $ 169,366,479 $ 8,292,690 $ 177,659,169 $ 34,354 $ 177,624,815 2019 $ 169,402,066 $ 4,235,052 $ 3,270,004 $ — $ — $ 176,907,122 $ 9,360,000 $ 186,267,122 $ 66,068 $ 186,201,054 2020 $ 176,907,122 $ 4,422,678 $ 3,608,503 $ — $ — $ 184,938,303 $ 11,128,255 $ 196,066,558 $ 116,789 $ 195,949,768 2021 $ 184,938,303 $ 4,623,458 $ 4,853,553 $ — $ — $ 194,415,314 $ 12,684,830 $ 207,100,143 $ 85,435 $ 207,014,708 2022 $ 194,415,314 $ 4,860,383 $ 4,923,938 $ 57,138 $ — $ 204,256,773 $ 13,947,991 $ 218,204,763 $ 28,032 $ 218,176,732 2023 $ 204,256,773 $ 5,106,419 $ 4,120,880 $ 2,735,999 $ — $ 216,220,071 $ 15,208,385 $ 231,428,456 $ 32,849 $ 231,395,606 2024 $ 216,220,071 $ 5,405,502 $ 4,521,707 $ 2,303,236 $ — $ 227,348,851 $ 16,311,649 $ 243,660,500 $ 14,424 $ 243,646,076 2025 $ 227,348,851 $ 5,683,721 $ 4,247,789 $ 2,526,677 $ — $ 239,807,037 $ 16,591,920 $ 256,398,957 $ 93,396 $ 256,305,561 2026**$ 239,807,037 $ 5,995,176 $ 3,313,264 $ 17,858 $ — $ 249,133,335 $ 16,207,456 $ 265,340,791 $ — $ 265,340,791 2027**$ 249,133,335 $ 6,228,333 $ 3,000,000 $ — $ — $ 258,361,669 $ 16,855,583 $ 275,217,252 $ — $ 275,217,252 Note: *Dedicated New Levy Growth includes amounts set-aside into the Capital Stabilization Fund (CSF). For FY2023 the $2,735,999 new growth set-aside included $1,060,000 dedicated to the Pension Fund and $1,675,999 into the CSF. ** FY2026 & FY2027 Exempt Debt Service is based on debt modeling of current authorizations excluded from the limits of Proposition 2½ and projects that are candidates for future debt exclusion projects. Amount shown is projected debt service, net of the application of Capital Stabilization funds to mitigate taxpayer impact. Town of Lexington - FY2027 Revenue Projections Table 1-A: Tax Levy History 8 November 20, 2025 Table 1-B: New Tax Levy Growth New Growth to the Levy Limit Residential Commercial/Industrial Personal C/I Dedicated to CSF Personal Dedicated to Pension FY2017 FY2018 FY2019 FY2020 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 $— $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 Fiscal Year Residential Commercial/ Industrial C/I Dedicated to CSF Personal Personal Dedicated to Pension Total FY2017 $1,858,460 $507,820 $943,064 $3,309,344 FY2018 $1,908,536 $743,645 $704,954 $3,357,135 FY2019 $2,022,777 $480,671 $766,558 $3,270,005 FY2020 $1,698,582 $793,718 $1,116,203 $3,608,503 FY2021 $1,973,034 $1,639,128 $1,241,391 $4,853,553 FY2022 $1,876,839 $1,710,247 $57,138 $1,336,852 $4,981,076 FY2023 $1,933,882 $1,386,864 $1,675,999 $800,135 $1,060,000 $6,856,879 FY2024 $1,790,882 $1,121,047 $2,303,236 $1,609,778 $0 $6,824,943 FY2025 $2,246,368 $541,401 $2,526,677 $1,460,019 $0 $6,774,465 FY2026 $2,161,122 $0 $17,858 $1,152,142 $0 $3,331,122 Totals $19,470,482 $8,924,541 $6,580,908 $11,131,096 $1,060,000 $47,167,025 Three Year Average FY2024-2026 C/I/P $1,961,462 Residential $2,066,124 Total $4,027,587 Five Year Average FY2022-2026 C/I/P $2,223,697 Residential $2,001,819 Total $4,225,515 Ten Year Average FY2017-2026 C/I/P $2,005,564 Residential $1,947,048 Total $3,952,612 Note: FY2021 and FY2022 include approximately $1.2 million and $1.5 million, respectively, for new construction at 75 Hayden Ave. FY2023 includes $1.25 million from 1050 Waltham St. and $1.06 million of new Personal Property at Takeda. FY2024 includes $1.1 million from 1050 Waltham St. and $857K from 20 Maguire Rd. FY2025 includes $2.5 million from 440 Bedford St. Town of Lexington - FY2027 Revenue Projections Table 1-B: New Tax Levy Growth 9 November 20, 2025 Table 1-C: New Levy Growth Dedicated to the Capital Stabilization Fund by Property Property Address FY2023 Actual FY2024 Actual FY2025 Actual FY2026 Recap Accumulated Tax-Levy Set-Aside FY2027 Projected 1050 Waltham St.$ 1,252,291 $ 1,101,665 $ — $ — $ 2,353,956 $ 2,353,956 186 Bedford St.$ 24,488 $ 9,885 $ 32,156 $ 17,858 $ 84,387 $ 105,838 55 Watertown St.$ 399,220 $ 169,897 $ — $ — $ 569,117 $ 604,804 440 Bedford St.$ — $ 164,207 $ 2,494,520 $ — $ 2,658,727 $ 2,658,727 20 Maguire Rd.$ — $ 857,582 $ — $ — $ 857,582 $ 857,582 Subtotal - CSF Tax Levy $ 1,675,999 $ 2,303,236 $ 2,526,677 $ 17,858 $ 6,580,908 $ 6,580,908 Note: Beginning in FY2022, new levy growth generated from specified projects are dedicated to the Capital Stabilization Fund (CSF) rather than falling to general revenue for the town budget. Projects include those with a Preliminary Site Development and Use Plan (PSDUP) approved by Town Meeting, and those approved due to the revamped zoning on Hartwell Ave. In this way, fiscal leaders are setting aside funds to mitigate the future burden on the taxpayers for large capital projects such as the High School reconstruction. Town of Lexington - FY2027 Revenue Projections Table 1-B: New Tax Levy Growth 10 November 20, 2025 Table 2-A: State Aid (Cherry Sheet) Net State Aid - FY2021 to FY2027, Projected $16,157,540 $16,623,758 $17,017,491 $19,612,696 $20,489,266 $21,443,039 $22,088,798 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 $15,000,000 $17,500,000 $20,000,000 $22,500,000 State Aid-Cherry Sheet:FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual FY2026 Cherry Sheet 2027 Projected Education: Chapter 70 $ 14,438,034 $ 14,647,494 $ 15,063,127 $ 17,609,131 $ 18,321,635 $ 19,344,035 $ 19,999,535 Charter Tuition Reimbursement $ 60,652 $ 101,651 $ 60,734 $ 87,520 $ 149,983 $ 81,758 $ 81,758 Sub-Total, All Education Items $ 14,498,686 $ 14,749,145 $ 15,123,861 $ 17,696,651 $ 18,471,618 $ 19,425,793 $ 20,081,293 General Government: Unrestricted General Government Aid $ 1,627,400 $ 1,769,494 $ 1,775,314 $ 1,832,124 $ 1,887,088 $ 1,907,846 $ 1,907,846 Veterans Benefits $ 18,904 $ 20,416 $ 24,178 $ 17,954 $ 11,602 $ 19,236 $ 26,642 Exemptions: Vets, Blind, Surviving Spouses $ 12,550 $ 84,703 $ 94,138 $ 65,967 $ 118,958 $ 90,164 $ 73,017 Offset Items: Public Libraries $ 63,823 $ 53,560 $ 77,628 $ 82,838 $ 90,392 $ 89,563 $ 92,698 Sub-Total, General Government $ 1,722,677 $ 1,928,173 $ 1,971,258 $ 1,998,883 $ 2,108,040 $ 2,106,809 $ 2,100,203 Gross Cherry Sheet Totals $ 16,221,363 $ 16,677,318 $ 17,095,119 $ 19,695,534 $ 20,579,658 $ 21,532,602 $ 22,181,496 Less Offset Items:$ (63,823) $ (53,560) $ (77,628) $ (82,838) $ (90,392) $ (89,563) $ (92,698) Net Cherry Sheet Totals $ 16,157,540 $ 16,623,758 $ 17,017,491 $ 19,612,696 $ 20,489,266 $ 21,443,039 $ 22,088,798 Note: From FY2019 to FY2023 Lexington received the minimum per-pupil amount of State Aid under the Chapter 70 formula. In FY2024 State revenue was significantly higher as Lexington’s foundation budget grew faster than our required local contribution, requiring a higher contribution from the State under the Chapter 70 formula. Minimum aid of $100 per pupil is projected for FY2027. Statutory parameters of the Chapter 70 formula is $30 per pupil, however the State has elected higher amounts for the last several years ranging from $60-$104 per pupil. Town of Lexington - FY2027 Revenue Projections Table 2-A: State Aid (Cherry Sheet) 11 November 20, 2025 Table 3-A: Local Receipts Summary Local Receipts - FY2021-25 Actuals; FY2026-27 Projected $15,358,064 $16,714,476 $23,992,008 $25,615,430 $25,740,346 $17,039,873 $17,821,440 FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Motor Vehicle Excise Tax $ 5,335,129 $ 5,330,281 $ 5,846,393 $ 6,143,335 $ 6,606,284 $ 5,773,000 $ 6,198,000 $ 6,198,671 $ 5,852,285 Other Excise $ 813,643 $ 1,351,204 $ 1,683,396 $ 1,982,929 $ 1,691,969 $ 1,832,000 $ 1,685,000 $ 1,786,098 $ 1,504,628 Penalties & Interest $ 445,590 $ 590,842 $ 413,104 $ 479,253 $ 404,807 $ 492,000 $ 430,000 $ 432,388 $ 466,719 PILOT's $ 660,966 $ 682,107 $ 709,774 $ 731,519 $ 817,682 $ 762,000 $ 767,000 $ 752,991 $ 720,410 Rentals $ 473,201 $ 394,624 $ 319,837 $ 479,390 $ 308,021 $ 352,623 $ 359,190 $ 369,082 $ 395,015 Departmental-Schools $ 337,909 $ 1,169,058 $ 550,130 $ 475,325 $ 533,446 $ 300,000 $ 299,000 $ 519,634 $ 613,174 Departmental-Municipal $ 2,398,261 $ 2,742,233 $ 3,245,975 $ 3,629,754 $ 3,820,994 $ 3,395,950 $ 3,507,950 $ 3,565,574 $ 3,168,972 Licenses & Permits $ 3,542,914 $ 3,171,808 $ 5,840,007 $ 3,226,256 $ 4,616,400 $ 3,016,300 $ 2,958,300 $ 4,560,888 $ 4,079,477 Special Assessments $ 25,644 $ 18,165 $ 13,531 $ 10,370 $ 13,550 $ — $ — $ — $ — Fines & Forfeits $ 59,820 $ 79,398 $ 111,594 $ 172,123 $ 111,884 $ 116,000 $ 117,000 $ 131,867 $ 106,964 Investment Income $ 277,170 $ 281,726 $ 4,401,414 $ 7,825,208 $ 6,279,974 $ 1,000,000 $ 1,500,000 $ 6,168,865 $ 3,813,098 Miscellaneous Non-Recurring $ 987,817 $ 903,030 $ 856,853 $ 459,968 $ 535,335 $ — $ — $ — $ — Total $ 15,358,064 $ 16,714,476 $ 23,992,008 $ 25,615,430 $ 25,740,346 $ 17,039,873 $ 17,821,440 $ 24,486,058 $ 20,720,742 Note: Local Receipts make up 5.6% of the projected FY2027 total revenues for the Town of Lexington. Local receipts are one indicator of the status of economic growth in the community. Certain local receipts (e.g., motor vehicle excise, licenses and permits, investment income, hotel/ motel) are closely related to the overall growth in the State’s economy. Town of Lexington - FY2027 Revenue Projections Table 3: Local Receipts 12 November 20, 2025 Table 3-B: Local Receipt Detail - Motor Vehicle Excise Tax Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Motor Vehicle Excise Tax $ 5,335,129 $ 5,330,281 $ 5,846,393 $ 6,143,335 $ 6,606,284 $ 5,773,000 $ 6,198,000 $ 6,198,671 $ 5,852,285 MOTOR VEHICLE EXCISE TAX-PR $ 1,065 $ 874 $ 24 $ 403 $ 51 $ — $ — 15 MOTOR VEHICLE EXCISE TAX $ 56 $ 45 $ 193 $ — $ — $ — $ — 16 MOTOR VEHICLE EXCISE TAX $ 559 $ 36 $ (27) $ 