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HomeMy WebLinkAbout2020-07-08-AC-min 07/08/2020 AC Minutes Minutes Town of Lexington Appropriation Committee (AC) July 8, 2020 Place and Time: Remote Participation: in accordance with the Governor's March 12, 2020 Order Suspending Certain Provisions of the Open Meeting Law; communication took place via a Zoom teleconferencing session that was open to the public; 7:00 p.m. Members Present: Glenn Parker, Chair; Sanjay Padaki, Vice-Chair; Alan Levine, Secretary; John Bartenstein; Eric Michelson; Meg Muckenhoupt; Nick Nichols; Lily Manhua Yan; Carolyn Kosnoff, Assistant Town Manager, Finance (non-voting, ex officio) Member(s)Absent: None Other Attendees: David Kanter, Vice-Chair and Clerk, Capital Expenditures Committee (CEC) Using the Remote Meeting Prologue as a guide, Mr. Parker confirmed attendance by roll call and reviewed the section entitled Introduction to Remote Meeting, noting that the meeting was being called to order at 7:05 p.m. on July 8, 2020 and that the meeting was being recorded to assist in the writing of minutes. He also reviewed the section entitled Meeting Protocol and noted that materials for the meeting were available on-line. Announcements and Liaison Reports Mr. Levine reported that in late May, there was a virtual meeting of the School Master Planning Committee, during which a draft 80-page compendium, a shorter version of a 450-page report prepared by DiNisco Design, was reviewed. In early June, Mr. Levine provided the Superintendent of Schools, Julie Hackett, with suggested edits but has not yet received any feedback. Mr. Michelson reported that Dave Horton had stepped down as Lexington's representative on the Minuteman District School Committee, and the Select Board (SB) had appointed Judy Crocker to replace him. Ms. Kosnoff reported that the Town had issued a 15-year$20 million bond in mid-June; its true interest cost was 1.3 % and includes a $2.4 million premium resulting in an $18 million par value. This was instead of issuing Bond Authorization Notes, as is common practice at this time of year, because the Town's financial advisors had advised that rates were currently low, and the market could experience some turmoil after the November federal elections. Because the issuance was in FY2020, a principal payment will be due in FY2021. The approved FY2021 budget does not authorize such an expenditure, but staff plans to recommend a fall special town meeting amendment to the budget requesting an appropriation from the Capital Stabilization Fund for that principal. The bond is almost entirely for excluded debt projects for which the money has already been spent: Hastings Elementary School, the Fire Station, Lexington Children's Place, and a small amount for the Visitors Center. Ms. Kosnoff noted that this bond covers all of Lexington's remaining excluded debt and stressed that the bond would have been issued in February 2021 if not at this time. Mr. Nichols reported that he had been reappointed to this Committee so that he could participate as a member through this evening, but he is moving to Charlottesville, NC, likely before the fall Special Town Meeting and will be resigning from the Committee. Mr. Parker noted that Mr. Nichols had discussed his plans with Mr. Parker and Deborah Brown, the Town Moderator. Members and Mr. Kanter expressed their appreciation for his valuable contributions on the Committee and as liaison to the CEC. Mr. Parker reported that Ms. Brown is seeking new members 1 07/08/2020 AC Minutes for this Committee; he asked that suggestions be submitted to her, noting that members must be registered voters. Final Adjustments to the FY2020 Budget Ms. Kosnoff reported that she was presenting six FY2020 year-end budget adjustments for AC approval/support to avoid end-of-year deficits, as follows: • Transfers from Salary Transfer Account: This account is used for retroactive payments, updated rates for base salaries and other personal service expenses that result from finalized contract negotiations.: ➢ $254,759.00 for the Fire Department ➢ $195,000.00 for the Police Department ➢ $10,000.00 for the Town Clerk's office Ms. Kosnoff added that there was $1,203,956 in the account, and with the above withdrawals, plus the withdrawal of funds for the recently approved Department of Public Works contract, there will be $483,558 remaining, some of which may go to free cash. • Transfers from the Reserve Fund: This is a fund that requires AC approval to use and both requests are related to Covid-19 expenses: ➢ $100,000.00 for Fire Department Overtime. This will ultimately be reimbursed from FEMA or the CARES Act. ➢ $95,850 for Police details at the Aloft Hotel where homeless people with Covid-19 received care. MEMA/FEMA reimbursements are expected. • End-of-Year Transfer between Departmental Line Items ➢ $211.00 from the Contributory Retirement account to the Non-Contributory Retirement account, necessary because of a clerical error during FY2020 budget development. Ms. Kosnoff answered questions and clarified information related to the FY2020 and FY2021 budgets. Her comments included the following: • Reimbursements will likely be treated as miscellaneous non-recurring revenue for the fiscal year in which the funds are received by the Town. • Staff in the Town Clerk's office accrued considerable overtime associated with the virtual 2020 Annual Town Meeting, which prevented this department from absorbing the $10,000 that is being requested from the Salary Transfer Account. • All municipal union contracts are currently settled. • There is value in keeping a balance in the Salary Transfer Account. • Lexington expects to get $2.9 million from the CARES Act to help cover pandemic related expenses and this can be used for costs associated with mail-in ballots. Town meeting does not need to approve expending CARES Act revenue; these are reimbursements. • FY2020 ended with a surplus, with revenues above projections and expenses below projections, but significant revenue shortfalls are anticipated in FY2021. The Recreation Department has been particularly affected; only the golf course is generating revenue. Other programs with lost revenue include the Liberty Ride, Lexpress, the Visitors' Center, hotel/motel and meal taxes, and parking funds. • FY2020 State aid is scheduled to be at the targeted amount. It is not known what will happen with State aid for FY2021. • The large commercial companies in Lexington have not been severely impacted financially by the pandemic, with the exception of the Boston Sports Club. Revenue losses by 2 07/08/2020 AC Minutes businesses could negatively affect rents and thus the assessed value of commercial, industrial, and personal property, which in turn would result in a higher tax rate for residents in future fiscal years. • The end-of-year free cash balance has not yet been determined A motion was made and seconded to recommend approval to the SB of the three transfers from the Salary Transfer Account, as described above, and the line item adjustment as described above. There was a roll call vote. The motion passed. VOTE: 8-0 A motion was made and seconded to approve the two transfers from the Reserve Fund, as described above. There was a roll call vote. The motion passed. VOTE: 8-0 Ms. Kosnoff and Mr. Parker worked out plans for getting Mr. Parker's signature on the documents authorizing the transfers, as needed. Minutes It was determined that the draft June 3, 2020 minutes had not been distributed for comments. Ms. Arnold agreed to forward them. A motion was made and seconded to approve this Committee's May 7, 2020 minutes. There was a roll call vote. The motion passed. VOTE: 8-0 Future Meetings Ms. Kosnoff noted that there may be two special town meetings in the fall. Mr. Parker agreed to conduct a Doodle Poll to find a date for the next meeting. The meeting adjourned at 8:01 p.m. Respectfully submitted, Sara Arnold Approved: August 20, 2020 Exhibits • Agenda, posted by Mr. Parker, Chair • Remote Meeting Prologue • FY2020 End of Year Fund Transfer Documents 3