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HomeMy WebLinkAbout2020-11-05 Summit II Packet - Released Financial Summit II Select Board, School Committee,Appropriation Committee, Capital Expenditures C o mmitte e November 5, 2020 7:00 PM Conducted by Remote Participation* AGENDA ITEMS FOR INDIVIDUAL CONSIDERATION 1. FY2022 Detailed Revenue Projections 7:OOpm 2. FY2022 Proposed Revenue Allocation and Policy Discussion 7:25pm 3. Establish Date: Summit III 7:55pm ADJOURN 1. Anticipated Adjournment 8:OOpm *as per Executive Order regarding remote participation:http s://www.mas s.go v/do c/op en-meeting-law- order-march-12-2020/download Members of the public can view the meeting webinar from their computer or tablet by clicking on the following link at the time of the meeting:https://zoom.us/j/95860630692pwd=bOwld2dLazMlem5WZVZacDNwR3ZUZz09 iP ho ne one-tap: +13017158592„95860630692# or+131262667995595860630692# Telephone:+1 301 715 8592 or+1 312 626 6799 Web inar I D: 958 6063 0692 Passcode: 655372 The next regularly scheduled meeting of the Select Board will be held by remote participation on Monday, November 9, 2020 at 6:OOpm. Hearing Assistance Devices Available on Request All agenda time and the order of items are approximate and subject to change. Leiqe la Recorded by LexMedia AGENDA ITEM SUMMARY LEXINGTON BOARD OF SELECTMEN MEETING AGENDA ITEM TITLE: FY2022 Detailed Revenue Projections PRESENTER: ITEM NUMBER: Carolyn Ko sno ff,Assistant Town Manager for F inanc e I.1 SUMMARY: Staff will present detailed FY2022 operating revenue projections as the basis for the FY2022 revenue allocation model and operating budget. SUGGESTED MOTION: FOLLOW-UP: DATE AND APPROXIMATE TIME ON AGENDA: 11/5/2020 7:OOpm ATTACHMENTS: Description Type �O////�iLfl 6WmIMWIWPWO➢01'n'ntl�IIIR //®hA\VN mmn A AVIIIU l(r. 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C8 Town of Lexington - FY2022 Revenue-ProLections 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 special revenue funds, Specialized Stabilization Funds, and the Health Care Trust Fund. • Net General Fund Revenues are Total General Fund Revenues less revenues recommended to be set-aside to fund designated expenses. In FY2022, Total General Fund Operating Revenues are projected to increase by approximately$15.13 million, or 6.5%. Net General Fund Revenues, those available to support school and municipal operating budgets, are projected to increase by$8.70 million, or 3.9%. FY2019 FY2020 FY2022 FY2021-22 Change General Fund Revenue Summary Actual Actual FY2021 Recap Projected $ 0/0 Property Tax Levy(Table 1) $ 17678411054 $ 1847821,513 $ 19413917932 $ 20270017730 $ 776097798 3.91% State Aid(Table 2) $ 16,013,450 $ 16,255,912 $ 16,261,624 $ 167247,259 $ (147366) (0.09)% Local Receipts(Table 3) $ 16,968,556 1$ 16,734,357 1$ 127127,768 $ 1276247539 $ 496,771 1 4.10% Available Funds(Table 4) $ 14,4851806 $ 14,314,142 $ 1178181847 $ 1975267308 $ 777077461 65.21% Other Available Funds-Use of Capital $ 5737500 $ — $ — $ — $ — —% Stabilization Fund(Table 4a) Revenue Offsets(Table 5) $ (1,963,922) $ (1,875,209) $ (1,781,086) $ (27215,313) $ (434,227) 24.38% Enterprise Receipts(Table 6) $ 