166 $ — $ — $ — 17 MOTOR VEHICLE EXCISE TAX $ 1,569 $ 4,111 $ 1,074 $ 429 $ — $ — $ — 18 MOTOR VEHICLE EXCISE TAX $ 7,410 $ 1,792 $ 1,720 $ 182 $ 115 $ — $ — 19 MOTOR VEHICLE EXCISE TAX $ 20,914 $ 5,945 $ 1,155 $ 517 $ 174 $ — $ — 20 MOTOR VEHICLE EXCISE TAX $758,643 $ 29,286 $ 2,768 $ 1,739 $ 537 $ — $ — 21 MOTOR VEHICLE EXCISE TAX $4,544,913 $688,159 $ 15,954 $ (58) $ 1,025 $ — $ — 22 MOTOR VEHICLE EXCISE TAX NA $4,600,034 $738,734 $ 20,730 $ 3,655 $ — $ — 23 MOTOR VEHICLE EXCISE TAX NA $4,600,034 $5,084,800 $ 718,903 $ 26,349 $ — $ — 24 MOTOR VEHICLE EXCISE TAX NA NA NA $5,402,512 $ 876,406 $ — $ — 25 MOTOR VEHICLE EXCISE TAX NA NA NA NA $5,698,023 $ 5,773,000 $ — 26 MOTOR VEHICLE EXCISE TAX NA NA NA NA NA NA $ 6,198,000 Town of Lexington - FY2027 Revenue Projections Table 3: Local Receipts 13 November 20, 2025 Table 3-C: Local Receipt Detail - Other Excise Taxes Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Other Excise Taxes $ 813,643 $ 1,351,204 $ 1,683,395 $ 1,982,930 $ 1,691,970 $ 1,832,000 $ 1,685,000 $ 1,786,098 $ 1,504,628 OTHER EXCISE-HOTEL/MOTEL $ 356,743 $ 613,622 $ 718,671 $ 841,526 $ 698,372 $ 780,000 $ 700,000 $ 752,856 $ 645,787 OTHER EXCISE-JET FUEL $ 152,253 $ 265,420 $ 495,863 $ 631,677 $ 440,658 $ 563,000 $ 460,000 $ 522,733 $ 397,174 OTHER EXCISE - MEALS $ 304,647 $ 472,162 $ 468,861 $ 509,727 $ 552,940 $ 489,000 $ 525,000 $ 510,509 $ 461,667 Note: The 0.75% local option meals excise tax became effective on January 1, 2010. The 2% local option hotel/motel excise became effective on July 1, 2010. For FY2027 Other Excise receipts were adjusted to conservatively reflect the average of the last two fiscal years as the 3-year and 5-year averages include pandemic years when receipts were lower. Projections for Hotel/Motel have mostly returned to pre-pandemic revenue levels, despite the closure of one hotel. This category may receive an additional boost due to the local Lex250 celebrations in FY2026. Jet Fuel is projected at the average of FY2024 and FY2025 which both reflect recent trends in fuel prices and increased activity at Hanscom due to private jet expansion. Meals are budgeted at the average of FY2024 and FY2025 which reflect pre-pandemic revenue levels. Table 3-D: Local Receipt Detail - Penalties & Interest Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Penalties & Interest $ 445,590 $ 590,843 $ 413,104 $ 479,254 $ 404,807 $ 492,000 $ 430,000 $ 432,388 $ 466,720 PENALTIES AND INTEREST P.P. TAX $ 12,494 $ 11,785 $ 9,733 $ 10,940 $ 24,048 $ 10,000 $ 14,000 $ 14,907 $ 13,800 PENALTIES & INTEREST R.E. TAX $ 291,465 $ 273,635 $ 254,616 $ 271,619 $ 241,140 $ 266,000 $ 255,000 $ 255,791 $ 266,495 PENALTIES & INTEREST TAX LIENS $ 37,277 $ 229,717 $ 66,193 $ 112,620 $ 56,622 $ 136,000 $ 78,000 $ 78,478 $ 100,486 PENALTIES & INTEREST M.V. TAX $ 104,354 $ 75,706 $ 82,562 $ 84,075 $ 82,997 $ 80,000 $ 83,000 $ 83,212 $ 85,939 Note: Penalties and Interest are not budgeted at full 3-year or 5-year average since they are highly fluid and will vary due to case-by-case circumstances, including the amount of unpaid property taxes outstanding (Lexington typically collects 98%-99% of committed property taxes). Town of Lexington - FY2027 Revenue Projections Table 3: Local Receipts 14 November 20, 2025 Table 3-E: Local Receipt Detail - Payments-in-Lieu-of-Taxes (PILOTs) Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average PILOTs $ 661,266 $ 682,107 $ 709,774 $ 731,518 $ 762,281 $ 762,000 $ 767,000 $ 734,524 $ 709,330 Town of Arlington, MA $ 2,048 $ 2,048 $ 2,048 $ 2,048 $ 2,048 $ 2,048 $ 2,048 $ 2,048 $ 2,048 City of Cambridge, MA $ 1,985 $ 1,985 $ 1,985 $ 1,985 $ 1,985 $ 1,985 $ 1,985 $ 1,985 $ 1,985 Lexington Lodge #2204 BPOE (Elks)$ 7,236 $ 7,236 $ 7,453 $ 7,677 $ 7,907 $ 7,455 $ 7,679 $ 7,679 $ 7,502 Brookhaven $ 587,326 $ 602,009 $ 617,060 $ 632,486 $ 648,298 $ 664,506 $ 664,506 $ 632,615 $ 617,436 Trustees of the Supreme Council (Masons)$ 21,058 $ 21,058 $ 21,690 $ 22,340 $ 23,010 $ 21,696 $ 22,347 $ 22,347 $ 21,831 Waldorf School $ 20,156 $ 29,394 $ 42,354 $ 43,412 $ 44,498 $ 45,612 $ 46,752 $ 43,421 $ 35,963 Lexington Housing Authority $ 20,864 $ 18,077 $ 16,863 $ 21,228 $ 28,846 $ 18,723 $ 22,312 $ 22,312 $ 21,176 Miscellaneous $ 593 $ 300 $ 321 $ 342 $ 5,689 $ — $ — $ 2,117 $ 1,389 Note: 1.PILOTs are projected based on historical averages, except for Brookhaven and the Waldorf School which increase annually per written agreements. The Brookhaven PILOT was renegotiated in May 2017 as part of rezoning approved at Town Meeting; increased payments began in FY2020. Town of Lexington - FY2027 Revenue Projections Table 3: Local Receipts 15 November 20, 2025 Table 3-F: Local Receipt Detail - Rentals Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Rentals $ 473,201 $ 394,624 $ 319,837 $ 479,390 $ 308,020 $ 352,623 $ 359,189 $ 369,082 $ 395,014 Buildings $ 69,900 $ 75,267 $ 47,468 $ 53,699 $ 54,357 $ 53,989 $ 54,085 $ 51,841 $ 60,138 Cell Towers $ 403,301 $ 319,357 $ 272,369 $ 425,691 $ 253,663 $ 298,634 $ 305,104 $ 317,241 $ 334,876 MWRA $ 118,472 $ 75,923 $ — $ 158,746 $ 41,330 $ 82,963 $ 82,963 Verizon $ 56,275 $ 57,964 $ 59,703 $ 61,494 $ 63,339 $ 63,339 $ 65,239 Sprint/Nextel $ 51,547 $ — $ — $ — $ — $ — $ — AT&T $ 41,523 $ 42,769 $ 44,052 $ 96,406 $ 108,704 $ 52,721 $ 54,303 T-Mobile $ 90,483 $ 97,702 $ 123,614 $ 64,045 $ 40,291 $ 45,293 $ 46,652 Temp. Site for Police Antenna $ 45,000 $ 45,000 $ 45,000 $ 45,000 $ — $ 54,318 $ 55,948 Note: Building Rentals reflect rental agreements with the Munroe Center for the Arts, the Waldorf School, LexFarm, and outdoor dining agreements. The Munroe Center for the Arts revenue for FY2018-2022 reflects repayment to the Town for a roofing project; the last year for repayment was FY2022. Sprint terminated their cell tower lease agreement with the Town effective March 2022. Beginning in FY2025 the Town receives sublease revenue from the new antenna behind the Police Station which replaced the temporary antenna. Table 3-G: Local Receipt Detail - Schools Departmental Revenue Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Schools Departmental Revenue $ 337,910 $ 1,169,059 $ 550,130 $ 475,326 $ 533,446 $ 300,000 $ 299,000 $ 519,634 $ 613,173 TUITION $ 10,942 $ — $ — $ — $ — $ — $ — $ — $ 2,188 MEDICAID REIMBURSEMENT $ 287,285 $ 954,638 $ 503,905 $ 388,555 $ 473,714 $ 250,000 $ 250,000 $ 455,391 $ 521,619 STUDENT PARKING FEES $ 3,605 $ 8,925 $ 4,375 $ 8,750 $ 8,460 $ 6,000 $ — $ 7,195 $ 6,823 TRANSCRIPT FEES $ 36,078 $ 45,030 $ 41,850 $ 47,076 $ 51,272 $ 44,000 $ 49,000 $ 46,733 $ 44,261 HOMELESS STUDENT TRANSPORTATION $ — $ 160,466 $ — $ 30,945 $ — $ — $ — $ 10,315 $ 38,282 Note: Program rules for Medicaid reimbursements were becoming more restrictive prior to the pandemic, and reimbursements are dependent on student eligibility and services offered. Town was able to recoup many expenses that were related to the pandemic in FY2022, some which continued into FY2023. The School Department has advised that expected reimbursements are currently steady but future restrictions may curtail the Town’s ability to recoup expenses. Town of Lexington - FY2027 Revenue Projections Table 3: Local Receipts 16 November 20, 2025 Table 3-H: Local Receipt Detail - Municipal Departmental Revenue Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Municipal Department Revenue $ 2,398,261 $ 2,742,234 $ 3,245,915 $ 3,621,750 $ 3,782,243 $ 3,293,950 $ 3,403,950 $ 3,549,966 $ 3,158,081 MISC. FEES $ 7,266 $ 7,471 $ 4,429 $ 13,486 $ 5,385 $ 7,500 $ 7,500 $ 7,766 $ 7,607 NET METERING CREDIT REVENUE $ 674,298 $ 642,150 $ 841,417 $ 823,246 $ 920,511 $ 830,000 $ 869,000 $ 861,724 $ 780,324 MUNICIPAL LIEN CERTIFICATES $ 42,645 $ 35,609 $ 20,366 $ 19,225 $ 18,400 $ 25,000 $ 20,000 $ 19,330 $ 27,249 TOWN CLERK FEE $ 36,943 $ 30,725 $ 34,278 $ 36,055 $ 35,134 $ 34,000 $ 34,000 $ 35,155 $ 34,627 REGISTRY SURCHARGE FEE $ 10,020 $ 10,100 $ 10,235 $ 14,030 $ 13,660 $ 11,000 $ 11,000 $ 12,642 $ 11,609 RENTAL CAR SURCHARGE FEES $ 1,199 $ 2,264 $ 3,233 $ 3,385 $ 2,868 $ 2,500 $ 2,500 $ 3,162 $ 2,590 CONSERVATION FEES $ 27,353 $ 30,039 $ 22,627 $ 24,728 $ 46,851 $ 26,000 $ 26,000 $ 31,402 $ 30,320 P.B. FILING & REVIEW FEES $ 24,000 $ 61,500 $ 26,181 $ 52,653 $ 106,954 $ 40,000 $ 40,000 $ 61,929 $ 54,258 ANR PLAN FILING FEES $ 9,000 $ 150 $ 150 $ 650 $ 2,200 $ — $ — $ 1,000 $ 2,430 POLICE DEPT REC-HOUSE ALARM $ 7,720 $ 9,520 $ 10,120 $ 8,560 $ 7,080 $ 9,000 $ 9,000 $ 8,587 $ 8,600 POLICE DEPT FEE $ 70,286 $ 72,800 $ 97,917 $ 118,752 $ 104,074 $ 88,000 $ 88,000 $ 106,914 $ 92,766 FIRE DEPT REC-AMBULANCE FEE $ 1,157,735 $ 1,425,457 $ 1,728,905 $ 2,050,103 $ 2,080,781 $ 1,800,000 $ 1,900,000 $ 1,953,263 $ 1,688,596 FIRE DEPT REC-FIRE ALARM FEES $ 10,095 $ 10,161 $ 13,725 $ 9,800 $ 7,678 $ 11,000 $ 8,000 $ 10,401 $ 10,292 AVALON BAY MONITORING SERVICES $ 5,850 $ 19,300 $ 17,620 $ 9,650 $ — $ 9,650 $ 9,650 $ 9,090 $ 10,484 FIRE DEPARTMENT FEE $ 37,300 $ 28,900 $ 24,500 $ 21,900 $ 22,000 $ 25,000 $ 25,000 $ 22,800 $ 26,920 B & Z MICROFILM FEES $ 9,470 $ 4,990 $ 1,555 $ — $ — $ 3,000 $ 1,000 $ 518 $ 3,203 B.O.A. HEARING FEES $ 12,752 $ 10,000 $ 10,210 $ 6,550 $ 5,500 $ 8,000 $ 8,000 $ 7,420 $ 9,002 TRENCH PERMIT FEES $ 6,700 $ 7,500 $ 5,700 $ 5,650 $ 5,100 $ 6,000 $ 5,000 $ 5,483 $ 6,130 PROTECTED TREE FEES $ 690 $ 8,890 $ 50,735 $ 54,480 $ 22,320 $ 38,000 $ 40,000 $ 42,512 $ 27,423 MISC MUNICIPAL DEPT REVENUE $ 310 $ 395 $ 769 $ 322 $ 302 $ 300 $ 300 $ 464 $ 420 LEXPRESS FARES $ 9,506 $ 16,010 $ 12,417 $ 23,777 $ 20,721 $ 22,000 $ 20,000 $ 18,972 $ 16,486 CEMETERY INTEREST