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Minutes of the
Lexington Capital Expenditures Committee (CEC) Meeting
n May 13, 2019
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Location and Time: Town Office Building, Reed Room (111); 7:45 A.M.
Members Present: Charles Lamb, Chair; David Kanter, Vice-Chair& Clerk; Sandy Beebee;
Frank Smith
Members Absent: Rod Cole; Wendy Manz
Others Present: Deepika Sawhney, School Committee Liaison; Sara Arnold, Recording
Secretary
Documents Presented:
• Notice of CEC Meeting, May 13, 2019
• Financial Policies and Planning Presentation ("Presentation"), prepared by staff for
the Spring Budget Summit, May 15, 2019
• Fiscal Policy Review Memorandum from Jim Malloy, Town Manager; Carolyn Kosnoff,
Assistant Town Manager for Finance; Jennifer Hewitt, Budget Officer to Board of
Selectmen; Appropriation Committee, Capital Expenditures Committee, School
Committee, May 7, 2019
• Town of Lexington Ad Hoc Financial Policy Committee Report to Board of Selectmen,
March 15, 2006
• Extract from Board of Selectmen's 6 May 2019 Meeting Agenda; Agenda Item Title:
Goal Setting Discussion; Presenter: Jim Malloy, Town Manager
Call to Order: Mr. Lamb called the meeting to order at 7:50 A.M.
Preparation for the May 15, 2019, Financial Summit: A page-by-page review of the
Presentation resulted in comments that included, but were not restricted to, the following:
Slide #4, Anticipated Summit Outcomes, Roadmap for Achieving Summit Outcomes,
Item #2: It will be necessary to identify dates when this Committee is available to meet
with staff, but the timeframe for such meetings has not been identified.
Slide #5, Lexington's Financial Goals and Objectives:
• Item #4: The Department of Public Facilities has considerable documentation
regarding Town-owned buildings, but it isn't clear whether the Department of
Public Works has comparable information on the venues for which it is
responsible, including its Enterprise Funds.
• Item #5: Mr. Kanter expressed concern with the goal of stabilizing the
year-over-year fluctuations in residential tax bills when some taxing to less
than the levy limit is being considered.
Slide #6, Eliminating Use of Free Cash for Operating Budget: It was noted that in the
past the Town has produced very-conservative budgets that usually resulted in
significant Free Cash at the end of the year. Mr. Kanter questioned whether the Town
Manager might be considering less-conservative budgeting thereby likely to result in
less free cash.
Slide #7, Tax to the Levy Limit vs. Creating Excess Levy Capacity: Mr. Lamb
questioned whether it was within this Committee's purview to weigh in on the
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Minutes of the Lexington Capital Expenditures Committee (CEC) Meeting
May 13, 2019
considerations for setting the tax rate, which include taxing to the levy limit or"banking"
excess levy allowed until it is needed. Others felt it is within the Committee's purview
as any decision on the tax rate affects the total funding that is available which, in turn,
affects funding for other than the large Capital projects excluded by taxpayers' support
during debt-exclusion referendums. Mr. Lamb also raised the question whether a
decision on tax-rate setting would have an effect on the taxpayers' support of such
referendums.
Slide #11, Decision Tree—Tax Rate Setting: It was agreed that this Committee would
not take a position on the considerations for setting the tax rate until staff has time to
present the pros and cons.
Slide #12, Personal Property Tax New Growth: Mr. Lamb questioned whether it was
within this Committee's purview to weigh in on those personal-property discussions
because this does not directly impact cash-capital funding. Others noted that
personal-property tax revenue also contributes to available funds for such funding
along with other discretionary spending.
Slide #15, Tax Levy Distribution Over Time: Mr. Kanter noted that
commercial-property values are, to his knowledge, based on the ability to generate a
cash flow, rather than the relevant market-sales history used for residential property,
and that the cash-flow information is reported by the owner without independent
verification by the Town. Mr. Lamb commented that businesses have their own
auditors and can be audited by the Internal Revenue Service.
Slide #17, Use and Funding of Stabilization Funds, Capital Stabilization Fund: It was
agreed that this Committee would comment on the use of the Capital Stabilization
Fund.
Slide #19, Use and Funding of Stabilization Funds, Hypothetical High School Funding
Analysis: More information is needed to understand that analysis. Mr. Lamb plans to
draft some comments on this subject. He noted that the Town of Arlington's current
estimate for building a new high school with a design capacity of 1,755 students is
$290.8 million; that Lexington is projecting to have a high-school enrollment of 2,600
to 2,700; and, as shown in the slide, Lexington continues to use $350.0 million for its
estimate for a new high school. Ms. Sawhney reported that the School Committee has
not discussed the costs, but nothing indicates that it would cost more than
$350.0 million.
Member Concerns and Liaison Reports:
Ms. Beebee, as liaison to the School Master Planning Committee, reported that the need for
additional modular buildings and an expanded cafeteria, both to accommodate the projected
400-student increase at Lexington High School, is anticipated to occur prior to the building of
a replacement or retrofitted high school. She added that the cafeteria is already overcrowded.
The Schools Administration is hoping to final alternative, lower-cost, solutions.
Mr. Kanter reported that Mr. Malloy has recommended the use of a facilitator to meet with
the Chairs of major committees prior to assisting the Board of Selectmen during its
goal-setting activities. Mr. Kanter expressed interest in participating as an additional
representative for this Committee. He also noted that Mr. Malloy has suggested that such
goal setting should be held every other year rather than annually.
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Minutes of the Lexington Capital Expenditures Committee (CEC) Meeting
May 13, 2019
This Committee agreed that, depending on the availability of Mr. Cole and Ms. Manz, this
Committee would meet on June 5, 2019, for a follow-on discussion of the upcoming May 15th
Financial Summit. Mr. Lamb said that June 5t" meeting would also provide an opportunity to
consider any reorganization of this Committee that may be of interest to its members.
Adjourn: A Motion was made and seconded at 9:08 A.M. to adjourn. Vote: 4-0.
These Minutes were approved by the CEC at its meeting on June 5, 2019.
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