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Minutes
Town of Lexington Appropriation Committee
October 1, 2008
Place and time: Selectmen’s Meeting Room, 7:30 PM
Members present: John Bartenstein (Vice-Chair), Susan McLeish (Secretary), Deborah
Brown, Richard Eurich, Pam Hoffman, Mike Kennealy, Eric Michelson, Glenn Parker,
Rob Addelson (ex officio, non-voting)
This meeting was held in conjunction with the Board of Selectmen, School Committee,
and Capital Expenditures Committee, and was called to order at 7:30 PM.
The agenda items were:
1.Financial Condition Overview and Budget Projections;
2.Capital Summit – Town Manager’s Task Force
3.Special Town Meeting (November 17-19)
4.State Ballot – Question 1
5.Establish Date: Collaboration-Summit Meeting 2 (November 12 or 20); and
6.Executive Session: School Committee and Selectmen
Please see the attached minutes of the Board of Selectmen, which can also be found on
the Town web site at http://www.lexingtonma.gov/selectmenminutes.cfm or in the Town
Clerk’s office, for details.
The meeting was adjourned at approximately 9:00 PM.
Respectfully submitted,
John Bartenstein
Approved July 6, 2009
Budget Collaboration-Financial Summit 1
October 1, 2008
A joint meeting of the Board of Selectmen, School Committee and Finance Committees was
held on Wednesday, October 1, 2008, at 7:30 p.m. in the Selectmen Meeting Room, Town
Office Building. Present: Chairman Cohen, Mrs. Krieger, Mr. Kelley, Mr. Manz and Mr.
Burnell; Mr. Valente, Town Manager, Ms. Pease, Executive Clerk; Dr. Ash, Superintendent;
Ms. Dunn, Assistant Superintendent; all members of the School Committee; all members of
the Appropriation Committee, except Mr. Levine; and all members of the Capital
Expenditures Committee.
The purpose of the meeting was to evaluate the fiscal health of the Town through a series of
financial indicates and comparative benchmarks; to present a three-year projection of
revenues and expenditures and outline the FY2020 budget calendar and issues.
1. Financial Conditions Overview and Budget Projections
Key Financial Trends in Lexington. Mr. Valente presented the Town’s financial condition:
strong in tax collections, stable labor costs as a percentage of total operating costs, adequate
pension funding, revenues related to economic growth and low debt service; satisfactory in
the areas of revenue and expenses per household and level of reserves; and unsatisfactory in
the areas of state aid and employee liabilities.
Mr. Valente presented information on where Lexington stands financially. Detailed
information on the following indicators was presented:
1. State Aid
2. Revenues Related to Economic Growth
3. Personnel Costs
4. Employee Benefits
5. Debt Service
6. Reserves and Fund Balance
FY2010-2012 Revenue and Expenditure Projections. Mr. Addelson presented three-year
projections of revenues and expenses to facilitate discussion as the Town plans the FY2010
budget. The projections were based on maintaining the current level of services. The
projections show a shortfall of $1,247,154 in FY1010, $2,339,969 in FY2011 and $2,406,865
in FY2012. To the shortfall we have to add the variable cost drivers, which include a one
percent increase for municipal and school wages and new debt service.
Key assumptions include: Property Tax Levy (2.5 percent of property tax growth and new
growth of $1.9 million annually); State Aid (level funding); Local Receipts (historical
averages and elimination of PILOTS in FY2010); Available Funds ($2.620 million in free
cash applied in FY2010 and $2 million annually thereafter); Revenue Offsets (overlay at
$750,000 in FY2010 and FY2012, increasing to $925,000 in reevaluation year, level funded
$300,000 set aside for snow and ice deficit annually); Other Revenues (reduced water and
sewer indirects as per 6-year
Budget Collaboration-Financial Summit 1 – October 1, 2008
phase-down, growth in recreation benefit costs); Revenues set aside for non-recurring
expenses ($2.93 million in free cash to fund reserves - $350,000 for SPED, $840,000 for cash
capital, $450,000 for OPEB, $470,000 for FY2009 supplemental funding for energy bills,
and $820,000 for other unspecified needs).