ALLOCATION $ 72,925 $ 95,969 $ 101,500 $ 130,898 $ 170,662 $ 100,000 $ 100,000 $ 134,353 $ 114,391 CEMETERY PREPARATION $ 164,198 $ 212,334 $ 207,326 $ 193,850 $ 184,062 $ 198,000 $ 180,000 $ 195,079 $ 192,354 Note: FY2027 projections are based on 3- and 5-year historical averages, with adjustments applied for economic conditions and local trends. Net Metering Credit is revenue from Eversource for power generated by the Hartwell Avenue solar arrays. Ambulance fee projections for FY2027 were adjusted upward to reflect a recent increase in fees and service levels that are at all-time highs. Town of Lexington - FY2027 Revenue Projections Table 3: Local Receipts 17 November 20, 2025 Table 3-I: Local Receipt Detail - Licenses & Permits Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Licenses & Permits $ 3,542,913 $ 3,171,809 $ 5,840,007 $ 3,226,257 $ 4,616,401 $ 3,016,300 $ 2,958,300 $ 4,560,887 $ 4,079,477 SELECT BOARD'S LIC. & PERMITS $ 3,560 $ 4,290 $ 3,640 $ 5,035 $ 2,830 $ 4,000 $ 3,000 $ 3,835 $ 3,871 CABLE FRANCHISE LICENSE $ 3,715 $ 1,239 $ — $ — $ — $ — $ — $ — $ 991 ALCOHOL & BEVERAGE LIC $ 67,250 $ 76,800 $ 75,050 $ 73,350 $ 76,700 $ 73,000 $ 74,000 $ 75,033 $ 73,830 TOWN CLERK'S LIC & PERMITS $ 46,366 $ 51,460 $ 51,110 $ 51,110 $ 52,495 $ 49,000 $ 51,000 $ 51,572 $ 50,508 MISC. LICENSE & PERMITS $ 4,943 $ 4,450 $ 4,853 $ 4,375 $ 4,597 $ 4,000 $ 4,000 $ 4,608 $ 4,644 FIREARMS LICENSE $ 5,100 $ 3,900 $ 3,313 $ 4,863 $ 4,725 $ 4,000 $ 4,000 $ 4,300 $ 4,380 FIRE DEPT LIC. & PERMITS $ 55,120 $ 55,450 $ 55,605 $ 50,725 $ 45,055 $ 54,000 $ 51,000 $ 50,462 $ 52,391 BUILDING PERMITS $ 2,564,055 $ 2,098,377 $ 4,130,720 $ 2,159,554 $ 3,557,641 $ 2,100,000 $ 2,000,000 $ 3,282,638 $ 2,902,069 GAS PERMITS $ 24,795 $ 23,196 $ 38,722 $ 35,549 $ 32,595 $ 26,000 $ 26,000 $ 35,622 $ 30,971 WIRING PERMITS $ 371,267 $ 384,996 $ 538,228 $ 406,167 $ 426,060 $ 320,000 $ 400,000 $ 456,818 $ 425,344 PLUMBING PERMITS $ 77,554 $ 66,169 $ 118,006 $ 101,389 $ 122,925 $ 70,000 $ 70,000 $ 114,107 $ 97,209 SHEET METAL PERMITS $ 34,968 $ 95,016 $ 99,037 $ 54,939 $ 61,517 $ 50,000 $ 50,000 $ 71,831 $ 69,095 MECHANICAL PERMITS $ 83,668 $ 108,895 $ 559,089 $ 107,584 $ 50,889 $ 125,000 $ 70,000 $ 239,187 $ 182,025 B & Z MISC PERMITS $ 5,465 $ 4,390 $ 1,315 $ 940 $ 1,545 $ 2,000 $ 1,000 $ 1,267 $ 2,731 SHORT TERM RENTAL LIC & PERMIT $ — $ — $ 250 $ 1,150 $ 1,150 $ 200 $ 200 $ 850 $ 510 DPW STREET OPENING PERMITS $ 141,375 $ 119,610 $ 49,096 $ 58,031 $ 50,332 $ 50,000 $ 50,000 $ 52,486 $ 83,689 RIGHT OF WAY OBSTRUCTION $ 150 $ 100 $ 100 $ — $ 50 $ 100 $ 100 $ 50 $ 80 STORM WATER/DRAIN PERMIT $ 660 $ 431 $ 4,843 $ 981 $ 200 $ 1,000 $ 1,000 $ 2,008 $ 1,423 DRAIN LAYERS LICENSE $ 990 $ 1,050 $ 1,200 $ 780 $ 1,260 $ 1,000 $ 1,000 $ 1,080 $ 1,056 BOARD OF HEALTH LIC. & PERMITS $ 51,912 $ 71,990 $ 105,830 $ 109,735 $ 123,835 $ 83,000 $ 102,000 $ 113,133 $ 92,660 Note: FY2027 projections are based on 3- and 5-year historical averages, with adjustments applied for economic conditions and local trends. Town of Lexington - FY2027 Revenue Projections Table 3: Local Receipts 18 November 20, 2025 Table 3-J: Local Receipt Detail - Special Assessments Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Special Assessments $ 25,644 $ 18,165 $ 13,531 $ 10,370 $ 13,550 $ — $ — $ 12,484 $ 16,252 STREET BTMT PD IN ADVANCE $ 11,882 $ 6,666 $ — $ — $ 13,550 $ — $ — STREET BTMT PRINCIPAL $ — $ — $ — $ 7,900 $ — $ — $ — STREET BTMT INTEREST $ 13,762 $ 11,499 $ 13,531 $ 2,470 $ — $ — $ — Note: FY2027 projections are based on actual principal and interest payments scheduled for billing in future years, with no assumptions for advance payments. The Municipal Modernization Act requires that betterment payments for debt issued after November 2016 be segregated into a separate fund to pay debt service. Table 3-K: Local Receipt Detail - Fines & Forfeitures Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Fines & Forfeitures $ 59,821 $ 79,398 $ 111,594 $ 172,123 $ 111,884 $ 116,000 $ 117,000 $ 131,867 $ 106,964 PARKING FINES $ 11,640 $ 12,840 $ 22,795 $ 37,188 $ 29,987 $ 25,000 $ 26,000 $ 29,990 $ 22,890 NON CRIMINAL FINES $ 940 $ 320 $ 4,130 $ 7,980 $ 2,235 $ 3,000 $ 3,000 $ 4,782 $ 3,121 REGISTRY CMVI $ 46,598 $ 65,638 $ 83,299 $ 125,180 $ 79,377 $ 87,000 $ 87,000 $ 95,952 $ 80,018 COURT FINES $ 643 $ 600 $ 1,370 $ 1,775 $ 285 $ 1,000 $ 1,000 $ 1,143 $ 935 Notes: FY2027 projections are based on 3- and 5-year historical averages, with adjustments applied for economic conditions and local trends. The Town paused during enforcement during the pandemic and Center Streetscape construction, but resumed this operation during FY2023. Table 3-L: Local Receipt Detail - Investment Income Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Investment Income $ 277,170 $ 281,726 $ 4,401,414 $ 7,825,208 $ 6,279,974 $ 1,000,000 $ 1,500,000 $ 6,168,865 $ 3,813,098 Note: FY2027 projections are conservative estimates, but are set a level that reflects current interest rates and fund balances. As of November 2025, the Town’s main savings account interest rate was 4.2% compared to 4.8% in November 2024, 5.6% in November 2023, 4.0% in November 2022 and 0.1% in November 2021. Town of Lexington - FY2027 Revenue Projections Table 3: Local Receipts 19 November 20, 2025 Table 3-M: Local Receipt Detail - Miscellaneous Non-Recurring Local Receipt Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected 3-Year Average 5-Year Average Miscellaneous Non-Recurring $ 987,817 $ 903,031 $ 631,745 $ 459,968 $ 535,336 $ — $ — $ 542,350 $ 703,579 MISC. NON-RECURRING REVENUE $ 733,154 $ 702,873 $ 402,541 $ 374,640 $ 412,909 $ — $ — MISC. STATE REVENUE $ 31,722 $ 1,324 $ 48,305 $ 17,294 $ — $ — $ — MISC. FEDERAL REVENUE $ 9,617 $ 6,713 $ 8,030 $ 13,450 $ 13,873 $ — $ — SUPPLEMENTAL BILLING $ 213,324 $ 192,121 $ 172,869 $ 54,584 $ 108,554 $ — $ — Note: No estimate is made for this category of revenue as it is unpredictable and ‘non-recurring’ by nature. This category includes rebates for installation of green energy equipment in Municipal and School buildings, rebates from recycling school technology, rebates from procurement card (Pcard) expenses, and revenue from sales of surplus property. Supplemental Property Tax revenue is included as Misc. Non-Recurring Revenue per State statute. Town of Lexington - FY2027 Revenue Projections Table 3: Local Receipts 20 November 20, 2025 Table 4-A: Available Funds Available Fund Category Appropriated FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 Projected Parking Fund $ 562,000 $ 828,237 $ — $ 100,000 $ 250,000 $ 425,500 $ 425,500 Cemetery Sale of Lots Fund $ 40,480 $ 51,933 $ 16,125 $ 50,408 $ 123,000 $ 151,875 $ 147,000 Free Cash*$ 9,468,456 $ 14,638,059 $ 15,519,832 $ 15,919,159 $ 15,838,627 $ 24,096,825 $ 20,500,000 Health Claims Trust Fund $ 750,000 $ 750,000 $ 750,000 $ 240,000 $ 32,270 $ — $ — Capital Stabilization Fund $ — $ — $ — $ — $ — $ — $ — Transportation Demand Management Stab. Fund $ 141,000 $ 141,000 $ 141,000 $ 171,000 $ 171,000 $ 171,000 $ 171,000 Traffic Mitigation Stabilization Fund $ — $ — $ 240,000 $ 80,000 $ — $ — $ — Transportation Management Overlay District (TMOD) Stabilization Fund $ — $ — $ 65,000 $ 42,000 $ — $ — Special Education Stabilization Fund $ — $ 500,000 $ — $ — $ — $ — $ — PEG Access Special Revenue Fund $ 620,711 $ 629,287 $ 637,576 $ 586,833 $ 646,214 $ 596,441 $ 694,392 Transportation Network Company (TNC) Special Revenue Fund $ 16,504 $ 20,889 $ 6,824 $ 7,684 $ 13,234 $ 18,043 $ 22,950 Balances from Prior Year Capital Articles $ — $ 155,974 $ 266,923 $ — $ — $ — $ — BAN Premium Proceeds $ — $ 110,000 $ — $ 70,000 $ — $ — $ — Betterments Special Revenue Fund $ 6,200 $ — $ — $ 11,500 $ 1,000 $ 2,000 $ 2,000 Visitors Center Stabilization Fund $ 200,000 $ — $ — $ 50,000 $ 50,000 $ 50,000 $ 50,000 Total Available Funds $ 11,805,351 $ 17,825,379 $ 17,643,280 $ 17,328,584 $ 17,125,345 $ 25,611,684 $ 22,112,842 *FY2025 Free Cash (for use in FY2027 Projected) is a preliminary estimate, subject to certification by the Department of Revenue. Use of Capital Stabilization Fund to Mitigate Exempt Debt**$ 4,600,000 $ 2,800,000 $ 800,000 $ 500,000 $ — $ — $ — Total Use of Capital Stabilization Fund $ 4,600,000 $ 2,800,000 $ 800,000 $ 500,000 $ — $ — $ — **Shown for informational purposes only, as Exempt Debt is not part of general operating revenues. Town of Lexington - FY2027 Revenue Projections Table 4-A: Available Funds 21 November 20, 2025 Table 4-B: Parking Fund FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected Beginning Balance $ 1,176,808 $ 753,112 $ 111,921 $ 407,240 $ 737,689 $ 955,542 $ 955,542 Budgeted Expenses - Total $ (562,000) $ (828,237) $ — $ (100,000) $ (250,000) $ (425,500) $ (425,500) DPW Administration (3110)$ (1,700) $ (1,700) $ — $ — $ — $ — $ — Highway Maintenance (3210)$ (71,200) $ (71,200) $ — $ — $ — $ (39,000) $ (39,000) Police Administration (4110)$ — $ — $ — $ — $ — $ — $ — Patrol & Enforcement (4120)$ (18,200) $ (18,200) $ — $ — $ — $ — $ — Traffic Bureau (4130)$ (293,900) $ (293,900) $ — $ (100,000) $ (250,000) $ (386,500) $ (386,500) Capital/Debt Service $ (177,000) $ (443,237) $ — $ — $ — $ — $ — Total Collected $ 138,305 $ 187,046 $ 295,319 $ 430,449 $ 467,852 $ 425,500 $ 425,500 Parking Meter Revenue $ 137,328 $ 148,834 $ 160,144 $ 168,090 $ 144,637 $ 175,000 $ 150,000 Parking Permit Revenue $ (399) $ — $ 57,215 $ 60,552 $ 52,395 $ 60,500 $ 55,000 Parking Lot Revenue $ — $ — $ — $ — $ — $ — $ — Electric Vehicle Charges $ 1,376 $ 7,738 $ 12,961 $ 20,182 $ 31,162 $ 15,000 $ 25,000 Pay-by-Phone Charges $ — $ 30,474 $ 64,999 $ 181,624 $ 239,659 $ 175,000 $ 195,500 Returned Capital Funds $ — $ — $ — $ — $ — $ — $ — Ending Balance $ 753,112 $ 111,921 $ 407,240 $ 737,689 $ 955,542 $ 955,542 $ 955,542 Note: Appropriations in all years include funds for the costs incurred in the Police and Public Works departments in support of the Town's parking programs. FY2020 reflects the cost of electric vehicle charging stations, offset by returned funds from an earlier capital project. FY2021 reflects the cost of acquiring the lot at Edison Way from the Historical Society. FY2022 reflects the cost of updates to the parking system. In FY2023, operating budget offsets were temporarily suspended due to insufficient fund balance. In FY2024 and FY2025, moderate offsets supported operations as the fund balance began to rebuild. In FY2026, the fund will offset the cost for Traffic Bureau staff and the Pay-By-Phone app contract, as well as the partial cost for parking lot plowing during snow events. Town of Lexington - FY2027 Revenue Projections Table 4-B: Parking Meter Fund 22 Updated as of November 20, 2025 Table 4-C: Free Cash History Beginning Free Cash Receipts in Excess of Estimates Expenditures less than Appropriated Misc. Factors Appropriations from F.C. and other adjustments Certified Free Cash FY2001 $ 1,836,400 $ 3,086,536 $ 1,208,713 $ — $ (692,645) $ 5,439,004 FY2002 $ 2,250,004 $ (603,164) $ 487,229 $ — $ — $ 2,135,507 FY2003 $ 1,495,174 $ (372,684) $ 232,472 $ — $ (39,959) $ 1,315,003 FY2004 $ 1,315,003 $ (301,684) $ 588,899 $ — $ — $ 2,323,303 FY2005 $ 2,123,303 $ 1,732,103 $ 333,862 $ 1,852,214 $ (715,232) $ 5,409,985 FY2006 $ 5,409,985 $ 3,385,764 $ 429,318 $ — $ (5,422,720) $ 3,802,347 FY2007 $ 3,802,347 $ 2,462,181 $ 1,966,642 $ 432,693 $ (3,802,347) $ 4,861,516 FY2008 $ 4,861,516 $ 2,084,646 $ 2,967,150 $ 429,921 $ (4,861,516) $ 5,481,717 FY2009 $ 5,481,717 $ 1,669,160 $ 3,113,850 $ 1,376,499 $ (5,481,717) $ 6,159,509 FY2010 $ 6,159,509 $ 2,476,716 $ 3,772,879 $ 875,405 $ (6,159,509) $ 7,125,000 FY2011 $ 7,125,000 $ 2,392,461 $ 4,797,523 $ 953,116 $ (7,125,000) $ 8,143,100 FY2012 $ 8,143,100 $ 3,800,023 $ 5,889,241 $ 2,911,667 $ (8,143,100) $ 12,600,931 FY2013 $ 12,600,931 $ 3,751,452 $ 4,417,500 $ 1,260,573 $ (11,727,331) $ 10,303,125 FY2014 $ 10,303,125 $ 4,677,709 $ 7,407,913 $ 422,581 $ (9,703,125) $ 13,108,202 FY2015 $ 13,108,202 $ 4,858,093 $ 4,432,010 $ 1,841,084 $ (12,764,202) $ 11,475,187 FY2016 $ 11,475,187 $ 3,825,713 $ 7,168,120 $ 2,002,674 $ (10,383,826) $ 14,087,868 FY2017 $ 14,087,868 $ 3,855,319 $ 8,231,557 $ 157,028 $ (13,269,721) $ 13,062,051 FY2018 $ 13,062,051 $ 5,276,255 $ 8,026,582 $ (499,215) $ (12,464,579) $ 13,401,094 FY2019 $ 13,401,094 $ 2,227,122 $ 8,016,944 $ 1,272,711 $ (12,201,094) $ 12,716,777 FY2020 $ 12,716,777 $ 1,494,398 $ 11,086,531 $ 1,544,334 $ (9,503,981) $ 17,338,059 FY2021 $ 17,338,059 $ 3,053,162 $ 10,158,418 $ 472,749 $ (14,638,059) $ 16,384,329 FY2022 $ 16,384,329 $ 4,128,361 $ 8,719,918 $ 3,325,121 $ (15,438,570) $ 17,119,159 FY2023 $ 17,119,159 $ 8,987,103 $ 7,729,545 $ (884,517) $ (15,919,159) $ 17,032,132 FY2024 $ 17,032,132 $ 10,371,207 $ 11,959,658 $ 610,794 $ (15,876,966) $ 24,096,825 FY2025 $ 24,096,825 $ 9,200,000 $ 7,800,000 $ (1,396,825) $ (19,200,000) $ 20,500,000 Notes: The table above shows the factors that drive the annual certification of free cash. The FY2025 value is an estimate and has not been certified by the Department of Revenue. Town of Lexington - FY2027 Revenue Projections Table 4-C: Free Cash History 23 November 20, 2025 Table 5-A: Revenue Offsets Revenue Offset Category FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected Cherry Sheet Assessments $ (990,747) $ (1,048,843) $ (1,003,631) $ (981,462) $ (1,112,390) $ (1,264,133) $ (1,116,126) Cherry Sheet Offset - Public Libraries $ (63,823) $ (53,560) $ (77,628) $ (82,531) $ (91,318) $ (89,563) $ (94,514) Overlay (abatements)$ (750,000) $ (900,000) $ (750,000) $ (750,000) $ (750,000) $ (750,000) $ (750,000) Snow Deficit $ — $ — $ — $ — $ — $ — $ (400,000) Total Revenue Offsets $ (1,804,570) $ (2,002,403) $ (1,831,259) $ (1,813,993) $ (1,953,708) $ (2,103,696) $ (2,360,640) Notes: FY2027 Cherry Sheet Assessments reflect level funding from FY2026 assessments. $400,000 was set-aside for a snow deficit in FY2025, but was ultimately not needed and therefore re-allocated at the recent Fall Special Town meeting. Table 6-A: Enterprise Receipts Enterprise Fund FY2021 Actual FY2022 Actual FY2023 Actual FY2024 Actual FY2025 Actual 2026 Estimated 2027 Projected Water $ 930,001 $ 918,245 $ 977,093 $ 1,011,340 $ 968,301 $ 1,002,244 $ 1,091,745 Wastewater (Sewer)$ 541,663 $ 514,111 $ 542,416 $ 588,040 $ 596,525 $ 614,684 $ 627,572 Recreation & Community Programs $ 277,771 $ — $ 286,104 $ 294,687 $ 308,991 $ 318,261 $ 327,808 Total Enterprise Receipts $ 1,749,435 $ 1,432,356 $ 1,805,613 $ 1,894,067 $ 1,873,817 $ 1,935,189 $ 2,047,125 Notes: FY2027 amount for initial projections for Enterprise Indirect charges (General Fund revenue) are current estimates. Final figures may vary slightly compared to this placeholder amount as Finance Dept. staff complete a detailed analysis. Town of Lexington - FY2027 Revenue Projections Tables 5 and 6: Revenue Offsets and Enterprise Receipts 24 November 20, 2025 Table 7-A: Revenues Set-Aside for Designated Purposes Revenue Set-Asides FY2021 FY2022 FY2023 FY2024 FY2025 FY2026 FY2027 Projected Set-Aside for as yet to be identified needs $ — $ — $ — $ — $ 2,700,158 $ 1,000,000 Set-Aside for Unanticipated Current Fiscal Year Needs $ — $ — $ — $ — $ 200,000 $ 250,000 Appropriate from Capital Stabilization Fund $ — $ — $ — $ — $ — Support of Community Center Program (Transfer to Article 12)$ 618,916 $ 509,215 $ 242,790 $ 256,675 $ 272,708 $ 254,213 $ 268,334 Appropriate into Capital Stabilization Fund $ — $ 3,787,974 $ 4,394,724 $ 4,432,518 $ 8,399,172 $ 7,497,832 $ 6,580,908 Appropriate into Transportation Demand Management Stabilization Fund $ — $ 200,000 $ — $ — $ — $ — $ — Cash Capital $ 4,775,531 $ 6,806,505 $ 11,049,906 $ 13,299,438 $ 13,769,698 $ 16,542,946 $ 16,720,279 Cash Capital - Non-General Fund $ 193,504 $ 464,126 $ 311,824 $ 129,685 $ 168,234 $ 18,043 $ 22,950 Other Post-Employment Benefit Liability (OPEB)$ 750,000 $ 1,879,721 $ 1,929,721 $ 1,979,721 $ 2,029,721 $ 2,079,721 $ 2,129,721 Special Education Stabilization Fund $ — $ — $ — $ 500,000 $ — $ — $ — Special Education Reserve $ — $ — $ — $ 750,000 $ — $ 700,000 $ — Street Improvement Program $ 2,634,022 $ 2,651,674 $ 2,669,767 $ 2,688,312 $ 2,707,321 $ 2,726,806 $ 2,746,777 Building Envelope Program $ 208,962 $ 214,186 $ 219,540 $ 225,029 $ 230,655 $ 236,421 $ 242,332 Senior Tax Work-Off Program $ — $ 15,000 $ 15,000 $ — $ 15,000 $ — $ — Opioid Settlement Programs $ — $ — $ — $ 225,108 $ 187,927 $ — $ — Other $ — $ 150,000 $ 125,570 $ — $ 500,000 $ 24,000 $ — Total Set Asides for Designated Uses $ 9,180,935 $ 16,678,401 $ 20,958,842 $ 24,486,486 $ 28,280,436 $ 35,180,140 $ 29,961,301 *In FY2020, FY2021 and FY2023 $700K was set aside to eliminate Free Cash from the Operating Budget- those funds were used for Cash Capital, and is captured in that total amount. Beginning in FY2023 the Town received funds associated with national opioid settlement agreements. These funds were originally appropriated in the General Fund, but beginning in FY2025 these funds may be set-aside for their designated purpose and spent without further appropriation. Town of Lexington - FY2027 Revenue Projections Table 7-A: Revenue Set-Asides 25 November 20, 2025 Town of Lexington Financial Summit I Indicator Analysis: Fiscal Years 2016 –2025 November 20, 2025 Town of Lexington Financial Summit I –November 20, 2025 Introduction 1 Indicator Analysis Indicator Summary 2 Consumer Price Index 3 I.1 Revenues 4 I.2 State Aid 5 I.3 Revenues Related to Economic Growth 6 I.4 Property Tax Revenues 7 I.5 Uncollected Property Taxes 8 I.6 Expenditures per Department 9 I.7 Personnel Costs 10 I.8 Employee Benefits 11 I.9 Retirement 12 I.10a Pension Liability 13 I.10b OPEB Liability 14 I.11 Debt Service 15 I.12 Long-Term Debt 16 I.13 Reserves and Fund Balance 17 I.14 School Enrollment 18 This packet of information includes an evaluation of the fiscal health of the Town of Lexington presented through a series of indicators. Town staff have compiled 16 indicators, and where appropriate, comparative benchmarks to assist policy makers in evaluating the Town’s financial condition and prepare for the FY2027 Budget development process. The indicators were developed using recognized metrics from professional organizations including the International City/County Management Association (ICMA), the Government Finance Officers Association (GFOA), Moody’s Investor’s Service; and data from the Town of Lexington, the Massachusetts Department of Revenue, the Massachusetts Department of Elementary and Secondary Education, and the U.S. Census Bureau. Lexington’s overall financial condition remains sound, and current fiscal years are experiencing new trends. •Inflationary pressures had a pronounced impact on revenues and expenses in recent years but have eased in the last two years as indicated in constant dollar trends. Future increases in inflation will result in pressure on compensation and operating expenses. •Revenues related to economic growth such as motor vehicle excise, hotel/motel and meals taxes have been stable since dipping during pandemic years. Interest income has been strong due to elevated