HomeMy WebLinkAbout2008 AC RptAPPROPRIATION COMMITTEE
TOWN OF LEXINGTON
REPORT TO THE
2008 ANNUAL TOWN MEETING
Released March 19, 2008
Appropriation Committee Members — Fiscal Year 2008
Alan M. Levine Chair • Deborah Brown Vice Chair • John Bartenstein Secretary
Robert N. Addelson (ex- officio; non - voting) • Rod Cole (to December 2007) • Richard Enrich
Pam Hoffman • Michael J. Kennealy • Susan McLeish • Eric Michelson
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Summary of Warrant Article Recommendations
Abbreviations: GF = General Fund; EF = Enterprise Fund; RF = Revolving Fund
FC = Free Cash; CPA = Community Preservation Act Fund
An entry of "Indefinitely Postpone" in the right -hand column merely signifies our expectation.
Ar-
Funds Requested
Funding
Committee
ticle
Title
Source
Recommendation
4
Appropriate FY2009
$134,539,985
GF + others
Approve (8 -0)
Operating Budget
Appropriate FY2009
5
Enterprise Funds
$15,269,904
EF
Approve (8 -0)
Budgets
6
Appropriate for Senior
$45,000
GF
Approve (8 -0)
Service Program
7
Appropriate for Street
$24,000
Disapprove (0-8)
Trees
Continue and Approve
8
Departmental Revolving
$2,010,000
RF
Approve (8 -0)
Funds
Appropriate the FY2009
$2,978,886
Community Preservation
CPA
Approve (8 -0)
9
Committee Operating
$3,052,886
except (a) (1 -6 -1)
Budget and for CPA
$75,000
(q) pending
Projects
GF
10
Land Purchase — Off
none at press time
Marrett Road
11
Land Purchase — Off
none at press time
Hartwell Avenue
12
Land Purchase — Off
none at press time
Lowell Street
Land Purchase — Off
13
Cedar Street and Off
none at press time
Hartwell Avenue
Appropriate for
14
Recreation Capital
$177,000
GF
Approve (8 -0)
Projects
Appropriate for
$3 ,410,350 +
GF
Approve (8 -0)
15
Municipal Capital
Chapter 90
Projects and Equipment
amount TBA
EF
except (d) pending
Page 2 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Ar-
Title
Funds Requested
Funding
Committee
ticle
Source
Recommendation
Appropriate for Water
16
Distribution
$1,800,000
EF
Approve (8 -0)
Improvements
17
Appropriate for Sewer
$1,300,000
EF
Approve (8 -0)
Improvements
Appropriate for School
18
Capital Projects and
$835,000
GF
Approve (8 -0)
Equipment
Appropriate for Public
Approve (8 -0)
19
Facilities Capital
$2,188,750
GF
Except (j) & (1)
Projects
pending
Appropriate for
20
Affordable Housing
$50,000
FC
Approve (8 -0)
Purposes
Appropriate Money –
21
Laconia Street (Citizens'
$3,650
GF
Pending
Petition)
22
Appropriate for Post
$400,000
FC
Approve (8 -0)
Employment Benefits
23
Rescind Prior Borrowing
none at press time
Authorizations
Establish and
24
Appropriate to Specified
$415,093
See text
Approve (8 -0)
Stabilization Funds
25
Appropriate to
$1,000,000
FC
Approve (8 -0)
Stabilization Fund
26
Appropriate for Prior
none at press time
Years' Unpaid Bills
27
Amend FY2008
$750
TBD
pending
Operating Budget
Appropriate for
28
Authorized Capital
$60,000
FC
Approve (8 -0)
Improvements
29
Use of Funds to Reduce
none at press time
the Tax Rate
32
Amend General Bylaw –
none
n/a
Approve (8 -0)
Abatement of Interest
Amend General Bylaw –
33
Terms for Certain
none
n/a
Approve (8 -0)
Contracts
37
Amend Tree Bylaw
none
n/a
Approve (7 -1)
Page 3 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Ar-
ticle
Title
Funds Requested
Funding
Source
Committee
Recommendation
Reconfirm Votes
44
Petitioning the General
none
n/a
Approve (8 -0)
Court
48
Munroe School
none at press time
Disposition
Page 4 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Contents
Summary of Warrant Article Recommendations ........................................................... ..............................2
Introduction ......................................................................................................................... ..............................7
Warrant Article Analysis and Recommendations .........................................................
.............................12
Article 4: Appropriate FY2008 Operating Budget ............................................ .............................12
Article 15:
LexingtonPublic Schools ........................................................................... .............................12
Minuteman Regional High School ............................................................. .............................15
Appropriate for Water Distribution Improvements ......................... .............................34
SharedExpenses ......................................................................................... .............................17
Article 17:
Article 5: Appropriate FY2008 Enterprise Funds Budgets ............................... .............................19
Article 6: Appropriate for Senior Service Program .......................................... .............................24
Appropriate for School Capital Projects and Equipment ................ .............................38
Article 7: Appropriate for Street Trees ............................................................. .............................25
Article 19:
Article 8: Continue and Approve Departmental Revolving Funds ................... .............................26
Article 9: Appropriate the FY2008 Community Preservation Committee Operating
Budget and for CPA
Projects .............................................................................................................. .............................28
Article 21:
Article 10: Land Purchase —Off Marrett Road ................................................. .............................32
Article 11: Land Purchase —Off Hartwell Avenue ........................................... .............................32
Appropriate for Post Employment Benefits .................................... .............................41
Article 12: Land Purchase —Off Lowell Street ................................................. .............................32
Article 23:
Article 13: Land Purchase —Off Cedar Street and Off Hartwell Avenue ......... .............................32
Article 14:
Appropriate for Recreation Capital Projects ................................... .............................32
Article 15:
Appropriate for Municipal Capital Projects and Equipment ........... .............................33
Article 16:
Appropriate for Water Distribution Improvements ......................... .............................34
Article 17:
Appropriate for Sewer Improvements ............................................. .............................36
Article 18:
Appropriate for School Capital Projects and Equipment ................ .............................38
Article 19:
Appropriate for Public Facilities Capital Projects .......................... .............................39
Article 20:
Appropriate for Affordable Housing Purposes ............................... .............................40
Article 21:
Appropriate Money - Laconia Street (Citizens Article) .................... .............................41
Article 22:
Appropriate for Post Employment Benefits .................................... .............................41
Article 23:
Rescind Prior Borrowing Authorizations ........................................ .............................42
Article 24:
Appropriate to Specified Stabilization Funds ................................. .............................42
Article 25:
Appropriate for Stabilization Fund ................................................. .............................43
Article 26:
Appropriate for Prior Years' Unpaid Bills ...................................... .............................43
Article 27:
Amend FY2008 Operating Budget ................................................. .............................43
Article 28:
Appropriate for Authorized Capital Improvements ........................ .............................44
Article 29:
Use of Funds to Reduce the Tax Rate ............................................. .............................45
Article 32:
Amend General Bylaw– Abatement of Interest ............................. .............................45
Article 33:
Amend General Bylaw – Terms for Certain Contracts ................... .............................45
Article 37:
Amend Tree Bylaw (Citizens' Petition) .......................................... .............................46
Article 44:
Reconfirm Votes Petitioning the General Court ............................. .............................46
Article 48:
Munroe School Disposition ............................................................ .............................47
APPENDIX A: 3 -Year Budget Projection
Page 5 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Preface
Every year presents a new challenge in regard to producing a report to Town Meeting. This year the
budget calendar was revised to achieve a very worthy goal, i.e., to conclude Town Meeting action on the
operating budget as early as possible. This is intended to become an annual practice so that, in years
when positions in the Schools are at risk in an override referendum and the proposed tax increase receives
approval from the voters, the Schools can make offers to fill those positions earlier than has been the case
in previous override years. The financial articles are currently scheduled to be taken up on March 24.