156467939 $ 17696,348 $ 177497435 $ 175151814 $ (233,621) (13.35)% Total General Fund Operating $ 22475657383 $ 23179475062 $ 234,568,520 $ 2493700,337 $ 15,131,817 6.45% Revenues Less-Revenues Set-Aside for $ 13,651,982 $ 12,495,310 $ 97112,431 $ 1575427298 $ 6,4297867 70.56% Designated Purposes Net General Fund Revenues $ 21079137401 $ 219,451,752 $ 2257456,089 $ 23471587039 $ 877017950 1 3.86% Detailed Description: Property Tax Levy: The FY2022 property tax levy is projected to increase approximately$7.61 million, or 3.9%. The projected levy is a function of the FY2021 levy limit increased by 2.5% per Proposition 21/2, plus an increment for new growth. FY2022 new growth will be a function of construction activity for the period July 1, 2020 to June 30, 2021. FY2022 new growth is estimated at$2,750,000 based on a review of historical data on new growth. State Aid: The main driver of state aid increases in FY2017 and FY2018 was education aid (Chapter 70). In FY2018, Lexington finally received its full funding under the Chapter 70 formula; therefore, much smaller increases of 1.57% and 1.55% were received for FY2019 and FY2020. Due to the pandemic, Local Aid was level-funded in FY2021, which is projected to continue in FY2022. The Town receives reimbursement for 75% of its expenses for Veterans benefits, which have been gradually decreasing, and are projected to fall by another$14,366 in FY2022, resulting in an overall decrease of (0-09)%. The State is still finalizing its FY2021 budget; the initial FY2022 State aid numbers will be available in January 2021, once the Governor releases his budget. Final figure are likely to be known in June 2021 when the Legislature adopts, and the Governor signs, the FY2022 State budget. Revenue Executive Summary 2 November 5, 2020 i,40R C8 Town of Lexington - FY2022 Revenue-ProLections Local Receipts: FY2022 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 the pandemic, such as Other Excise - Meals and Hotel/Motel. FY2022 local receipts are estimated to increase by approximately$496,771 or 4.10% over FY2021 estimates, which were also adjusted for the pandemic. The main contributors to this growth are a partial rebound in Other Excise. Available Funds: Due to the pandemic, the FY2021 budget removed more than $3 million from Available Funds by reducing or eliminating contributions to the Capital Stabilization Fund and the OPEB Trust Fund. Those funds were carried forward, and are now available for FY2022, which has inflated the value in this category, with an increase of$7,707,461, or 65.21%. FY2022 Available Funds includes a transfer$141,000 from the Transportation Demand Management Stabilization Fund to finance the Lexpress service and the Town's contribution to the REV Shuttle, consistent with prior years. In FY2022, $0 is proposed to be drawn from the Capital Stabilization Fund to fund the ongoing mitigation of within-levy debt service. No funds were needed for this purpose in FY2021. Revenue Offsets: Revenue Offsets are projected to increase by approximately$434,227 or 24.38%. 