interest rates coupled with a robust fund balance. Permit revenue is beginning to benefit from residential growth driven by MBTA zoning. This trend follows several years of significant commercial growth in industrial life science developments. •State Aid as a percent of operating revenues was on a slight, but steady decline since 2018 when the Town reached foundation budget, then benefited from a significant increase in FY2024 due to the Chapter 70 (education) funding formula. School aid is expected to experience minimum per student increases for future years. •Trends in school enrollment were volatile during the pandemic. Overall enrollment has dropped significantly since peak levels. •Increases in staffing and labor costs have driven the increase in operating expenses in recent years. These pressures coupled with conservative trends in actuarial assumptions are driving up the Town’s unfunded pension and OPEB liabilities. Future increases in staffing levels and cost of living increases will further impact the pension funding schedule. •Lexington’s Health Insurance spending as a percentage of employee wages is beginning to increase after a mostly stable decade. Market indicators point to insurance costs continuing to increase faster than revenues and wages in the coming years. •Debt service has leveled or is beginning to decline, and overall ratios of debt as a percentage of valuation continues to improve. This trend is the result of long-term planning and is expected to reverse if the project to replace Lexington High School moves forward. •The Town has continued to grow reserves both in Stabilization Fund set-asides and free cash. These reserves will begin to draw-down if the project to replace Lexington High School moves forward. The financial metrics in this report highlight the Town’s strong financial position and prudent fiscal management. Though management foresee multiple pressures on the horizon, Lexington is expected to maintain its Aaa credit rating. Town of Lexington Financial Summit I – November 20, 2025 Town of Lexington Financial Summit I – November 20, 2025 Indicator Summary 2021 2022 2023 2024 2025 I.1 Revenues F F/M M F F I.2 State Aid M M M F F I.3 Revenues Related to Economic Growth F/M F/M F F F I.4 Property Tax Revenues F F F/M F F I.5 Uncollected Property Taxes F F F F F I.6 Expenditures per Department M M M F F I.7 Personnel Costs F/M F F M M I.8 Employee Benefits M F M F M/U I.9 Retirement Participants M M F M M I.10a Pension Liability U U M M F I.10b OPEB Liability F U M M M I.11 Debt Service M F F F F I.11a Projected Exempt Debt Service F/M F/M F F F I.12 Long-Term Debt F F F F F I.13 Reserves and Fund Balance F F/M F F F I.14a School Enrollment F/M F/M F F F Chart Key U – Unfavorable M – Marginal F/M – Favorable/Marginal F – Favorable Town of Lexington Financial Summit I – November 20, 2025 Consumer Price Index for All Urban Consumers (CPI-U) Boston-Cambridge-Newton, MA-NH All Items, Not seasonally adjusted * Complete data for 2025 has not yet been reported. Numbers reflect BLS CPI-U data for January – July 2025. While inflation appears to be easing based on this data, staff feel the current economy is volatile and future conditions may change rapidly. Year (1982-64 = 100)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025* Average Consumer Price Index 260.496 267.033 275.815 281.082 284.266 293.521 314.356 326.016 336.376 346.856 Average 12-Month % Change 1.5%2.5%3.3%1.9%1.1%3.3%7.1%3.7%3.2%3.2% 260.496 267.033 275.815 281.082 284.266 293.521 314.356 326.016 336.376 346.856 200 220 240 260 280 300 320 340 360 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025* Average Consumer Price Index 1.5% 2.5% 3.3% 1.9% 1.1% 3.3% 7.1% 3.7%3.2%3.2% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025* Average 12-Month % Change Town of Lexington Financial Summit I – November 20, 2025 Revenue growth is one measure of the Town's ability to maintain existing service levels. For the past decade revenue growth across all categories has been positive and relatively steady. However, higher inflation from 2021-2024 had a negative impact on revenue growth in constant dollars which puts pressure on the operating budget. Fiscal years 2024-2025 indicate inflation is slowing. Revenue is trending back up, though the FY2024 increase was largely driven by a substantial increase in Chapter 70 State Aid, and 2023-2025 benefited from significant amounts of interest income. Indicator 1: Revenues A decrease in net operating revenues (constant dollars) is considered a warning indicator. Lexington Trend Favorable Marginal Unfavorable Uncertain 2.24%2.65%2.44%1.91%2.23% 0.06% -1.61% 3.27%3.45% 4.71% -3.00% -2.00% -1.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Percent Change - Net Operating Revenues (constant dollars) Fiscal Year (Dollars in ,000s)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10-year Change Gross Operating Revenue/Transfers 193,583$ 203,261$ 214,544$ 223,563$ 232,588$ 241,503$ 255,071$ 273,437$ 287,575$ 303,502$ 56.8% Less: Exempt Debt Service 8,325$ 8,330$ 8,293$ 9,360$ 11,128$ 12,685$ 13,948$ 15,208$ 16,312$ 16,592$ 99.3% Net Operating Revenues 185,258$ 194,931$ 206,251$ 214,203$ 221,460$ 228,818$ 241,123$ 258,229$ 271,264$ 286,910$ 54.9% Percent Change from prior year (net)4.37%5.22%5.81%3.86%3.39%3.32%5.38%7.09%5.05%5.77%32.1% 10-Year Average Change CPI-U, prior calendar year 260.5 267.0 275.8 281.1 284.3 293.5 314.4 326.0 336.4 346.9 CPI-U, adjustment to constant dollars 96.41%94.05%91.05%89.35%88.35%85.56%79.89%77.04%75.86%75.10% Net Operating Revenues (constant dollars)$178,603 $183,328 $187,799 $191,385 $195,652 $195,779 $192,633 $198,930 $205,788 $215,475 20.6% Percent Change from prior year (net)2.24%2.65%2.44%1.91%2.23%0.06%-1.61%3.27%3.45%4.71% 10-Year Average Change Town of Lexington Financial Summit I – November 20, 2025 On a constant dollar basis, State Aid increased steadily from FY2016-18, largely due to increased Education Aid. This time period reflects the state’s efforts to meet its minimum financing requirements (Foundation Budget) under the Chapter 70 formula. The state funding requirement was met in FY2018, and the Town subsequently received the annual minimum aid per student each year until FY2024. In 2024 changes in enrollment and inflation in per student costs caused the Town to fall below the target Foundation Budget which resulted in a large increase in our Chapter 70 Aid. Staff expect that going forward we will continue to receive the minimum aid per student as was seen from FY2018-2023. While the Town does not rely heavily on increasing State Aid, reductions in State funding may still be difficult to manage. In order to protect itself, the Town has a contingency plan for reductions in State Aid. Since 2006, the Town has been funding reserves capable of offsetting cyclical downturns in State Aid and Local Receipts. Indicator 2: State Aid Reduced State Aid as a percentage of operating revenues is considered a warning indicator, particularly if the Town does not have adequate reserves to offset reductions. Lexington Trend Favorable Marginal Unfavorable Uncertain 6.22% 6.80% 7.61%7.45%7.32%7.06%6.81%6.58% 7.20%7.10% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 8.50% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 State Aid as % of Operating Revenue Fiscal Year (Dollars in ,000s)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10-year Change Cherry Sheet Revenues $11,527 $13,262 $15,689 $15,963 $16,204 $16,158 $16,432 $16,991 $19,535 $20,361 76.63% Less: School Building Reimbursements $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 0.00% Net State Aid Revenues $11,527 $13,262 $15,689 $15,963 $16,204 $16,158 $16,432 $16,991 $19,535 $20,361 76.63% Net Operating Revenues $185,258 $194,931 $206,251 $214,203 $221,460 $228,818 $241,123 $258,229 $271,264 $286,910 54.87% State Aid as % of Operating Revenues 6.22%6.80%7.61%7.45%7.32%7.06%6.81%6.58%7.20%7.10% CPI-U, prior calendar year 260.5 267.0 275.8 281.1 284.3 293.5 314.4 326.0 336.4 346.9 CPI-U, adjustment for constant dollars 96.41%94.05%91.05%89.35%88.35%85.56%79.89%77.04%75.86%75.10% State Aid Revenues (constant dollars)$11,113 $12,473 $14,285 $14,263 $14,316 $13,825 $13,128 $13,089 $14,820 $15,291 37.60% % change from prior year (constant dollars)1.90%12.24%14.53%-0.16%0.37%-3.43%-5.04%-0.29%13.22%3.18% Town of Lexington Financial Summit I – November 20, 2025 Economic growth revenues are responsive to changes in the economy. A balance between growth and other (non-economic growth) revenues mitigates the effects of economic growth or decline. During a recession, a high percentage of non-economic growth revenue is an advantage. During a slowing economy, the Town should maintain sufficient reserves to protect against slowing revenue growth. An increase in building permit fees may also be a leading indicator of future increases in the tax levy. The Town’s economic revenues have largely recovered from declines experienced during the pandemic. Building permit revenue has been exceptionally strong the last several years driven by commercial development, particularly life science buildings. This trend is expected to slow going forward as the life science real estate market has become saturated and is experiencing low occupancy rates. Indicator 3: Revenues Related to Economic Growth Decreasing economic growth revenues, as a percentage of net operating revenues, is considered a warning indicator. Lexington Trend Favorable Marginal Unfavorable Uncertain 6.14% 