Since the Warrant was not released until early February and the budget to be presented to Town Meeting
was not finalized until February 13, this did not give us a lot of time to prepare our report. Nonetheless,
we have made our best effort; we hope you find this report informative.
This report is primarily intended to document our recommendations; we do not always attempt to present
information that is already easily available to Town Meeting members. In particular, the Town Manager
and staff have given an excellent overview of the estimated revenues and proposed expenditures for
FY2009 in the "FY2009 Recommended Budget & Financing Plan," dated February 22, 2008 (the `Brown
Book ") which has been distributed to all Town Meeting members and is available online at
http:// ci .lexington.rrkt.us/TownManager /Bud e�getrecommended09.htm The recommended
Lexington Public Schools budget is available online at http: / /lps.lexingtonrna.org . Overviews from the
Town Manager and Superintendent, as well as many details on the nuts and bolts aspects of the budget,
may be found in these materials. In addition, the Brown Book summarizes relevant budget laws and
bylaws (see Appendix B therein) and includes a glossary of financial terms (in Appendix D therein). The
"TMMA Warrant Information Report" (March 2008) is also an important reference for this Town
Meeting and the forthcoming report of the Capital Expenditures Committee (CEC) is essential.
Continuing a useful practice, this year we participated with the Board of Selectmen, School Committee,
and CEC in five budget collaboration/summit meetings. These meetings were excellent opportunities to
discuss the most salient budget issues and for us to give preliminary advice to the members of the other
boards and committees.
It has again been a pleasure to work with Town Manager Carl Valente, Assistant Town Manager for
Finance Rob Addelson, Budget Officer Michael Young Superintendent of Schools Dr. Paul Ash, and
Assistant Superintendent for Finance and Operations MaryEllen Dunn, the Board of Selectmen, the
School Committee, the CEC, and the Community Preservation Committee (CPC). We also thank the
many other municipal and school staff, Town officials, and citizens who have contributed to our work in a
wide variety of ways.
' The recommendations herein are those of the eight members as of March 1, 2008.
Page 6 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Introduction
In this Introduction, we give an overview of financial developments since the 2007 Annual Town
Meeting, the proposed FY2009 budget, the current status of the Town's financial reserves, and the
financial outlook for FY2010 and beyond. In the following sections, we provide our analysis and
recommendations on individual articles. Finally, the Appendix presents our projections of the Town's
finances in future years. The "Report of the Town Manager" in the FY2009 Brown Book (see link in the
Preface) is useful to read before this Introduction.
Developments since adoption of the FY2008 budget
The approval of both the operating override to cover increased school expenses and the debt exclusion for
the new DPW facility last June set the stage for a fiscal year that has, perhaps, presented lesser financial
difficulties than those we have faced in many recent years. The success of the override allowed the
schools to avoid severe personnel and program cuts; indeed, a number of people had to be hired following
the successful approval and this proved to be difficult to accomplish satisfactorily so late in the hiring
season. After the success of the debt exclusion for the new DPW facility, a bid was accepted at a
favorable price. The DPW vacated the old facility around the end of October. It was demolished over the
next few months, and construction of the new facility is under way. The approval of the override and the
debt exclusion has created surpluses in the unemployment compensation and debt services parts of the
budget. These funds will not need to be used for their stated purposes in FY2008, because the success of
the override precluded a number of layoffs and the debt exclusion covers the debt service on funds
previously appropriated and borrowed for DPW facility planning and design work.
At the Special Town Meeting in October 2007, the Town Meeting approved a Tax Increment Financing
(TIF) agreement with Shire HGT, a division of a pharmaceutical company. Shire recently announced that
it is proceeding with its proposed development in Lexington since it has received assurances that it can
count on State legislation that will allow Shire to receive certain State incentives. The Special Town
Meeting also made minor revenue and expense adjustments to the FY2008 operating budget, made minor
adjustments to the water and sewer enterprise fund budgets, and approved a resolution in regard to
legislation enabling the formation of new municipal electric utilities. Please see the Appropriation
Committee report to the Special Town Meeting for further details (this report and others are available at
http:// ci. lexington. ma .us /townmeeting /townmeeting.htm or http: / /www.lexingtontmma.orR - click on
"Documents ").
In the fall, the State certified Lexington's Free Cash at the healthy amount of $4,861,516. There was no
need to use any of this Free Cash at the fall Special Town Meeting, e.g., to cover a deficit from FY 2007
snow and ice removal expenses, for unpaid bills for which no funds were encumbered, or, indeed, for any
FY 2008 deficits.
New growth for FY2008 was certified at $2,485,650; the appropriated FY2008 budget assumed it would
be $1,600,000.
The Lexington Public Schools ended FY2007 with a surplus of $464,049. While this surplus only came
after and is smaller than the sum of the supplementary appropriations at both the fall 2006 Special Town
Meeting No. 1 and at the spring 2007 Annual Town Meeting, it is nevertheless a positive development.
There were also surpluses in Shared Expenses ($885,137) and the municipal part of the budget
($617,456). These surpluses became part of the current certified Free Cash balance.
In contrast to the last few years, the School Superintendent and Assistant Superintendent for Business and
Finance are not projecting that any supplementary appropriations will be needed this spring. Rather, they
are confidently projecting that the Lexington Public Schools will finish the year with a sizable surplus. In
January, the best estimate projected a surplus of as much as $1.7M though it was noted that five or six
months is ample time for costs to unexpectedly increase, e.g., if additional students need out -of- district
Page 7 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
placements. This has led to a plan in which the FY2008 operating budget will be revised downward by
$350,000 and the "proceeds" transferred to the proposed Special Education Stabilization Fund under
Article 24. We understand that the surplus is due to four main factors: 1) the new in -house special
education programs, including those aimed at students suffering from autism - spectrum disorders,
attracted more students than projected last spring, reducing the number of required expensive out -of-
district placements; 2) more staff retired or otherwise left and were replaced by more junior people at
lower salaries; 3) more positions than usual became vacant and have taken or are taking a long time to
fill; and 4) energy costs were lower than projected. The magnitude of the currently- projected surplus
gives us confidence that some funds will remain unspent and flow to Free Cash next fall and thereby be
available to support the FY2010 budget or other financial needs.