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; (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 FY2022 increase in total Revenue Offsets is driven by the set-aside of$400,000 in estimated FY2022 revenue to cover a potential snow and ice deficit at the end of FY2021. For FY2021, $400,000 was set-aside, but did not end up being needed since actual FY2020 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. Because of the pandemic, Recreation Enterprise revenues have seen dramatic reductions, requiring support from the General Fund in FY2021, and causing the Town to reconsider how to fund the department going forward. As a preliminary measure, Recreation indirect revenues have been eliminated in FY2022. The remaining transfers from Water and Sewer are increasing by 3.0% as a preliminary figure until Finance staff have completed an updated indirect analysis. Revenue Executive Summary 3 November 5, 2020 i,40R C8 cs' Town of Lexington - FY2022 Revenue-ProLections 111 11 1 moommommommommommomm MENEM= I FY2022 FY2021-22 Change FY2019 Actual FY2020 Actual I FY2021 Recap, Projected $ % P Table 1: Property Tax Levy Tax Levy $ 169,402,066 $ 176,907,123 $ 184,938,304 $ 194,391,932 $ 9,453,629 5.11% Prop.2.5% $ 4,235,052 $ 4,422,678 $ 4,623,458 $ 4,859,798 $ 236,341 5.11% New Growth $ 3,270,005 $ 3,608,503 $ 4,830,171 $ 2,750,000 $ (2,080,171) (43.07)% Override/Excess Levy Capacity Is 66,069 $ 116,791 NAI NA Subtotal $ 1768419054 1$ 184,8219513 1$ 194,391=932 $202,001,730 $ 71609,798 3.91% Table 2:State Aid Chapter 70 $ 14,217,984 $ 14,456,349 $ 14,456,349 $ 14,456,349 $ - -% Charter School Reimbursement $ 6,532 $ 2,446 $ - $ - $ - -% Unrestricted General Government Aid $ 1,584,615 $ 1,627,400 $ 1,627,400 $ 1,627,400 $ - -% Veterans'Benefits&Exemptions $ 154,023 $ 117,802 $ 124,689 $ 110,324 $ (14,366) (11.52)% Offsets(Library) Is 50,296 $ 51,915 $ 53,186 $ 53,186 $ - -% . Table 3: Local Receipts Motor Vehicle Excise Tax $ 5,649,362 $ 5,383,364 $ 5,465,000 $ 5,476,000 $ 11,000 0.20% Other Excise $ 1,659,673 $ 1,503,388 $ 412,000 $ 824,000 $ 412,000 100.00% Penalties&Interest $ 566,632 $ 564,274 $ 341,500 $ 341,500 $ - -% PILOT's $ 619,192 $ 666,153 $ 683,000 $ 684,000 $ 1,000 0.15% Rentals $ 459,765 $ 431,498 $ 393,275 $ 394,850 $ 1,575 0.40% Departmental-Schools $ 371,985 $ 331,482 $ 88,500 $ 93,500 $ 5,000 5.65% Departmental-Municipal $ 2,692,170 $ 2,607,887 $ 2,472,525 $ 2,540,025 $ 67,500 2.73% Licenses&Permits $ 2,725,133 $ 3,021,668 $ 1,906,600 $ 1,906,600 $ - -% Special Assessments $ 32,790 $ 19,781 $ 14,368 $ 13,064 $ (1,304) (9.08)% Fines&Forfeits $ 189,845 $ 152,654 $ 101,000 $ 101,000 $ - -% Investment Income $ 1,781,573 $ 1,297,265 $ 250,000 $ 250,000 $ - -% Miscellaneous Non-Recurring $ 220,435 $ 754,943 $ - $ - $ - 100.00% Table 4:Available Funds Parking Fund $ 413,000 $ 425,750 $ 385,000 $ 385,000 $ - -% Cemetery Perpetual Care Fund $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ - -% Cemetery Sale of Lots Fund $ 55,090 $ 64,380 $ 40,480 $ 40,480 $ - -% Free Cash* $ 12,422,051 $ 12,201,094 $ 9,593,456 $ 16,212,796 $ 6,619,340 69.00% Health Claims Trust Fund $ 750,000 $ 750,000 $ 750,000 $ 750,000 $ - -% Transportation Demand Management Stab. $ 141,000 $ 141,000 $ 141,000 $ 141,000 $ - -% Fund Traffic Mitigation Stabilization