6.54% 6.21% 5.94%5.83% 6.12% 5.88% 7.64% 5.93% 6.58% 5.50% 6.00% 6.50% 7.00% 7.50% 8.00% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Economic Growth Revenues as % of Operating Revenues Fiscal Year (Dollars in ,000s)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10-year Change Net Operating Revenues (constant dollars)$178,603 $183,328 $187,799 $191,385 $195,652 $195,779 $192,633 $198,930 $205,788 $215,475 20.64% Building-Related Fees & Permits 2,298$ 2,547$ 2,689$ 2,392$ 2,690$ 3,156$ 2,777$ 5,840$ 2,865$ 4,252$ 85.04% Motor Vehicle Excise (MVE)4,953$ 5,350$ 5,396$ 5,649$ 5,383$ 5,335$ 5,330$ 5,846$ 6,142$ 6,606$ 33.38% Hotel/Motel Local Excise 952$ 1,056$ 903$ 948$ 802$ 357$ 614$ 719$ 842$ 698$ -26.64% Meals Local Excise 497$ 482$ 457$ 472$ 438$ 305$ 472$ 469$ 510$ 553$ 11.19% Levy Growth from New Residential Construction 1,713$ 1,858$ 1,909$ 2,023$ 1,699$ 1,973$ 1,877$ 2,340$ 1,971$ 2,254$ 31.57% Levy Growth from New Industrial/Commercial Growth 215$ 508$ 744$ 481$ 794$ 1,639$ 1,767$ 2,657$ 2,143$ 3,061$ 1320.64% Levy Growth from Personal Property 744$ 943$ 705$ 767$ 1,116$ 1,241$ 1,337$ 1,860$ 1,610$ 1,460$ 96.32% Total: Ecomomic Growth Revenues 11,372$ 12,745$ 12,801$ 12,731$ 12,922$ 14,006$ 14,174$ 19,731$ 16,082$ 18,884$ 66.05% CPI-U, prior calendar year 260.5 267.0 275.8 281.1 284.3 293.5 314.4 326.0 336.4 346.9 CPI-U adjustment for constant dollars 96.41%94.05%91.05%89.35%88.35%85.56%79.89%77.04%75.86%75.10% Revenues related to Economic Growth (constant dollars)10,964$ 11,986$ 11,656$ 11,375$ 11,416$ 11,984$ 11,323$ 15,200$ 12,200$ 14,182$ 29.36% Economic Growth Revenues as % of Operating Revenues (constant dollars)6.14%6.54%6.21%5.94%5.83%6.12%5.88%7.64%5.93%6.58% Town of Lexington Financial Summit I – November 20, 2025 Property tax revenues are analyzed separately because they are the Town's primary revenue source for both operating and capital spending. Increases due to operating overrides should be noted for their impact on taxpayers' ability to pay. Lexington has seen consistent growth in property tax revenues since 2016, however the increase in inflation in FY2021-23 slowed growth in constant dollars. The final row reflects the consistently strong tax collections from Lexington residents, which indicates their ability to pay. This rate has remained strong, even during fiscal downturns. Indicator 4: Property Tax RevenueIndicator 5: Uncollected Property Taxes A decline in property tax revenues (constant dollars) is considered a warning indicator. Lexington Trend Favorable Marginal Unfavorable Uncertain $149,191 $152,222 $154,183 $158,003 $163,284 $166,270 $163,158 $166,543 $172,462 $180,030 $120,000 $140,000 $160,000 $180,000 $200,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Net Property Tax Revenues (constant dollars) Fiscal Year (Dollars in ,000s)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10-year Change Property Tax Levy and CPA Surcharge 167,241$ 174,655$ 182,287$ 191,006$ 201,055$ 212,415$ 223,876$ 237,346$ 249,916$ 263,256$ 57.41% Less: Exempt Debt Service, net of mitigation 8,325$ 8,330$ 8,293$ 9,360$ 11,128$ 12,685$ 13,948$ 15,208$ 16,312$ 16,592$ 99.30% Less: CPA Surcharge 4,166$ 4,469$ 4,662$ 4,805$ 5,105$ 5,400$ 5,700$ 5,950$ 6,270$ 6,950$ 66.83% Net Property Tax Revenues 154,750$ 161,856$ 169,332$ 176,841$ 184,822$ 194,330$ 204,228$ 216,187$ 227,334$ 239,714$ 54.90% CPI-U, prior calendar year 260.5 267.0 275.8 281.1 284.3 293.5 314.4 326.0 336.4 346.9 CPI-U, adjustment for constant dollars 96.41%94.05%91.05%89.35%88.35%85.56%79.89%77.04%75.86%75.10% Property Tax Revenues (constant dollars)149,191$ 152,222$ 154,183$ 158,003$ 163,284$ 166,270$ 163,158$ 166,543$ 172,462$ 180,030$ 20.67% Percent Increase over Prior Year 2.28%2.03%1.29%2.48%3.34%1.83%-1.87%2.07%3.55%4.39% Uncollected Taxes as a Percentage of Net Property Tax Levy 0.59%0.77%-0.09%0.63%0.13%0.16%-0.27%0.20%-0.03%0.28% Town of Lexington Financial Summit I – November 20, 2025 Increasing departmental operating expenditures may indicate that the cost of providing services is exceeding the Town's ability to pay, or that the demographics of the Town are changing, requiring increased spending in related services. The significant decrease in FY2022-FY2023 was driven by the change in constant dollars, which signifies an increase in inflation. This short-term trend reverses in FY2024 as inflation is easing and expenses are leveling. Indicator 6: Expenditures Per Department Increasing operating expenditures, in constant dollars, may be a warning indicator if increases are the result of fixed or unsustainable costs. Lexington Trend Favorable Marginal Unfavorable Uncertain 1.29% 2.83% 2.50% 3.71% 1.88%2.12% -2.86% 0.88% 4.13%3.86% -4.00% 1.00% 6.00% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 % Change - Total Operating Expenditures Fiscal Year (Dollars in ,000s)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Education 90,455$ 96,728$ 101,433$ 108,677$ 112,079$ 118,138$ 123,951$ 128,462$ 138,106$ 143,831$ $53,376 59.01% Shared Expenses (Benefits, Debt)36,088$ 38,146$ 41,654$ 43,082$ 45,514$ 47,784$ 48,011$ 49,509$ 51,019$ 54,644$ $18,556 51.42% Public Works 8,637$ 9,055$ 9,236$ 9,750$ 9,475$ 10,486$ 10,704$ 11,573$ 11,788$ 13,211$ $4,574 52.96% Public Facilities 9,821$ 10,092$ 10,171$ 10,666$ 11,095$ 11,050$ 12,202$ 12,836$ 13,943$ 14,528$ $4,706 47.92% Public Safety 13,290$ 12,975$ 14,948$ 14,795$ 14,905$ 15,554$ 16,053$ 17,383$ 18,078$ 18,947$ $5,657 42.57% Library 2,394$ 2,485$ 2,471$ 2,675$ 2,736$ 2,725$ 3,019$ 3,345$ 3,367$ 3,507$ $1,113 46.49% Human Services 1,125$ 1,066$ 1,115$ 1,229$ 1,243$ 1,294$ 1,216$ 1,481$ 1,539$ 1,378$ $253 22.49% Land Use/ Development (including Health)1,969$ 2,091$ 2,186$ 2,092$ 2,156$ 2,245$ 2,347$ 2,582$ 2,668$ 2,716$ $747 37.92% General Government 5,133$ 5,417$ 5,295$ 6,275$ 6,074$ 7,184$ 7,682$ 8,419$ 8,607$ 8,581$ $3,449 67.19% Total Operating Expenditure 168,911$ 178,054$ 188,509$ 199,242$ 205,278$ 216,461$ 225,185$ 235,591$ 249,115$ 261,342$ $92,431 54.72% CPI-U, 2000 base year 260.5 267.0 275.8 281.1 284.3 293.5 314.4 326.0 336.4 346.9 CPI-U, adjustment for constant dollars 96.41%94.05%91.05%89.35%88.35%85.56%79.89%77.04%75.86%75.10% Total Operating Expenditure (constant collars)162,844$ 167,456$ 171,644$ 178,018$ 181,355$ 185,206$ 179,901$ 181,491$ 188,985$ 196,273$ $33,429 20.53% Percent Change from prior years 1.29%2.83%2.50%3.71%1.88%2.12%-2.86%0.88%4.13%3.86% 10-year Average Change $3,342.94 2.05% 10-year Change ($ | %) Town of Lexington Financial Summit I – – November 20, 2025 Increasing salaries and wages as a percent of operating expenditures may be an indicator of two trends: First, it may point to future pension and health insurance costs since both of these items are related to the number and compensation level of employees. The increases from FY2023-2024 are the result in increases in headcount and salaries due to collective bargaining agreements, both of which will add to future pension and insurance costs. Second, this trend may be an indicator of deferred maintenance of the Town's infrastructure. The Town has diligently invested an increasing amount of capital funding to building and infrastructure projects over the last 10 years, a positive indication that the Town is not sacrificing capital and maintenance in order to fund personnel. Indicator 7: Personnel Costs Increasing personnel costs as a percentage of total spending is considered a warning indicator. Lexington Trend Favorable Marginal Unfavorable Uncertain Fiscal Year (Dollars in ,000s)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10-year Change Operating Expenditures 168,911$ 178,054$ 188,509$ 199,242$ 205,278$ 216,461$ 225,185$ 235,591$ 248,371$ 256,732$ 51.99% Total Municipal Wages 23,001$ 23,290$ 25,141$ 25,133$ 25,703$ 27,461$ 28,038$ 29,677$ 31,533$ 32,682$ 42.09% School Wages 76,126$ 81,058$ 85,201$ 90,272$ 94,476$ 96,807$ 101,248$ 106,157$ 114,299$ 123,343$ 62.02% Public Facilities Wages 4,768$ 5,139$ 5,200$ 5,348$ 5,673$ 5,588$ 5,967$ 5,976$ 6,451$ 6,771$ 42.02% Benefits 28,597$ 30,377$ 31,155$ 31,048$ 34,516$ 35,996$ 37,266$ 40,827$ 42,880$ 47,337$ 65.53% Total Wage & Benefit Costs 132,492$ 139,864$ 146,698$ 151,800$ 160,369$ 165,853$ 172,518$ 182,637$ 195,164$ 210,134$ 58.60% Salaries & Wages as % of Operating Expenditures 61.5%61.5%61.3%60.6%61.3%60.0%60.1%60.2%61.3%63.4% Benefits as % of Operating Expenditures 16.9%17.1%16.5%15.6%16.8%16.6%16.5%17.3%17.3%18.4% Total Wage & Benefit Costs as % of Operating Expenditures 78.4%78.6%77.8%76.2%78.1%76.6%76.6%77.5%78.6%81.8% 61.5%61.5%61.3%60.6%61.3%60.0%60.1%60.2%61.3%63.4% 16.9%17.1%16.5%15.6%16.8%16.6%16.5%17.3%17.3%18.4% 78.4%78.6%77.8%76.2%78.1%76.6%76.6%77.5%78.6%81.8% 0.0% 50.0% 100.0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total Personnel Costs as a Percentage of Operating Expenses Salaries & Wages as % of Operating Expenditures Benefits as % of Operating Expenditures Total Wage & Benefit Costs as % of Operating Expenditures Town of Lexington Financial Summit I – – November 20, 2025 Employee benefits represent a significant share of the Town's operating costs. Lexington’s Health Insurance spending as a percentage of employee wages is beginning to increase after a mostly stable decade since joining the Group Insurance Commission (GIC) in 2013. Market indicators point to insurance costs increasing faster than revenues and wages in the coming years. In FY2023 the Town made a supplemental appropriation into the Pension fund of $1,060,000 from an unanticipated personal property tax