We should hardly need to state that as of early March, snow removal has already cost the Town about
$1.34M which is far in excess of the budgeted amount of $610K by about $730K. A snow removal
budget update will be presented at Town Meeting. As noted above, there will be unexpended balances in
the unemployment compensation and debt service parts of the budget that toad approximately $400,000 at
the end of FY2008. Under Article 27, the unexpended balances will be transferred to other budget lines
to help cover any FY2008 deficits including that for snow removal. The remaining snow removal deficit
will be covered at the end of the fiscal year by other unexpended balances in the FY2008 budget, in the
fall by the $300K in revenue offsets that were built into the budget for that specific purpose, and, also in
the fall, by unprojected revenue increases or by the use of Free Cash.
Of the $469,868 put into the Reserve Fund this year ($19,868 was added at the fall Special Town Meeting
to the original appropriation of $450,000), $100,000 has already been transferred out to cover legal
expenses related to collective bargaining and employee grievances. It is anticipated that an additional
amount will also be needed to cover associated legal expenses.
At the Fall 2006 Special Town Meeting No. 1 and at the 2007 Annual Town Meeting, articles were
approved that enabled the school and municipal facilities efforts to be combined into a single Public
Facilities Department. The Department has now been created but (in FY2008) facilities expenses are still
budgeted in multiple line items. For FY 2009 the relevant budgetary items have been collected and will
be presented as a Department budget line (line item 2400).
Prompted by an alert Town Meeting Member, this winter we asked the Assistant Town Manager for
Finance about the Town's exposure to investment losses in the wake of the sub -prime mortgage crisis.
We were assured that the Town is prevented by law from investing its operating money and reserves in
risky investments such as those with the greatest exposure. The Pension Board is not subject to the same
legal restrictions but has reviewed its portfolio and confirmed that it has no direct exposure (other than the
effect on the market generally) resulting from the sub -prime crisis. Of course, some of the Town's and the
Pension Board's investments may be indirectly affected by this crisis, especially as the stock market as a
whole is affected.
FY2009
The budget to be presented to Town Meeting is the first in some years that does not depend on the
approval of an override, but this does not imply that overrides will not be needed to support future
budgets, since expenses continue to grow faster than revenues.
The budget depends on the levels of estimated revenues. While the lion's share of the latter, i.e., the
revenues from the property tax and available funds, are definite, the amounts of state aid and local
receipts that will be received are uncertain to some degree. New growth, i.e., the property tax on newly
constructed buildings and new commercial equipment, is estimated at $1,681,000. Part of the new growth
revenue, i.e., $300,000, is earmarked to be applied to any snow removal deficit remaining from FY2008;
this amount is carried in the budget as a revenue offset. The recommended budget assumes that the Town
will receive State aid totaling $9,670,275 which is less than what the Governor has proposed by
approximately the amount that the Governor's proposal assumes would be raised from new gaming
Page 8 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
sources (casinos) in place of lottery proceeds. If the Town ultimately receives more than this, as indicated
by recent actions of the State legislature, all or part of the additional amount may be needed to help cover
the FY2008 snow removal deficit.
In his "Report of the Town Manager" the Town Manager gives a good description of the development of
the recommended budget. Among other parts of the process, he tells about the allocation of "new"
revenue to the schools and municipal budgets in a 71.5/28.5 ratio. One comment is in order. This has now
been the practice for two or three years in a row, and should continue to be regarded as a starting point for
discussions and not as an inviolable end point. Indeed, if Town officials find that circumstances demand
that the new revenue be allocated in a different way, e.g., because of differing priorities of unfunded
programs, then the revenue allocation should be adjusted accordingly.
The newly created Department of Public Facilities that combines the maintenance of all the school and
municipal buildings is now largely funded through a single line in the operating budget (2400). Please
see the relevant section in the Brown Book and the discussion herein under Article 4.
The Minuteman Regional High School assessment has increased 25% since last year and 70% since FY
2007, due principally to an increase in the number of Lexington students at the school together with a
decrease in the overall school enrollment. This year's increase is examined herein under Article 4.
The Town Manager, with the support of the Board of Selectmen, has recommended the use of $2,618,766
of Free Cash for FY2009 operating expenses. In addition, the recommended budget includes the use of
$842,000 to support the recommended capital expenditures (in Articles 9, 14, 15, 18, 19, and 28), the
transfer of $1,000,000 from Free Cash to the Stabilization Fund, and the transfer of $400,000 from Free
Cash to the Post - Employment Insurance Liability Fund.
The transfer to the Stabilization Fund has no material effect upon the Town's fiscal condition because,
from a reserves - balance perspective, the differences between Free Cash and a Stabilization Fund are
minimal. Two of the procedural differences are: (1) Free cash is not available during the annual
certification process from July 1 until the Town is notified by the Commonwealth of the certified value,
whereas the Stabilization Fund provides a continuously available reserve with a definite value; and
(2) The appropriation of funds from Free Cash requires a simple majority vote whereas that from the
Stabilization Fund requires a 2/3 majority.
The transfer of $400,000 to the Post - Employment Insurance Liability Fund includes about $300,000 that
was received in FY2007 from reimbursements for Medicare Part D expenses of the Town's retirees. This
Fund is the account set up within the last few years under State law to enable the Town to save funds to
help cover its liability for future health insurance costs of retired employees. The liability is currently
roughly of the magnitude of $100,000,000. The Town has been and is paying for current -year retiree
health insurance liabilities through the health insurance line in the Shared Expenses section of the
operating budget. Whether the Town really should change its current practice and start prefunding the
liability is debatable; there is currently no compulsion to fund the future liabilities. Achievement of full
funding over, e.g., 30 years would require putting perhaps $7M plus or minus a million or two into the
Fund annually. Needless to say, this would have a huge impact on annual budgets until full funding is
reached. The modest amount proposed is a sensible way to start building this fund. See the discussion
under Article 22 below for further information.
As noted above, the recommended budget includes the transfer of $350,000 from the FY2008 school
budget surplus to the proposed Special Education Stabilization Fund.
These changes to Free Cash, the Stabilization Funds, and the Post- Employment Insurance Liability Fund
are summarized in Tables 14.
Page 9 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Table 1: Anticipated Free Cash Changes-2008 AnnnaI Town Meeting
Certified Free Cash, July 1, 2007
$4,861,516
Less use for FY2008 (Article 27)
($750)
Less use for operating budget (Article 4)
($2,618,766)
Less use for capital (Arts. 9, 14, 15, 18, 19, 28)
($842,000)
Less transfer to Post-Employment Fund (Article 22)
($400,000)
Less transfer to Stabilization Fund (Article 25)
($1,000,000)
Remaining balance at end of Town Meeting$0
Table 2: Anticipated Stabilization Fund Changes
Balance July 1, 2007
$5,461,674
Balance December 31, 2007
$5,571,158
Transfer in (Article 25)
$1,000,000
Approx. projected balance July 1, 2008*
$6,655,000
*Assumes an interest rate of 3.0 %for January through June 2008
Table 3: Anticipated SPED Stabilization Fund Changes
Balance July 1, 2007
$0
Transfer in (Article 24)
$350,000
Pro balance July 1, 2008
$350,000
Table 4: Anticipated Post - Employment Insurance Liability Fund
Changes
Balance July 1, 2007
$0
Transfer in (Article 22)
$400,000
Pro balance July 1, 2008
$400,000
A question has been raised about whether it would be acceptable to use a larger amount of Free Cash to
support the operating budget rather than build reserves or to use more of the anticipated FY2008 school
budget surplus to support the operating budget. The recommended FY2009 operating budget is to be
supported by an amount of what may reasonably be considered to be nonrecurring sources of funds that
borders on a level that makes this Committee uncomfortable – thus we do not recommend further
increases in the operating budget.
