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HomeMy WebLinkAbout2020-01-14-AC-min 01/14/2020 AC Minutes Minutes Town of Lexington Appropriation Committee (AC) January 14, 2020 Place and Time: Cary Memorial Building, Hudson Room, 7:30 p.m. Members Present: Glenn Parker, Chair; Sanjay Padaki, Vice-Chair; Alan Levine, Secretary; John Bartenstein; Lily Manhua Yan; Eric Michelson; Meg Muckenhoupt; Nick Nichols; Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio) Member(s)Absent: None Other Attendees: Deepika Sawhney, School Committee School Committee The meeting was called to order at 7:40 p.m. Announcements and Liaison Reports Mr. Bartenstein reported on a proposal before the Select Board to seek a home rule petition which would allow a one-year delay in the increase of the interest rate prescribed by State law on residential tax deferrals following the death of a homeowner. Lexington residents who have been granted tax deferrals are charged interest at a relatively low rate based on treasury bill rates, currently about 2%, which applies for the life of that year's deferral, i.e., until the property is sold (no transfer may be made until the deferred taxes are paid) or the resident dies. Upon the death of the resident, state law provides that the interest rate increases to 16%. Since it may take months to settle an estate and arrange for sale or transfer of the property, this high interest rate can pose a hardship. The proposed home rule petition would allow the Town to provide a one-year grace period after the death of a resident before the interest rate is increased from the deferral rate to the statutory rate of 16%. During discussion, it was noted that a resident has to submit qualifying documentation annually, and the loan can be paid off any time. Ms. Kosnoff reported that there will be an effort to start financial articles on the first night, i.e., March 23, of the 2020 Annual Town Meeting (ATM). 2020 ATM Articles Mr. Parker agreed to prepare a spreadsheet with preliminary article assignments for Committee members. He noted that members could make mutually agreeable changes to the assignments. He urged members to begin researching those articles to which they are assigned, noting that there are only 10 weeks before the start of the annual town meeting. It was noted that Minuteman Regional High School officials estimate that their budget request will increase considerably. Ms. Kosnoff reported that the school has used a worst-case scenario for preparing its budget, but, nonetheless, does not expect that the request will come in much lower than the present estimate. Mr. Michelson added that enrollment from the member communities has been low. In response to questions, Mr. Michelson noted that grants are generally used to improve current or start new programs; they generally do not reduce current program costs. Minutes There was a brief discussion about two sets of minutes that were ready for approval. A motion was made and seconded to approve the minutes for November 12, 2019 and December 11, 2019. The motion passed. VOTE: 8-0 1 01/14/2020 AC Minutes FY2021 Budget Summit 3 In preparation for Budget Summit 3, Ms. Kosnoff reported the following: • The revenue model being used has not changed. • Staff presented the proposed budget to the Select Board (SB)last night. • The Town would like to collect one more year of data on solar panel energy generation before increasing solar energy revenue projections. • It has been decided to postpone a request to construct a new Police Headquarters facility until a fall 2020 special town meeting. A debt exclusion referendum will be scheduled to follow the appropriation of funds by the town meeting. The Town's recently adopted Integrated Building Design Policy has increased the project's cost by approximately $1.0 million, but some operating costs are expected to decrease because of increased efficiency in the use of energy. The current design preserves two outside walls in response to Historic Districts Commission comments/requests. The SB is exploring alternatives that would reduce costs. It was noted that the Director of Public Facilities believes that the cost of the facility increases about$100,000, due to inflation of construction costs, for each month that it is postponed. • Funds to design the Police Headquarters - approximately $1.8 million–have been appropriated. • There are plans to allow the sale of the Hosmer House to someone who would move it off site. • There is an increase in the Town Clerk's budget. • Staff will recommend that unallocated tax levy funds go into the Stabilization Fund, while the $200,000 in free cash not go into the Stabilization Fund. The FY2019 free cash has not yet been certified. Mr. Levine suggested that it might be better if a small portion of the funds recommended to be appropriated into the Other Post-Employment Benefits (OPEB) fund were rather put into the Capital Stabilization Fund (CSF), although he agreed that an amount sufficient to ensure continuation of the Town's Aaa bond rating should be appropriated for OPEB. His concern stems from the need to build a new high school. Mr. Nichols noted that the CSF account only gets 2%interest on its funds, while the OPEB fund is currently getting an 8.0%return. Ms. Kosnoff reported that the Town's actuary is currently evaluating the OPEB liability. She noted that bond agencies look at all the reserves—free cash, unallocated funds, OPEB, and the CSF and added that the date for a fully funded pension fund fluctuates. 2020 ATM Report Planning There was discussion about inviting article proponents to discuss selected articles. It was agreed that representatives from the School Department should be invited and that Matt Daggett should be invited to discuss his citizen article about development and affordable housing. For other articles, the AC author for the particular article should evaluate whether other invitations should be considered. Referring to each article, it was determined which articles would warrant comment by this Committee and who would assume responsibility for writing AC comments for the article. It was noted that the Lexington Housing Assistance Board had withdrawn its request for Community Preservation Act funds, Brookhaven at Lexington had submitted its annual payment($111,000 for FY2020), and a draft Warrant was distributed to the SB last night. 2 01/14/2020 AC Minutes Using present value in budget analysis It was agreed to defer this discussion to next week's meeting. The meeting adjourned at 8:58 p.m. Respectfully submitted, Sara Arnold Approved: January 30, 2020 Exhibits Agenda, posted by Mr. Parker, Chair 3