revenue from one of the Town’s top commercial taxpayers. A policy decision was made to continue to appropriate that ongoing annual revenue to the pension fund in future years. This supplemental funding has helped maintain the Town’s target funding schedule. For further explanation of the increase in the Pension Assessment, please see Indicator 10. Indicator 8: Employee Benefits Increasing employee benefit costs as a percentage of wages and salaries is considered a warning indicator. Lexington Trend Favorable Marginal Unfavorable Uncertain 21.9%22.1%21.3%21.0%21.5%21.8%21.9%21.8%21.2%22.1% 5.0%5.0%4.9%4.9%5.0%5.2%5.5%6.5%6.6%6.6% 26.9%27.1%26.3%26.0%26.6%27.0%27.4%28.3%27.8%28.7% 0% 10% 20% 30% 40% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Health Insurance and Retirement Benefits as a Percentage of Wages & Salaries Health Insurance Benefits as a % of Wages & Salaries Pension Assessment as a % of Wages & Salaries Total Benefits as % of Wages Fiscal Year (Dollars in ,000s)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10-year Change Health Insurance Benefits 22,758$ 24,223$ 24,646$ 25,404$ 27,079$ 28,362$ 29,568$ 30,864$ 32,347$ 36,048$ 58.4% Pension Assessment 5,199$ 5,457$ 5,713$ 5,955$ 6,350$ 6,695$ 7,426$ 9,219$ 9,985$ 10,743$ 106.6% Wages & Salaries - Municipal 23,001$ 23,290$ 25,141$ 25,133$ 25,703$ 27,461$ 28,038$ 29,677$ 31,533$ 32,682$ 42.1% Wages & Salaries - Schools 76,126$ 81,058$ 85,201$ 90,272$ 94,476$ 96,807$ 101,248$ 106,157$ 114,299$ 123,343$ 62.0% Wages & Salaries - Public Facilities 4,768$ 5,139$ 5,200$ 5,348$ 5,673$ 5,588$ 5,967$ 5,976$ 6,451$ 6,771$ 42.0% Total Wages & Salaries 103,895$ 109,488$ 115,542$ 120,752$ 125,852$ 129,857$ 135,253$ 141,810$ 152,284$ 162,797$ 56.7% Health Insurance Benefits as a % of Wages & Salaries 21.9%22.1%21.3%21.0%21.5%21.8%21.9%21.8%21.2%22.1% Pension Assessment as a % of Wages & Salaries 5.0%5.0%4.9%4.9%5.0%5.2%5.5%6.5%6.6%6.6% Benefits as % of Wages 26.9%27.1%26.3%26.0%26.6%27.0%27.4%28.3%27.8%28.7% Town of Lexington Financial Summit I – – November 20, 2025 Lexington has an aggressive approach to funding its pension liabilities and has implemented a plan to begin to slowly fund its post-employment health liabilities. The increasing number of active participants and retirees places pressure on the health insurance budget and retirement funds. This data set should be read together with those in Indicators 10A and 10B. Indicator 9: Retirement Participants An increase in retirement system participants, without fully funding the associated post-retirement health costs, is considered a warning indicator. Lexington Trend Favorable Marginal Unfavorable Uncertain 705 723 734 750 763 755 744 761 758 795 419 440 455 456 458 465 462 467 467 476 792 811 838 862 921 876 930 832 914 830 541 553 554 550 563 572 593 584 578 582 2457 2527 2581 2618 2705 2668 2729 2644 2717 2683 0 500 1000 1500 2000 2500 3000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Participants in Lexington & Teachers Retirement Systems Active Participants Number of Retirees Active Teachers Number of Retired Teachers Total Town of Lexington Financial Summit I – November 20, 2025 In 2021 the Lexington Retirement Board lowered the discount rate from 7.5% to 7.25%, resulting in an increase in the total actuarial liability. Further lowering the discount rate will increase the unfunded liability and have a negative impact on the Systems funded percentage. As of January 1, 2025, the actuarial valuation of assets of the Lexington Retirement System was $262.3 million and the System was 88.52% funded. At the current level of annual appropriations, Lexington is projected to fully fund its pension system in 2030. Indicator 10a: Pension Liability An unfunded pension liability or increase in the unfunded liability is considered a warning indicator. Lexington Trend Favorable Marginal Unfavorable Uncertain 88.40%90.80%88.84% 78.33%82.32%85.34%87.16% 80.45%76.61%82.27% 88.52% 50.00% 55.00% 60.00% 65.00% 70.00% 75.00% 80.00% 85.00% 90.00% 95.00% 100.00% $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 1/1/2006 7/1/2008 1/1/2010 1/1/2012 1/1/2014 1/1/2016 1/1/2018 1/1/2020 1/1/2021 1/1/2023 1/1/2025 Percent of Pension Liability Funded Pension Assets Pension Liability (unfunded)Percent Funded Actuarial Date 1/1/2006 7/1/2008 1/1/2010 1/1/2012 1/1/2014 1/1/2016 1/1/2018 1/1/2020 1/1/2021 1/1/2023 1/1/2025 Total Liability 111,724$ 125,412$ 133,456$ 154,907$ 158,135$ 169,564$ 188,161$ 222,082$ 253,300$ 269,155$ 296,288$ Pension Assets 98,759$ 113,880$ 118,559$ 121,340$ 130,169$ 144,700$ 164,000$ 178,655$ 194,047$ 221,429$ 262,274$ Pension Liability (unfunded)12,965$ 11,532$ 14,897$ 33,567$ 27,966$ 24,865$ 24,162$ 43,427$ 59,253$ 47,726$ 34,014$ Percent Funded 88.40%90.80%88.84%78.33%82.32%85.34%87.16%80.45%76.61%82.27%88.52% Town of Lexington Financial Summit I – November 20, 2025 Since 2011, Lexington has made consistent contributions towards its Other Post-Employment Benefits (OPEB) liability, primarily consisting of retiree healthcare premiums. In 2021 the assumption for the discount rate was decreased from 7.5% to 6.25%, resulting in an increase in the total OPEB Liability. There are no further reductions anticipated in this assumption. In long-term financial planning, the Town begins funding this obligation more aggressively once the pension obligation has been fully funded. Indicator 10b: OPEB Liability An unfunded OPEB liability or increase in the unfunded liability is considered a warning indicator. Lexington Trend Favorable Marginal Unfavorable Uncertain Actuarial Date (Dollars in ,000's)6/30/2006 6/30/2009 6/30/2011 6/30/2013 6/30/2015 6/30/2017 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 OPEB Liability 255,440$ 266,099$ 306,301$ 131,406$ 195,460$ 143,680$ 137,586$ 145,831$ 266,296$ 246,534$ 268,218$ 265,620$ Plan Assets/Net Position -$ 840$ 2,000$ 3,069$ 5,799$ 9,870$ 15,774$ 18,466$ 24,058$ 23,554$ 27,826$ 34,129$ Net OPEB Liability 255,440$ 265,259$ 304,301$ 128,337$ 189,662$ 133,810$ 121,812$ 127,365$ 242,238$ 222,980$ 240,392$ 231,491$ Percent Funded 0.00%0.32%0.65%2.34%2.97%6.87%11.46%12.66%9.03%9.55%10.37%12.85% 0.00%0.32%0.65%2.34%2.97%6.87%11.46%12.66%9.03%9.55%10.37%12.85% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% $- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 6/30/2006 6/30/2009 6/30/2011 6/30/2013 6/30/2015 6/30/2017 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 Lexington OPEB Fund - Assets and Percent Funded Plan Assets/Net Position Net OPEB Liability Percent Funded Town of Lexington Financial Summit I – November 20, 2025 Over the last 20 years, Lexington has invested extensively in capital projects, including reconstruction and renovations at all 9 schools, municipal buildings such as Public Works and the Fire Headquarters, and continuing programs for street reconstruction, storm water management, recreational facilities and equipment replacement. Many of these projects were funded through the successful passage of debt exclusion votes by residents (see Indicator 12). In the last 5 years the Town has favored the investment of available cash into ongoing capital programs, and has used debt financing sparingly for within-levy capital projects. Net within-levy debt (Row G) will continue to fluctuate depending upon the short-term capital needs of the community. Indicator 11: Debt Service Debt Service exceeding 10 percent of operating revenues is considered a warning indicator by credit rating agencies. Lexington Trend Favorable Marginal Unfavorable Uncertain Fiscal Year (Dollars in ,000s)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10-yr Change A. Gross Exempt Debt Service 8,540$ 8,330$ 10,793$ 13,860$ 16,328$ 17,285$ 16,748$ 16,008$ 16,812$ 16,592$ 94.3% B. Mitigation - Exempt Debt 215$ 2,500$ 4,500$ 5,200$ 4,600$ 2,800$ 800$ 500$ -$ -100.0% C. Net Exempt Debt Service (A - B)8,325$ 8,330$ 8,293$ 9,360$ 11,128$ 12,685$ 13,948$ 15,208$ 16,312$ 16,592$ 99.3% D. Within Levy Debt Service 6,730$ 7,038$ 9,378$ 10,838$ 9,557$ 10,372$ 10,360$ 7,163$ 6,526$ 5,508$ -18.2% E. Mitigation - Within Levy Debt 621$ 710$ 325$ 574$ -$ -$ -$ -$ -$ -$ F. Land Purchase Note Pay-Down -$ -$ 2,351$ 3,050$ 2,235$ 2,403$ 2,339$ -$ -$ -$ G. Net Within Levy Debt (D - E - F)6,109$ 6,328$ 6,702$ 7,214$ 7,322$ 7,969$ 8,021$ 7,163$ 6,526$ 5,508$ -9.8% Total Net Debt Service (C + G)14,434$ 14,658$ 14,995$ 16,574$ 18,450$ 20,654$ 21,969$ 22,371$ 22,838$ 22,100$ 53.1% Commercial/Industrial Share of Net Debt Service 2,981$ 2,975$ 2,980$ 3,289$ 3,686$ 4,238$ 4,983$ 5,221$ 5,282$ 5,253$ 76.2% Residential Share of Total Net Debt Service 11,453$ 11,683$ 12,015$ 13,285$ 14,764$ 16,416$ 16,986$ 17,151$ 17,555$ 16,847$ 47.1% General Fund Revenue 193,583$ 203,261$ 214,544$ 223,563$ 232,588$ 241,503$ 255,071$ 273,437$ 287,575$ 303,502$ 56.8% Net Debt Service as % of Revenue 5.92%5.75%5.60%5.94%6.35%6.80%6.66%6.27%6.10%5.55%-6.2% Households 10,195 10,227 10,285 10,323 10,339 10,373 10,394 10,422 10,428 10,425 2.3% Total Net Debt Service per Household 1,123$ 1,142$ 1,168$ 1,287$ 1,428$ 1,583$ 1,634$ 1,646$ 1,683$ 1,616$ 43.9% 5.92%5.75%5.60% 5.94% 6.35% 6.80%6.66% 6.27%6.10% 5.55% 4.50% 5.00% 5.50% 6.00% 6.50% 7.00% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Net Debt Service as % of General Fund Revenue $1,123 $1,142 $1,168 $1,287 $1,428 $1,583 $1,634 $1,646 $1,683 $1,616 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Residential Share: Total Net Debt Service per Household Town of Lexington Financial Summit I – November 20, 2025 These financial