A few years ago, the Town's financial reserves policies changed following the receipt of a "negative
outlook" note with respect to the Town's Aaa bond rating. In particular, the Selectmen's Ad Hoc
Financial Policy Committee recommended that reserves be built up for a number of purposes. This
Committee generally concurred with those recommendations and continues to support reserves growth.
Therefore, we are pleased to see the recommendations for this Town Meeting in regard to reserves
represented by the transfers to the Stabilization Funds and the Post - Employment Insurance Liability
Fund, by the continuation and development of revolving funds, and by the increase in the appropriation
for the Reserve Fund. The growth in reserves puts the Town in a better position to cope with State aid or
local receipts decreases from an economic downturn, with occasional unexpected increases in SPED
costs, or with other short -term financial problems.
In the Brown Book, the Town Manager notes that the recommended FY2009 budget includes about $14M
for capital expenditures which is about $2.5M more than was appropriated in FY2008. The proposed
amount of General Fund cash is roughly double that in the FY2008 budget. The proposed total General
Fund expenditures for capital, i.e., both cash and debt, exceed $7M (see page XI -3 in the Brown Book);
this is more than 5% of the total General Fund revenues (about $131M; see page II -1 in the Brown Book).
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
We are gratified to see that the Schools and the Public Facilities Department are planning to conduct
studies of facilities needs (see Articles 18 and 19). This is important for the accuracy of projections of
future needs for capital investments. Such studies should be extended in future years to other aspects of
the Town's facilities and equipment. We also note that this Committee strongly supports the use of
Community Preservation Act (CPA) funds to maintain Town buildings and facilities to the extent that the
proposed projects qualify for CPA funds and make sense.
FY2010 and bevond
Our projection of expenses and revenues in FY2010 is presented in the Appendix. It shows that the
maintenance of the current level of services will likely cost some millions more than the revenues that
will be available. We have not quantified the uncertainties in the growth of each of the major components
of expenses and revenues. Indeed, recent experience teaches us that it is difficult to predict the size of a
budget gap more than a year in advance with a precision of better than $1M or even $2M. Nonetheless,
the lesson is that we should be wary of letting operating costs grow too fast. In the spirit of this lesson,
concern about the sustainability of increases in the operating budget was expressed by members of this
Committee during the budget development this year. We wonder whether a similar amount of Free Cash
and other non - recurring sources of funds can be expected to be available to support the FY2010 operating
budget as is being used for FY2009. The amount recommended to be used this year, i.e., just over $2.6M,
is large enough that there are real risks that a similar amount may not be available in FY2010, especially
in light of the current economic slowdown.
Continuation of the street reconstruction and resurfacing program at the FY2009 level will not meet the
Town's long -term needs (and possibly even the short -term needs) for street and sidewalk maintenance
and new sidewalk construction. Rather, the Town will need to approve a debt exclusion or override in
order to keep up; the DPW has floated a preliminary figure of $15M to cover eight years of street
maintenance work. A debt exclusion for street paving could also cover the $700K General Fund debt
financing proposed this year for the reconstruction of Woburn St. The precise parameters of a
supplemental street maintenance program should become a topic of conversation starting late this spring
or this summer. Sidewalk work should be part of the discussion.
Among the other factors affecting FY2010, we need to keep in mind that the in -levy debt service for that
year will be about $500K higher than it is in FY2009 (see page XI -3 in the Brown Book). The estimate
for FY2010 debt service was done prior to the recent (February) issuance of about $20M in bonds
wherein the Town, with the help of its Aaa rating, received a very favorable interest rate of 3.75 %.
Nonetheless, the debt service in FY2010 will still increase significantly.
A three year perspective here might be valuable. If one compares the FY2009 budget to FY2006, one
would see that, factoring out the successful override for FY2008, the town's principal and recurring
sources of revenue (tax levy, state aid, and local receipts) grew at 3.8% while general fund expenses grew
at 7.8 %. Assuming that the town does not desire to see major cuts in services nor build budgets
predicated on non - recurring revenues, and projecting into the future this 4% difference between expense
growth and revenue growth, one inevitably is led to the conclusion that future budgets can only be
balanced through (1) passing operating overrides; (2) finding significant new sources of revenue, and/or
(3) finding ways to deliver services at lower cost. Initiatives such as the agreement with Shire and the
new programs in our schools to reduce special education expenses are examples of the latter two methods,
respectively, and should be applauded. Given the large increases in the Town's expenses for health
insurance over the last ten years, initiatives in that area should be considered. However, as has been
stated many times, such initiatives need to be approved by the Town's collective bargaining units in order
to be put into effect. The Town will probably need to consider any and all options as we approach
FY2010 and/or later fiscal years where expenses may exceed available revenues by millions of dollars.
We hope that the projections in the Appendix and this discussion will promote a multi -year view as each
of the specific financial articles is acted upon at this Town Meeting.
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Warrant Article Analysis and Recommendations
Article 4: Appropriate
Funds Requested
Funding
Committee
FY2008 Operating
Requested
Source
Recommendation
Lexington Public Schools
$64,548,189
GF
Budget
GF +others
Approve (8 -0)
Description
Amount
Funding
Committee Recommends
Requested
Source
Lexington Public Schools
$64,548,189
GF
Approve (8 -0)
Overview
As stated in the introduction to this Report, the FY2008 budget for the Lexington Public Schools will
result in a surplus at the end of the fiscal year. This is due to a number of factors that are described in the
document "2n Quarter Financial Report for Fiscal year 2008 – Operating Budget." It can be found on -line
at http: / /Ips.lexingtonrrkt.org /.
Therefore, the FY2008 appropriated school budget was not used as the base for the FY2009 budget.
Instead, the School Administration built the FY2009 budget starting with the actual experience as of the
date the budget was formulated in terms of the number of employees and their salaries and wages, actual
Special Education expenses including out -of- district tuition and transportation costs, and other expenses
and revenues. The accounts that were over - estimated for FY2008 and are therefore contributing to the
surplus have, in effect, been adjusted downward in the FY2009 budget.
In the past, the school budget included the school crossing guard positions that have now been transferred
to the Law Enforcement line (4170) in the municipal budget. In addition, the salaries & wages and
expenses associated with maintaining school facilities have been moved to the Department of Public
Facilities (DPF) budget line (2400) within Shared Expenses. The FY2008 budget has been restated to
$61,335,221 to reflect these changes and allow for an accurate comparison with the FY2009 budget
request of $64,548,189.