Fund $ - $ - $ - $ - $ - -% Center Improvement District Stabilization Fund $ 27,000 $ 27,000 $ - $ - $ - -% PEG Access Special Revenue Fund $ 623,267 $ 638,918 $ 652,711 $ 652,711 $ - -% Betterments Fund $ 4,398 $ 16,000 $ 6,200 $ - $ (6,200) (100.00)% Visitors Center Stabilization Fund $ - $ - $ 200,000 $ - $ (200,000) (100.00) General Stabilization Fund $ - $ - $ - $ 1,294,321 $ 1,294,321 -% Avalon Bay School Enrollment Mitigation/ $ - $ - $ - $ - $ - -% School Bus Stabilization Funds Balances from Prior Yr.Capital Articles $ - $ - $ - $ - $ - -% Table 4a:Other Available Funds Capital Stabilization Fund $ 573,500 $ - $ - $ - $ - - --- Table 5: Revenue Offsets Cherry Sheet Assessments $ (813,626) $ (923,294) $ (977,900) $ (1,012,127) $ (34,226) 3.50% Cherry Sheet Offsets-Public Libraries $ (50,296) $ (51,915) $ (53,186) $ (53,186) $ - -% Overlay(abatements) $ (800,000) $ (900,000) $ (750,000) $ (750,000) $ - -% Snow Deficit $ (300,000) $ - $ - $ (400,000) $ (400,000) - Subtotal $ (159639922) $ (1 1875209) $ (1j815086) $ (2)215313) $ (434)227)1 24.3-870/ol Revenue Executive Summary 4 November 5, 2020 i,40R C8 cs' Town of Lexington - FY2022 Revenue-ProLections Table 6: Enterprise Receipts Water $ 869,833 $ 894,573 $ 930,001 $ 957,901 $ 27,900 3.00% Wastewater(Sewer) 1$ 515,280 $ 532,094 $ 541,663 $ 557,913 $ 16,250 3.00% Recreation&Community Programs $ 261,826 $ 269,681 $ 277,771 $ - $ (277,771) (100.00)% Gross General Fund Revenues $ 22495659383 $ 231,947,062 $ 234,5689520 $2493700,337 $ 15,131,817 1 6.45% Revenues Set Aside for Designated $ 13,6513982 $ 12,4959310 $ %112,431 $ 15,5421298 $ 6142%867 70.56% Expenses Net General Fund Revenues Available $ 21099139401 $ 2193451,752 $ 225,4569089 $2343158,039 $ 837013950 3.86% for Appropriation 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 FY2022 are shown in the table below. Financing Sources Tax Levy Free Cash Other Total Notes 1 Set-Aside for Unanticipated $ 200,000 $ 200,000 Reserved for appropriation at the 2021 annual town Current Fiscal Year Needs meeting to fund supplemental appropriations to the FY2021 budget. 2 Other Post-Employment $ 750,000 $ 1,129,721 $ 1,879,721 $750,000 from the tax levy made available from the Benefits(OPEB) proposed use of this amount from the Health Insurance Claims Trust Fund to fund FY2022 Health Insurance. 3 Unallocated $ 500,000 $ 500,000 Set-aside for as yet to be identified FY2022 purposes. 4 Set-Aside in Case of State Aid $ 2,000,000 $ 2,000,000 In light of uncertain State Finances Reduction 5 Cash Capital $ 4,900,531 $ 4,900,531 6 Appropriate into Capital $ - $ 2,562,270 $ 2,562,270 To meet future capital/debt service needs. Stabilization Fund 7 Appropriate from Capital $ - $ - Proposed use of Capital Stabilization Fund to hold debt Stabilization Fund service increases to 5%annually. 8 Transition Free Cash out of $ - $ - 5-year plan to wean off Free Cash for Operating Budget Operating Budget -fiscal best practice 9 Street Improvement Program $ 2,651,674 $ 2,651,674 Consistent with long-term street maintenance plan. 10 Municipal Building Envelope $ 214,186 $ 214,186 Initially funded in 2006 override;increases by 2.5%per and Systems year. 11 Warrant Articles $ 15,000 $ 15,000 Senior Tax Work-Off 12 Support of Community Center $ 618,916 $ 618,916 Program(Transfer to Article 5) 13 Subtotal • i113292,522 r • 14 Revenue to Support $ - $ 2,200,000 $ 1,294,321 $ 3,494,321 Free Cash/General Stabilization to support the FY2021 Operating Budget operating budget. 