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HomeMy WebLinkAbout2025-12-04-AC-min.pdf 12/4/2025 AC Minutes 1 Minutes Town of Lexington Appropriation Committee (AC) December 4, 2025 Place and Time: Remote participation via a Zoom teleconferencing session that was open to the public; 7:30 p.m. Members Present: Glenn Parker, Chair; Sanjay Padaki, Vice-Chair; Alan Levine, Secretary; John Bartenstein; Sean Osborne; Vinita Verma; Lily Yan; Carolyn Kosnoff, Assistant Town Man- ager, Finance (non-voting, ex officio) Members Absent: Anil Ahuja; Eric Michelson Other Attendees: Charles Lamb, Capital Expenditures Committee (CEC); Eileen Jay, School Com- mittee; Lisah Rhodes, CEC All votes recorded below were conducted by roll call. At 7:33 p.m. Mr. Parker called the meeting to order and took attendance. Announcements and Liaison Reports Ms. Verma reported that the Community Preservation Committee plans to vote on December 11 on funding for the projects under consideration. She read a list of the projects and agreed to circulate it to all Committee members. Ms. Kosnoff stated that the financing plan for the project to upgrade the Munroe School building, which houses the Munroe Center for the Arts, has been revised. When originally approved by Town Meeting, the project was to be funded with a combination of cash ($4 million) and debt ($2 million) from the Community Preservation Fund (CPF). In view of the cash balances now available in the CPF, a decision was made to use all cash with no debt. Work on the project will commence soon. Ms. Kosnoff said that the Town has recently submitted tax recap and balance sheets to the state. The tax recap is likely to be approved within a week. The balance sheet is a first pass at determining an amount of free cash; its approval will take more time. Financial Summit Follow-up Ms. Kosnoff noted that the revenue estimates given at the November 20 Financial Summit may have been somewhat optimistic, meaning that actual revenue could be lower. She re-emphasized that the anticipated increase of about 15% in health insurance premiums for active and retired em- ployees will consume most of the anticipated revenue increase from FY2026 to FY2027. The initial budget allocation for FY2027 allowed for only a 2.4% increase in school and municipal operating budgets. The currently requested increases for an FY2027 level-service operating budget are 4.6% for the school department and 4.7% for municipal departments. Staff believe they can bridge part of the budget gap, sufficient to support up to 3.5% growth in the operating budgets, by applying some free cash. The use of “one-time” revenue for ongoing programs is undesirable be- cause it creates an ongoing structural imbalance. 12/4/2025 AC Minutes 2 In response to a question from Mr. Bartenstein, Ms. Kosnoff said that she expects the FY2028 budget to be tight like the FY2027 budget that is under development. Mr. Bartenstein raised the possibility of avoiding a structural deficit by using some of the ongoing tax levy revenue that is cur- rently earmarked to mitigate debt service for the LHS project under the Capital Stabilization Fund- ing Framework to help bridge the gap. The sense of the Committee was that prior new growth reve- nue already earmarked should not be diverted because that would violate commitments made to vot- ers in connection with the upcoming debt exclusion referendum. However, it might be possible to adjust the Framework so that new growth revenue from future projects that has not yet been ear- marked could be applied to help balance the operating budget. Ms. Kosnoff and Mr. Lamb noted that the delivery of a new ladder truck is not expected until four years after the appropriation that will be requested at the 2026 Annual Town Meeting, and that the Town will not have to pay for the truck until it is delivered. Using debt for the $2.5 million cost of the ladder truck would avoid encumbering those funds for the next several years, thus increasing the free cash available for this year’s cash capital needs. There was general discussion of the differences in the effects on future budgets should the upcom- ing debt exclusion vote on the high school project pass or fail. Ms. Jay recommended viewing the Lexington Public Schools (LPS) budget video presentation that was made for the summit. The strat- egies used to keep the FY2025 school budget from going into deficit and several potential cost-sav- ing measures for the upcoming and future fiscal years are described in that presentation. The CEC meeting scheduled for December 5, 2025, will include a discussion with Town Manager Steve Barth. Mr. Parker will attend. Ms. Kosnoff noted that the Select Board budget hearings have started and summarized the schedule for the remaining hearings. Future Meeting Schedule Ms. Kosnoff stated that a decision had been made to hold an additional financial summit meeting. The Select Board was polled regarding a date and preferred Wednesday, January 7. All AC mem- bers present said they would be available on that date. Mr. Parker presented a list of potential meeting dates between this meeting and the start of the 2026 Annual Town Meeting. It was agreed to schedule meetings on December 18, January 8, January 22, and most of the Thursdays following the latter date, with the possible exception of the Thursday during February school vacation. Ms. Kosnoff suggested focusing on CPA projects in the earlier meetings. The draft warrant for the annual town meeting should be available by January 22. Mr. Parker said he will not be able to attend a meeting on January 15, and Mr. Padaki was not sure he could remotely attend a meeting on January 22. Mr. Bartenstein suggested that a future AC meeting could include a discussion of the paper recently released by the Massachusetts Municipal Association entitled “A Perfect Storm: Cities and Towns Face Historical Fiscal Pressures.” The paper outlines the financial stresses that are currently affect- ing Massachusetts cities and towns. Minutes of Prior Meetings Minutes for the meeting of November 3, 2025, were approved with one minor edit by a vote of 7-0. 12/4/2025 AC Minutes 3 Adjourn The meeting was adjourned at 8:42 p.m. Respectfully submitted, Alan M. Levine Approved: January 8, 2026 Exhibits ● Agenda, posted by Mr. Parker