Since the crossing guards (headcount 18) and school facility employees (60 FTEs) have been transferred
out of the school budget and into other accounts, the restated number of school employee FTEs for
FY2008 is 851.35. The FY2009 school budget request adds 20.28 net FTEs, resulting in a toad of 871.63
FTEs in the coming year. For details of the FTE's refer to the forthcoming document "Fiscal Year 2009
School Committee Recommended Budget" dated March 19, 2008.
Please refer to pages III -2 through III -9 in the Brown Book for current and background information about
the FY2009 school budget along with comparisons to a restated FY2008 budget.
Enrollment has shown a modest decline across all grades from 6,195 actual students as of October 1, 2007
to 6,092 projected for FY2009.
Page 12 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Grades
FY2008 Actual
(as of 10/01/07)
FY2009
Projected
Change
% Change
K-5
2,649
2,592
-57
-2.15
6-8
1,552
1,501
-51
-3.29
9-12
1,994
1,999
+5
+0.25
Total
6,195
6,092
-103
-1.66
The original FY2008 budget projected that 30 students in grades K – 5 would come from Avalon at
Lexington Hills, the partially complete new development at the former Metropolitan State Hospital Site.
However, as of November 1, 2007, less than half that number of students had materialized in those
grades. Enrollment projections for FY2009 and beyond, when the new development will be fully
occupied, have now been revised downwards.
Grades
Avalon Bay
FY2008 Actual
Students
(as of 11/01/07)
Projected
Student Count on
Completion of
Avalon Ba
K -5
14
23
6 -8
5
9
9 -12
6
9
Toad
25
41
The School Administration, with the support of the School Committee, has created a proposal for full day
kindergarten in Lexington that would be funded by a Department of Education kindergarten
implementation grant, some money from the town's annual METCO Grant, and fees to be paid by
parents. The operating budget could be impacted by the financial assistance program, which School staff
estimate will likely not exceed $30,000. However, the actual impact on the FY2009 budget, if any,
cannot be known until the program is implemented and the number of families requiring financial
assistance is determined.
In an ongoing effort to track the volatile special education out -of- district tuition and transportation costs
and minimize their impact on the rest of the school budget, the School Committee met with the
Burlington School Committee and Board of Selectmen to understand their budgeting technique of
carrying these costs as a line item separate from the rest of the school budget. While this seemed viable
in theory, the `Burlington Plan" was not adopted because of questions about the legality of a separate line
item for school expenditures. Per request of the School Committee, however, the School Administration
has delivered a new report that reflects the school budgets for in- district and out -of- district program
expenses separately. (See below for more information about Special Education expenses.)
Special Education Expenses
Because Special Education expenses are such a significant and challenging part of the school budget, we
have elected to discuss these expenses in a separate section. This section deals in particular with three
elements of the Special Education budget – out -of- district tuitions, transportation, and new programs.
Out -of- district tuitions
When the Town is unable to meet the needs of a Special Education student within the Lexington Public
School system, State law requires that the student be sent to a program outside of Lexington to receive
services and the Town must pay for these services. Tuition for students requiring out -of- district services
is projected to increase by $226,977 in FY2009 compared to the FY2008 budget, an increase of 4.6 %, net
of reimbursement received under the circuit breaker program (discussed below). Since the budgeted
Page 13 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
number of students is less than the original budget for FY2008, the budgeted increase in spending is the
result of an assumed 5% inflation rate in tuition expenses for this student population as well as expense
increases incurred when students change from one form of out -of- district school to another (usually more
expensive) school. The FY2009 projection takes into account students currently in an out -of- district
placement that are assumed to also start the FY2009 year out of district as well as an assumption about
new out -of- district placements. The budget assumes that the number of out -of- district students in
FY2009 will be less than the number recorded in January 2008, as the school administration expects that
the in -house programs described below will continue to result in fewer students going out -of- district and
some returning into the district.
Out -of- district
FY2008
FY2008
FY2009
% Increase
budget
budget
estimate
budget
FY2008
Jan -9 -08
budget -
FY2009
budget
Total # students
111
107
100
-9.9%
Total cost
$6,912,198
$6,074,464
$6,988,951
+1.1%
Circuit breaker
$1,954,739
$2,047,607
$1,804,515
-7.7%
Net cost to town
$4,957,459
$4,026,857
$5,184,436
+4.6%
Annually, the State reimburses Lexington for some of the costs associated with out -of- district placements
- in other words, the assumed circuit breaker revenue in the FY2009 budget represents reimbursement of
expenses incurred in FY2008, for which the Town will submit a claim in July 2008. The State will
reimburse Lexington for 72 - 75% of the costs incurred above approximately $35,684 for each child
placed out -of- district; transportation, however, is not currently eligible for reimbursement. The State
allocates up to 75% if the claims do not exceed the State budget for such claims. The FY2009 budget
assumes reimbursement of 72 %.
Transportation
Expenses for transportation of Special Education students are projected to increase by 19.3% to
$1,252,602 in FY2009, from the FY2008 budgeted amount of $1,050,179.. The budgeted increase is the
result of an anticipated increase in the number of both in- district and out -of- district students who will
require transportation from 151 in the FY2008 budget to an assumed 168 in FY2009, inflation in the cost
of transportation, plus assumptions about the nature of the transportation required for each student. Some
students have changed from residential to day placements, for example, resulting in lower tuition costs
but more frequent transportation requirements (daily vs. weekly).
New programs
As reported last year, the school administration initiated or expanded new programs in FY2008 aimed at
increasing the ability of the schools to educate students within the system and therefore mitigate the
increase in out -of- district expenses. An Intensive Learning Program (ILP) to serve students with autism
was planned for each of the middle school and high school levels, while a third program, a
Multidisciplinary Support Team (MST) for students identified as having emotional disabilities, was
planned at the high school level. Students with these disabilities account for the majority of the out -of-
district expenses, and the school administration projected that these programs would prevent a number of
out -of- district placements in the future as well as bring students currently placed out -of- district back in-
district. The programs were projected to cost $511,147 and result in savings of $1,376,454 million, for a
net savings of $865,307 in the first year of the programs.
Page 14 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
In FY2008, however, the school administration (1) expanded the three programs mentioned above, (2)
launched a new middle school Developmental Learning Program (DLP), and (3) expanded a high school
Language Learning Program (LLP). These five programs combined are now projected to cost $796,724
in FY2008 while saving $2,611,359, for a net savings of $1,814,635. This savings is $949,328 more than
originally projected.
The Committee unanimously (8 -0) supports this request.
Description
Amount
Funding
Committee Recommends
Requested
Source
Minuteman Regional High
$1,510,598
GF
Approve (8-0)
School
Over the last three years there has been significant annual growth in the Minuteman Regional High
School (MRHS) assessment. The FY2007 growth was 15 %, the FY2008 growth was 18% and the
FY2009 growth is 26 %. The growth is due to increases in the number of Lexington students attending
MRHS and to decreases in the overall in- district and out -of- district student populations. It is not due to
extraordinary growth in the district's expenditures.