15 Support for New Pension $ 400,000 $ 400,000 Funds incremental increases for Revised Pension Schedule Funding schedule 16 Retire Note for Land $ - $ 2,320,274 $ 2,320,274 To pay down notes issued for Pelham and Bedford St. Purchases-Debt Service over 5 years. 17 • Total • • • •• $1�2941321 $21,756,893 Revenue Executive Summary 5 November 5, 2020 O N O N O M LO M LO � O M � O M LO M 00 I` LO � 00 LO CO 00 Cfl � M N Cfl O LO Cfl Cfl N M C0 CO I` O � LO O (a L- 00 I` C� 't CO I` CO I� CO00 00 00 O 00 O I` +� CU CU Xm co }, LO M C O �O CO M I` O ,I- I LO LO LO LO Cfl CY cu -0 > � M I` O� 00 LO CO I` O C`) CO L) m 00 I` CM I` m N O � Q Q +� O E (6 N ti ti P ti CDN M CO M M LO I` Cfl O CO N M Z Z U) +� CU J 00 N LO N O Cfl I` CO 00 LO CO CD I,,-- Cfl LO j 'E > Q Cfl CO I` I` 00 M CA O N NM It It LO CO I` I` 00 O O O •� O Z V> 6�} 6c} 69} } 6�}60} V> V> 6(A- 69} V> 6�} 6�} 6� 6�} V> V> (A- 6F} V> 6�} 0-_0 X O O ti O LO N ' ti 't O � LO 't ti M "t 0) � M CO N C� C� Cfl Cfl ti Cfl LO CO I� C� �0) LO (fl 0) `� U �CO I` M N 0) 0) 00 CO � (3) LO V-- 00 LO M O I'*-- (� � (6 00 rl rl N O T- N U- N 00 I` O M V- Ni 00 Ni lqi Cfl Cfl Q Q O (1) Q N � M M Ln ti Cfl - LO Ln It LO I` _ M M Cfl Z Z N cu c N cU O 6o} 69- (g {f} 6t)- 6e} 6l)- 6F} 6C} 6c} 6!} 6g 6g {f} 6F} 6c} 6c} 69- {f} 09- 09- 1 }' O CU O 00 N O Lf) M N qqt O I� LO CO M LO � O M Mzl- N Q(� X � � 00 Ln � � O CO N CO CO CO 00 O � CO Nt N CO N LO � � O p E� M LO � 00 CD CO O ti CO O N CO CO O I` Ln LO CO ' (6 }, p N N m CO � N I` N CO C") N M � O CO O M I` CO M cr _ Q m 't 00 O M M 0) r CO LO N � CO I` � M M Ln CO CO I` CO O U 't I` M I` � 00 N I� O O Cfl I� I` O N CO N O M M O O � Q 00 N Ln (Ni T- O (6 � 00 'gi � 00 Ln M O I` Cfl CO I` Q E•— p co O ti ti 00 C) m O N N co Ln (9 ti ti 00 a) O r :t! 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SUGGESTED MOTION: FOLLOW-UP: DATE AND APPROXIMATE TIME ON AGENDA: 11/5/2020 7:25pm ATTACHMENTS: Description Type IGw'lu�lllllu ��� 0 O +Oo' m�' _,. .. �Iwlo�°1uG err a of �n � a �r,�fl rvu �, �� ,z, III� ��, n� "��� m Ilm "D, 1 II, 1P1+uu �� ■ O lilt, LM COS 'Idly r 01 ' 4,IF.u "I'l)l V � w r I I��III wo m° I ru"infl�h III"'"v MINIM/ CN ���a I N 00 ti 0o LO ti ti 0CL i O 0')0 LO Nt . 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U) U 0 E C: c� > a� Ic C: 4- to U co C: L) oii � VC:1� - gz � O � i � C: LL _ cn C �n C� _.. �--+ Q U O CM .C: CN a CN 01% O � � *OVA I L co •,v , CAI � O� LLN � Qqqc�m C: 1.0 >1 >, U IEEE= > � O � m ' O + O .- .- .- IM E E .EXI NG'F(- W •- •- 'cps k 11 1 (N E E E ol 'W­l 1 u CN AGENDA ITEM SUMMARY LEXINGTON BOARD OF SELECTMEN MEETING AGENDA ITEM TITLE: Establish Date: Summit III PRESENTER: ITEM NUMBER: Doug Luc ente, Select Board Chair I.3 SUMMARY: The proposed date for Summit III is Thursday, January 14, 2021. SUGGESTED MOTION: FOLLOW-UP: DATE AND APPROXIMATE TIME ON AGENDA: 11/5/2020 7:55pm