indicators are evaluated by the credit rating agencies as measures of a community's debt burden as well as its level of investment in capital assets. On both measures, Lexington has a strong profile. Note that the increases in long-term debt per household from FY2016-20 and FY2023 are the result of voter-approved exempt debt which financed the renovation, construction and reconstruction of several school buildings and the Town’s Fire Station and Police Station. Indicator 12: Long-Term Debt Overall debt exceeding 10 percent of assessed valuation is considered a warning indicator by credit rating agencies. Lexington Trend Favorable Marginal Unfavorable Uncertain $10,998 $13,759 $16,465 $19,864 $20,489 $18,795 $18,529 $20,092 $19,126 $17,349 $0 $5,000 $10,000 $15,000 $20,000 $25,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Long-Term Debt per Household 1.12%1.33%1.51% 1.72%1.68%1.51%1.37%1.33%1.13%0.98% 0.00% 0.50% 1.00% 1.50% 2.00% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Long-Term Debt as % of Assessed Valuation Fiscal Year (Dollars in ,000s)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10-year Change Outstanding Principal (all funds)112,128$ 140,718$ 169,343$ 205,053$ 211,832$ 194,961$ 192,588$ 209,399$ 199,446$ 180,863$ 61% Assessed Valuation 10,048,548$ 10,589,457$ 11,227,301$ 11,922,400$ 12,598,348$ 12,952,769$ 14,044,935$ 15,745,187$ 17,618,170$ 18,487,763$ 84% Long-Term Debt as a % of Assessed Valuation 1.12%1.33%1.51%1.72%1.68%1.51%1.37%1.33%1.13%0.98%-12% Households 10,195 10,227 10,285 10,323 10,339 10,373 10,394 10,422 10,428 10,425 2% Long-Term Debt per Household $10,998 $13,759 $16,465 $19,864 $20,489 $18,795 $18,529 $20,092 $19,126 $17,349 58% Town of Lexington Financial Summit I – November 20, 2025 The Town of Lexington has several types of reserves, and has strengthened its reserve position by transferring free cash into the General and Capital Stabilization Funds. This adds financial flexibility to the Town's operations and provides a buffer against economic downturns. The Capital Stabilization Fund has declined in recent years in accordance with a long-term plan to mitigate Exempt Debt Service, but a new Capital Stabilization Framework was developed to rebuild this increase this fund going forward. Indicator 13: Reserve and Fund Balance Declining reserves as a percentage of operating revenues is a warning indicator. The Government Finance Officers Association (GFOA) recommends an undesignated fund balance totaling 2 months of operating revenues (16.67%). Lexington Trend Favorable Marginal Unfavorable Uncertain 22.55%24.29%26.04%24.51%24.92%21.61%21.52%21.98%25.95%26.92% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Reserves as % of Net Operating Revenue Free Cash as % of Net Operating Revenues General Stab Fund as % of Net Operating Rev Capital Stab Fund as % of Net Operating Rev All Other Stab Funds as % of Net Oper Rev Total Reserves as % of Net Operating Revenues As of June 30th (Dollars in ,000's)2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10-yr Change Undesignated Fund Balance 17,633$ 16,295$ 18,646$ 16,531$ 22,006$ 21,131$ 22,029$ 23,029$ 29,498$ 27,867$ 58.0% Certified Free Cash 14,088$ 13,062$ 13,401$ 12,717$ 17,338$ 16,384$ 17,119$ 17,032$ 24,097$ 20,500$ 45.5% General Stabilization Fund 9,252$ 9,448$ 9,650$ 9,800$ 9,921$ 10,038$ 10,155$ 10,373$ 10,653$ 10,924$ 18.1% Capital Stabilization Fund 16,726$ 23,203$ 28,598$ 27,728$ 25,229$ 20,674$ 21,731$ 27,331$ 32,770$ 42,671$ 155.1% All Other Stabilization Funds 1,711$ 1,635$ 2,049$ 2,266$ 2,689$ 2,362$ 2,880$ 2,026$ 2,880$ 3,154$ 84.3% Net Operating Revenues 185,258$ 194,931$ 206,251$ 214,203$ 221,460$ 228,818$ 241,123$ 258,229$ 271,264$ 286,910$ 54.9% Free Cash as % of Net Operating Revenues 7.60%6.70%6.50%5.94%7.83%7.16%7.10%6.60%8.88%7.15%-6.0% General Stab Fund as % of Net Operating Rev 4.99%4.85%4.68%4.58%4.48%4.39%4.21%4.02%3.93%3.81%-23.8% Capital Stab Fund as % of Net Operating Rev 9.03%11.90%13.87%12.94%11.39%9.04%9.01%10.58%12.08%14.87%64.7% All Other Stab Funds as % of Net Oper Rev 0.92%0.84%0.99%1.06%1.21%1.03%1.19%0.78%1.06%1.10%19.0% Total Reserves as % of Net Operating Revenues 22.55%24.29%26.04%24.51%24.92%21.61%21.52%21.98%25.95%26.92%19.4% Reserves Town of Lexington Financial Summit I – November 20, 2025 After years of steady enrollment, Lexington Public Schools experienced marked increases from 2010-2017, and peak in 2018-2019. A decline began in 2020 due to the pandemic and enrollments have continued to decline since then. Future increases in enrollment may translate into a need for additional teachers and support staff, as well as additional classrooms and expanded school buildings. The Town has taken steps to build fiscal reserves in anticipation of increase enrollment. Indicator 14a: School Enrollment Rapid changes in school enrollment may affect service levels and may be considered a warning indicator. Lexington Trend Favorable Marginal Unfavorable Uncertain School Year 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Elementary 3,066 3,150 3,094 3,019 2,790 2,702 2,702 2734 2546 2425 Middle 1,743 1,813 1,833 1,828 1,793 1,748 1,765 1769 1737 1695 LHS 2,185 2,212 2,263 2,275 2,261 2,273 2,303 2354 2419 2367 Total Enrollment 6,994 7,175 7,190 7,122 6,844 6,723 6,770 6,857 6,702 6,487 Annual Change 145 181 15 -68 -278 -121 47 87 -155 -215 Rolling 5-Year Average 124 139 122 78 -1 -54 -81 -67 -84 -71 3,066 3,150 3,094 3,019 2,790 2,702 2,702 2674 2541 2425 1,743 1,813 1,833 1,828 1,793 1,748 1,765 1737 1732 1695 2,185 2,212 2,263 2,275 2,261 2,273 2,303 2318 2405 2367 6,994 7,175 7,190 7,122 6,844 6,723 6,770 6,729 6,678 6,487 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Lexington K-12 School Enrollment Breakdown Year-by-Year Elementary Middle LHS Total Enrollment -400 -300 -200 -100 0 100 200 300 400 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 8,000 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 Lexington K-12 School Enrollment and Annual Changes Total Enrollment Annual Change Rolling 5-Year Average Town of Lexington Financial Summit I Indicator Appendices: November 20, 2025 Town of Lexington Financial Summit I – November 20, 2025 Appendix A: Chapter 70 Comparative Data $2,281 $2,428 $2,437 $2,469 $2,512 $2,550 $2,599 $2,627 $2,674 $2,706 $2,711 $3,318 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 Weston Brookline Newton Winchester Wellesley Westwood Average Lincoln-Sudbury Lexington Concord-Carlisle Belmont Acton-Boxborough Chapter 70 Aid Per Pupil Town of Lexington Financial Summit I – November 20, 2025 Appendix A2: Per Pupil Spending $14,794 $15,346 $19,641 $19,836 $20,509 $21,678 $22,118 $23,061 $23,299 $23,882 $25,185 $30,786 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Belmont Winchester Westwood Brookline Lexington Average Wellesley Acton-Boxborough Weston Newton Lincoln-Sudbury Concord-Carlisle Average Per Pupil Spending Town of Lexington Financial Summit I – November 20, 2025 This chart shows the ratio of students as a percentage of the total population of a municipality (or in the case of joint school districts, municipalities). Compared to the average for similar communities & school systems, Lexington has more students as a percentage of the population. Appendix B: Per Pupil Population Comparative Data 5.34% 5.87% 10.92% 13.22% 13.94% 14.24% 16.56% 16.80% 17.22% 17.77% 18.92% 20.11% 0.00%5.00%10.00%15.00%20.00%25.00% Concord-Carlisle Lincoln-Sudbury Brookline Newton Wellesley Average Belmont Acton-Boxborough Weston Westwood Winchester Lexington Pupils as % of Population Town of Lexington Financial Summit I – September 19, 2024 Appendix D: Average Residential Tax Bill Municipality as of FY2025 Single Family Parcels Average Single Family Parcel Value Residential Tax Rate Average Single Family Tax Bill Weston 3,375 $2,294,016 11.1 $25,464Brookline4,584 $2,505,452 9.87 $24,729 Lincoln 1,535 $1,597,397 12.81 $20,462 Wellesley 7,315 $1,925,282 10.28 $19,792Concord4,628 $1,477,028 13.26 $19,585 Lexington 9,065 $1,578,591 12.23 $19,306 Belmont 4,540 $1,648,400 11.39 $18,775Average$5,544 $1,516,777 12.53 $18,172 Winchester 5,684 $1,595,586 11.09 $17,695 Carlisle 1,765 $1,269,939 13.18 $16,738 Sudbury 5,451 $1,116,350 14.64 $16,343Newton16,928 $1,664,692 9.8 $16,314 Acton 5,013 $869,869 17.15 $14,918 Boxborough 1,219 $895,688 15.14 $13,561Westford6,510 $796,584 13.47 $10,730 $10,730 $13,561 $14,918 $16,314 $16,343 $16,738 $17,695 $18,172 $18,775 $19,306 $19,585 $19,792 $20,462 $24,729 $25,464 $5,000 $10,000 $15,000 $20,000 $25,000 Westford Boxborough Acton Newton Sudbury Carlisle Winchester Average Belmont Lexington Concord Wellesley Lincoln Brookline Weston Average Residential Tax Bill - FY2025 Town of Lexington Financial Summit I – November 20, 2025 Appendix E: Comparative Pension Liability Funding 57.5%67.8%70.7%74.4%76.1%86.5%93.0%93.3%95.8% 7.15%6.90%7.63%6.90%7.00%7.25% 6.50%6.00%7.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% Middlesex*Newton Norfolk Brookline Belmont Lexington Concord Wellesley Winchester Funded Pension Level vs Assumed Rate of Return - Comparable Communities Funded Ratio Assumed Rate of Return Municipality Funded Ratio Assumed Rate of Return Year Fully Funded Last Actuarial Study Middlesex*57.5%7.15%2036 1/1/2024 Newton 67.8%6.90%2032 1/1/2025 Norfolk 70.7%7.63%2032 1/1/2024 Brookline 74.4%6.90%2030 1/1/2024 Belmont 76.1%7.00%2031 1/1/2024 Lexington 86.5%7.25%2031 1/1/2025 Concord 93.0%6.50%2031 1/1/2024 Wellesley 93.3%6.00%2029 1/1/2025 Winchester 95.8%7.00%2028 1/1/2025