Enrollment figures as of October 1, 2007 (in the 2007 -2008 school year) are used for the FY2009 school
year (2008 -2009) assessments. On that date there were 648 full -time students, a decrease of 45 students
(- 6.5 %). The school served a total of 847 full -time equivalent (FTE) full and part -time students, down
from 882 FTEs (4%). The school population is roughly 65% from in- district towns and 34% from out -of-
district towns. There are no "Choice" students attending. In- district enrollment decreased by 24 students
(- 5.4 %). Out -of- district enrollment levels decreased by 21 students (- 8.5 %). Special Education students
comprise 40.7% of the FTE enrollment.
The MRHS School Committee has accepted a budget for FY2009 of $17,446,884. This year the costs of
the Middle School Literacy program are being directly charged to the five participating communities
(Lexington is not one), leaving an operating budget of $17,001,622 (a $255,853 or 1.5% budget increase
over current year). Last year's increase was 3.8 %.
Salaries, which make up 61% of the budget, decreased $142,010 (- 1.3 %). Due to reduced enrollment, the
school has reduced academic staff by 4.5 FTEs, yet in response to higher Special Education demands,
academic competency reporting, and mandated student occupational certification; it has had to maintain
support and administrative staffing levels. Higher energy prices continue to affect heating, power, and
student transportation. The school continues its commitment to infrastructure renewal with an annual
capital budget of $250,000.
Member towns' assessments are used to fund the portion of the budget that is not funded by the
combination of: 1) all other projected revenues and 2) member towns' State Required Minimum (SRM)
per - student payments. Member towns are assessed for the upcoming year based on their student
enrollment in the current year. This year the unfunded portion of the after - school education program
offered to middle school students will be absorbed inside of the regular assessment, and not assessed
based on use. The students who use this program are charged a $20 user fee, and the remaining $16,000
will now be paid by the in- district communities based on the regular assessment formula.
This year's assessments are based on a MRHS budget funded with projected Chapter 70 money of
$2,268,584 and $983,837 in transportation aid. This is a slight increase in expected funding of Chapter 70
aid ($10,531) and level funding of transportation aid compared with FY2008. Out -of- district enrollment
and its associated tuition revenue are anticipated to continue to decline over the long term; the FY2009
enrollment was 44 students below the October 2004 level of 270. This is mainly due to the State's current
Chapter 74 rules restricting the number of non - resident students eligible to enroll. Although the State caps
Page 15 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM -March 19, 2008
the non - resident student tuition rate, that rate is now set using the actual in- district average cost as a
factor. The non - resident tuition rate for FY2007 was set at $16,250 per student. Minuteman officials have
lobbied both the Legislature and the State's Commissioner of Education on this issue for years and
FY2008 rates were increased 4.5 %. The FY2009 non - resident rates have yet to be set by the State, but
they are anticipated to increase 3 % -5 %. Minuteman's budget assumes level per -pupil funding with
decreased out -of- district enrollment. Of course, all of these figures are preliminary until final approval of
the State's FY2009 budget.
The preliminary assessment for Lexington for FY2009 is $310,160 ( +25.8 %) higher than the FY2008
actual assessment. The main portion of this assessment is based on Lexington's FY2008 Base Enrollment
(as of October 1, 2007) of 59.8 full -time regular students in grades 9 -12, 8 (16 %) more than last year.
However, while Lexington's enrollment has increased, the overall MRHS in- district enrollment has
continued to decline, raising our Town's share of in- district enrollment by 22.2 %. This has increased our
total full -time student operating -share assessment by $137,561 ( +51.7 %) to $403,430, a per -pupil
increase of 31.2 %. In addition, Lexington's total SRM payment increased $172,640 ( +24.3 %). This
increase is due to our increased enrollment as our per - student SRM payment stayed fairly level.
A breakdown of the full assessment is:
Minuteman's Projected Assessment - based on the unapproved House -2 Budget
PROGRAM
Grades 9 -12:
Regular Day Students
Special Education Assessment
State Minimums for Lexington
Totals, grades 9- 12(ine. SPED)
Special Programs:
"Reduced Charge" Pupils
"Afternoon" Pupils
Totals, Special Programs
TOTAL OPERATING
Capital Assessment (based on enrolled
9 -12)
TOTAL ASSESSMENT
FTE BASIS
ENROLLMENT*
AVE PER PUPIL
CHG
ASSESSMENT
FY2008
FY2009
FY2008
FY2009
FY2008
FY2009
51.7
30
54
59.8
29
67
$5,143
$4,250
$13,145
$6,746
$4,250
$13,171
$265,869
$127,500
$709,843
$403,430
$123,250
$882,483
51.7
59.8
$21,339
$23,565
$1,103,212
$1,409,163
9
4.86
13
6.17 **
$5,174
$4,457
$5,077
0 **
$46,570
$21,663
$66,000
0 **
13.86
19.17
$4,923
$3,443
$68,233
$66,000
67.86
78.97
$17,868
$18,680
$1,171,445
$1,475,163
$561
$593
$28,993
$35,435
$18,311
$19,273
$1,200,438
$1,510,598
percentage increase over prior year 20.03% 4.47% 17.90% 25.84%
* prior year's enrollment as of October I
** the district wide cost of the "afternoon" pupil program ($16,000) distributed across
the district based on grade 9 -12 enrollment
The Committee unanimously (8 -0) supports this request.
Page 16 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Description
Amount
Requested
Funding
Source
Committee Recommends
Shared Ex enses
$39,860,457
GF, EF, RF
Approve (8-0)
Shared Expenses (see Brown Book, pp. IV -1 to IV -17) encompasses four basic categories: (1) Line 2100,
Employee Benefits; (2) Line 2200, Debt Service; (3) Line 2300, Reserve Fund; and (4) Line 2400, Public
Facilities.
Employee Benefits
This portion of Shared Expenses includes the costs for current and future pensions for retired employees;
health (self- insured) and dental (insured through a group policy) insurance for current and retired
employees; premiums for property and liability insurance policies; and potential unemployment and
workers compensation liabilities. It does not include any sums for the funding of health benefits for
future retirees. Pursuant to changes to the Government Accounting Standards Board (GASB)
requirements, and beginning with the FY2007 audit, the Town began reporting the unfunded liability in
its financial statements. Although there is as yet no obligation for Lexington to fund this liability,
nonetheless the Town proposes to begin to do so in FY2009 under Article 22 (see the discussion of that
Article in this Report).
Health benefits for both municipal and school employees (line 2130) are included in this section of the
budget, an approach that began with the FY2007 budget. The estimated expense for all health benefits
(including medical and dental) to be paid by the Town totals $22,140,749, by far the largest portion of
this section. This figure represents an 11.43% increase over the adjusted FY2008 budget and continues a
trend of escalating health costs that has confronted the Town since 2000. This increase results from
higher health costs, higher premiums, and the increasing enrollment of employees and their families in the
various health care phuis offered by the Town. For a further explanation of the multiple reasons
underlying this continuing increase, see page iii of the Town Manager's Report in the Brown Book,
Section 11 (a). Of the total budget amount of $22,140,794, employee /retiree health insurance is
$20,473,125; dental insurance is $772,000; $855,464 is for the Medicare tax; and $40,000 is for life
insurance.