Mr. Kanter requested that a cash capital policy be put in place.
Policy Issues Related to FY2010 Budget. Mr. Valente reviewed the FY2010 budget policies
issues:
1. The national economy/crisis in the financial markets – do not know what the impact
will be.
2. Potential 9C State Aid reductions for FY2009 – it is possible that the governor could
make adjustments to state aid. Do not think will affect FY2009, but need to watch.
3. Wages/Benefits (collective/coalition bargaining) – this is 76 percent of the budget and
needs to be discussed.
4. Use of one-time revenue sources to balance FY2010 budget – currently have robust
free cash. Will continue to analyze to make sure use of one-time revenue only for
non-recurring costs.
5. Potential debt exclusion (roads/intersections/sidewalks/traffic calming) – there are no
funds for major road work without a debt exclusion and Chapter 90 money has not
increased in years. Staff will provide options to Selectmen.
6. Energy Costs – in process of bidding for natural gas and electricity for next 3 years.
The Appropriation Committee provided recommendations on a financial strategy and
possible goals. For a long-term goal they suggest making changes to the Town’s economic
model to maximize the growth rate of our recurring revenue with minimal reliance on
operating overrides and to minimize the growth rate of recurring expenses. For a short-term
goal they suggest slowing the growth in health insurance expenses. Strategic imperatives to
achieve the goals include accelerating the growth in commercial tax revenues and other
revenue sources; slowing the growth in health insurance expenses; being circumspect about
the FY2010 operating budget and its effects on future operating budgets; maintaining,
developing or disposing of capital assets efficiently.
2. Capital Summit – Town Manager’s Task Force
Mr. Valente reviewed the report/recommendations on the Town Manager’s Task Force on
Capital Projects. They also provided a matrix of the available buildings and the space
available and building needs of each. The findings/recommendations are: 1) need to see the
results of the school master plan before going further; 2) request funding to conduct
feasibility of Munroe School; 3) defer the next phase of engineering/design for a
Senior/Community Center until the results of the School Master Plan and the Munroe
feasibility study are completed; 4) request a business plan from Munroe Center for the Arts;
5) prioritize building reuse; 6) defer issuing RFP for sale of Munroe until further discussion;
7) other concerns – replace fire alarm and sprinkler
Budget Collaboration-Financial Summit 1 – October 1, 2008
system at Munroe, remember needs of Supportive Adult Day Care Program and reevaluate a
multi-generational community center facility.
3. Special Town Meeting (November 17-19)
A corporate citizen of Lexington has asked that the Town have a Special Town Meeting to
take up a rezoning issue that would allow expansion for a tenant who will move elsewhere if
not able to expand. The Selectmen will decide on October 6 whether to have a Special Town
Meeting. Other possible articles would be tweaks to the current fiscal budget, a Munroe
study, and two land acquisition articles that were postponed at the 2008 Annual Town
Meeting that would be funded by Community Preservation Act money.
Mr. Kanter will request an article to make minor administrative changes to the way CEC
reports.
4. State Ballot – Question 1
The Board of Selectmen, School Committee, Appropriation Committee and Capital
Expenditures Committee went on record as being strongly opposed to Question 1, which
would repeal the state income tax.
5. Establish Date: Collaboration-Summit Meeting 2
The next Collaboration-Summit meeting will be held on November 12, 2008 at 7:30 p.m.
6. Executive Session: School Committee and Selectmen
Upon motion duly made and seconded, it was voted 5-0 by roll call vote to go into executive
session for a matter of litigation, with no intent to return to open session.
Upon motion duly made and seconded, it was voted to adjourn at 9:00 p.m.
A true record; Attest:
Lynne A. Pease
Executive Clerk