Consistent with the FY2008 budget, the budget for FY2009 identifies the portions and percentages of the
projected health benefit costs attributable to municipal, school and retired employees (see Brown Book, p.
IV -4). The projected percentage increase of health costs for municipal employees is 10.39% and for
school employees is 12.85 %. This difference appears to be attributable to a percentage increase in
enrolled school employees (2.0 %) that is larger than the increase in enrolled municipal employees (0.8 %).
The percentage increase in health costs attributable to retired employees (which includes spouses) is
10.17 %; the number of enrolled retirees increases by 1.5 %. Most retirees have individual rather than
family plans. Individual plans for retirees are less expensive than individual phuis for active employees.
The total dollar amounts of the FY2009 estimates for municipal ($3,594,410) and school employees
($10,836,828) differ because a significantly greater number of individuals are employed on the School
side.
The estimate for health costs in Line 2130 assumes increases, totaling 44, in the numbers of municipal
employees, school employees, and retirees (see Brown Book, footnote on p. IV -4).
To accommodate the possibility that last year's override might fail, the FY2008 budget included a larger
than ordinary allocation of funds to Line 2140, Unemployment Benefits, to fund the Town's statutory
liability for unemployment compensation payments for employees whose positions were at risk. The
current budgeted amount for Line 2140, $100,000, is more consistent with prior years.
Page 17 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
The second largest figure in this section of Shared Expenses is Line 2110, $3,446,236. It represents the
amount to be paid by the Town to the Lexington Retirement Trust Fund, managed and overseen by the
Lexington Retirement Board, to continue an ongoing program to fund the Town's liabilities for current
and future pension payments to retirees. The Commonwealth of Massachusetts requires that
municipalities fully fund all such liabilities by 2028. Based on the annual payments the Town has made,
and is projected to continue to make, the Trust Fund should be fully funded by 2015.
Debt Service
Debt service includes interest and principal payments for within -levy long -term debt (bonds) and for
temporary borrowing. The budgeted debt payment recommended for FY2009 is $4,017,541, which is
$219,404, or 5.78 %, higher than in FY2008. The total amount is broken down as follows: temporary -
borrowing interest payments of $243,818; long -term debt interest payments of $663,723; and long -term
debt principal payments of $3,110,000. The long -term debt principal payment is 9.74% higher than in
FY2008, offsetting percentage decreases in long -term debt interest and temporary- borrowing payments.
It is anticipated that this section of the budget will increase by approximately $500,000 in FY2010, when
additional long -term within -levy debt is issued.
Reserve Fund
The amount recommended for appropriation to the Reserve Fund (Line 2310), from which the
Appropriation Committee approves transfers and payments for extraordinary and unforeseen expenses, is
$550,000. This is $100,000 more than was appropriated at the 2007 Annual Town Meeting for FY2008
(an additional $19,868 was added to that appropriation at the Fall 2007 Special Town Meeting). This
continues a pattern over the last several years of increasing appropriations to the Reserve Fund to
accommodate volatility in certain expenses in the operating budget, a policy consistent with the
recommendations of the Selectmen's Ad Hoc Fiscal Policy Committee. An appropriation of $150,000 for
FY2005 was approved by the 2004 Annual Town Meeting, but then was increased to $300,000 by means
of a supplemental appropriation at the 2005 Annual Town Meeting. The 2005 Annual Town Meeting
also appropriated $350,000 for FY2006. The 2006 Annual Town Meeting increased the FY2007
appropriation to $400,000.
As noted in the Brown Book, p. IV -12, this increase, in conjunction with other measures, effectuates the
Town's intent to build "... sufficient contingency funds into the budget without having to rely upon the
Stabilization Fund reserve that was largely established to offset revenue losses that typically occur during
a recessionary period" The purpose of this Reserve Fund is to provide contingency funds in the budget
to deal with unexpected and substantial cost overruns in areas such as snow removal, overtime expenses
for police and fire personnel, and Special Education. Budgeting an adequate Reserve Fund relieves
individual municipal and school departments from the need to include reserves in their respective
individual budgets.
Public Facilities
Unlike past years, Shared Expenses now includes a new entry, Public Facilities. At a Special Town
Meeting on November 29, 2006, Town Meeting voted to accept MGL Chapter 71, §37M, allowing the
Town's School Department to consolidate administrative functions with the Town's municipal
operations. At the 2007 Annual Town Meeting, that acceptance was revoted and ratified.
Consolidation of the facilities management and maintenance functions in FY2008 created a single,
unified, facilities department to administer major capital projects, building maintenance and custodial
services. The goal is to house this department's administrative and some common maintenance activities
at the renovated DPW complex.
Page 18 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
The Town Manager and Superintendent of Schools, with the guidance of the Board of Selectmen and
School Committee, worked to develop the organizational structure of the Facilities Department and then
translated that into an operating budget.
The consolidation of coordination and care of all town -owned buildings creates an opportunity for the
Town to develop a consistent facilities maintenance program as well as find savings through operating
efficiencies and economies of scale. The Department of Public Facilities is under the direction and
control of a Public Facilities Board composed of the Town Manager and the Superintendent of Schools.
A Director of Public Facilities, Patrick Goddard, was hired in August 2007 to supervise the services for
the buildings. The transition to the consolidated structure is not yet complete. The structure for the
department has been developed (see Brown Book, p. IV -15), however 2 key positions, the Project
Manager and the Facility Engineer, are currently being recruited. (Note – there is a Project Manager
currently on board who is retiring.) When the positions have been filled, a transition to the new structure
will occur where the current school department employees (facilities and custodial services) and the
municipal employees will start to report to the consolidated department. Bundling of purchases has begun
for bids currently being issued.
The FY2007 and FY2008 financial information presented on page IV -17 of the Brown Book was pulled
together from data in the School Department and the municipal financial records as a basis for
comparison to the FY2009 Recommended Budget. The information did not exist in consolidated form in
those periods so it was necessary to provide this "pro forma" financial information.
Overall, the department expenses are projected to increase by 0.59 %. This reflects an increase of 2.72%
in personal service costs and a 0.74% decrease in expenses. Please note that the Town has fixed rate
contracts for natural gas and electricity through December 2009, which contributes to the effective level -
funding of departmental expenses.
The full extent of efficiencies and economies of scale will be determined as the Department gets up and
running.
Article 5: Appropriate
FY2008 Enterprise
Funds Budgets
Funds Requested
Funding
Source
Committee
Recommendation
$6,545,020 Water
EF
Approve (8 -0)
EF + $7,148,801
Wastewater EF +
$1,576,083
Recreation EF
Page 19 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
FUNDS REQUESTED:
Enterprise Fund
FY2007
Actual
FY2008
Appropriated*
FY2009
Re uested **
1. Water
Personal Services
$558,368
$585,708
$606,952
Expenses
$679,714
$569,900
$463,845
Debt Service
$358,301
$490,833
$850,350
MWRA Assessment
$4,032,517
$4,117,775
$4,623,873
Total Requested in Article 5
$5,628,900
$5,764,216
$6,545,020
Indirect Expenses * **
$883,964
$859,728
$820,952
Total Water Enterprise Budget
$6,512,864
$6,623,844
$7,365,972
2. Wastewater
Personal Services
$240,146
$245,512
$251,864
Expenses
$473,405
$430,272
$385,565
Debt Service
$333,899
$473,256
$569,971
MWRA Assessment
$5,633,833
$5,630,873
$5,941,401
Total Wastewater Enterprise Fund
$6,681,283
$6,779,913
$7,148,801
Indirect Expenses * **
$753,950
$737,309
714,536
Total Wastewater Enterprise Budget
$7,435,233
$7,517,222
$7,863,337
* This column reflects adjustments made at the 2007 Special Town Meeting on October 10, 2007 to use the final
MWRA water and sewer assessments for FY2008 and to make certain other minor expense changes.
'* The amounts requested have been updated since the issuance of the Warrant to reflect the M WRA's preliminary
estimate of Lexington's FY2009 assessments for water and sewer(originally budgeted at an assumed increase of
10% ) and certain other minor adjustments. (See Brown Book pp. V -25, V -29)
* ** Indirect expenses are for Retirement (2110), Health Benefits (2130), General Liability Insurance (2160),
Municipal Salary Adjustment (2320), DPW (3100- 3500), Town Manager (8200), Finance Department (8400), and
MIS (8600)
Page 20 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Enterprise Fund
FY2007
Actual
FY2008
Appropriated
FY2009
Requested*
3. Recreation
Personal Services
$498,234
$571,546
$611,794
Expenses
$832,833
$960,668
$958,089
Debt Service
$172,013
$ 3,917
$ 6,200
Total Requested in Article 5
$1,503,080
$1,536,131
$1,576,083
Indirects **
$234,401
$255,848
$275,399
Total Recreation Enterprise Fund
$1,737,481
$1,791,979
$1,851,482
* The amounts requested have been amended slightly from the amounts set forth in the Warrant. (See
Brown Book, p. VII -9, for details.)
** Indirect costs include $100,000 for DPW Parks Division operations (Line 3310), $100,000 for debt
service for the Lincoln Park Recreation project, and $75,399 for benefits for the five full -time employees
of the recreation department.
DISCUSSION
The Town of Lexington has maintained Water, Wastewater (Sewer), and Recreation Enterprise Funds
since shortly after legislation authorizing the creation of such funds, G.L. c. 44, §531 was enacted by
the State Legislature in 1986. The Water and Wastewater Enterprise Funds do not rely on tax -levy
revenues, but cover their complete operating and capital needs with user charges and fees. The Recreation
Enterprise Fund covers its complete operating costs with user charges and fees and also contributes to the
debt service on certain recreation capital projects.
What is an Enterprise Fund?
As explained by the Massachusetts Department of Revenue (DOR), "an enterprise fund establishes a
separate accounting and financial reporting mechanism for municipal services for which a fee is charged
in exchange for goods or services. Under enterprise accounting, the revenues and expenditures of the
service are segregated into a separate fund with its own financial statements, rather than commingled with
the revenues and expenses of all other governmental activities. Financial transactions are reported using
standards similar to private sector accounting. Revenues are recognized when earned and expenses are
recognized when incurred, under a full accrual basis of accounting [unlike the modified cash basis of
accounting typically used for municipal accounting]. An enterprise fund provides management and
taxpayers with information to: [m]easure performance, [a]nalyze the impact of financial decisions; [and]
[d]etermine the cost of providing a service." [DOR Enterprise Funds Manual (June, 2002)]
Establishing the Enterprise Fund Budgets
At the Annual Town Meeting each year, Town Meeting appropriates a budget for each of the three
enterprises for the following fiscal year. Later in the year (generally in the late summer or early fall in the
case of the Water and Wastewater Enterprise funds), user charges are set that are designed, based on
projections of usage for the fiscal year, to be sufficient to cover the appropriations made by Town
Meeting to run the enterprises. Depending on the accuracy of the usage projections, the actual revenue
realized by the enterprise during the year may exceed or fall short of the appropriated amount. Any
operating surplus must be retained in reserve in the enterprise fund, and the funds accumulated in that
reserve (sometimes referred to as `retained earnings ") may be applied only to meet the capital needs of
the enterprise or to reduce user charges. If an enterprise fund sustains an operating loss (after applying
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
any accumulated reserves in the fund), such loss must be made up in the succeeding fiscal year's
appropriation.
Since FY2007, the Annual Town Meeting Warrant has contained a separate Article for the appropriation
of the enterprise fund operating budgets. Previously, enterprise fund operating costs —both the direct
expenses of running the enterprises and indirect charges from other Town departments —were
appropriated as part of the vote on the municipal operating budget. The various enterprise fund
appropriations were scattered among related line items in the operating - budget motion, making it difficult
to understand and keep track of the complete costs and operations of each of the various enterprise funds.
The new presentation makes it easier to understand the operating budgets of the enterprise funds.
However, the indirect costs that are charged to these enterprise funds are still appropriated as part of the
municipal operating budget (this year, in Article 4). For the complete operating costs of the enterprise
funds, including indirect costs, see the Brown Book, pp. V -25 (Water), V -29 (Wastewater) and VII-9
(Recreation). To help present a more meaningful picture of the complete enterprise fund operating
budgets, the tables included above have been expanded from those presented in the Warrant to show the
indirect as well as the direct costs of the funds. Appropriations for the capital needs of the enterprises
continue to be addressed in separate capital warrant articles. (See Article 14 - Recreation Capital Projects,
Article 16 - Water Distribution Improvements, and Article 17 - Sewer Improvements.)
Water/Wastewater Fund Issues
The largest component of the Water and Wastewater Enterprise Fund budgets is the charge imposed by
the Massachusetts Water Resources Authority (MWRA) for water and wastewater disposal. These are
assessments over which the Town has no control. The requested appropriation is based on the MWRA's
preliminary estimate of its anticipated assessments for Lexington for FY2009, of about $4.6 million for
water and $5.9 million for wastewater. Generally, the final assessments, which are rendered later in the
spring or early summer, are lower than the preliminary assessments, and the final budget used to set rates
for FY2009 will be adjusted to reflect the final, actual costs. (At last fall's Special Town Meeting, the
original appropriations for water and wastewater were lowered by approximately $320,000 and $570,000
respectively to reflect the reduced final assessments.)
The Water and Wastewater Fund budgets include direct costs, which are primarily for: (1) the wages and
salaries of the employees in the DPW's Water and Sewer Divisions, (2) the expenses of the water and
sewer maintenance activities and equipment, and (3) debt service on prior borrowings for water and sewer
enterprise capital improvements. Note that debt service costs are steadily increasing, since over the past
several years most of the capital improvements have been financed with debt rather than with a
combination of debt and cash as had been the previous practice. While the use of debt financing will help
to better spread the costs of projects over their useful life, the effect of the transition has been a temporary
lowering of capital costs which will eventually return to the original higher levels. In addition, the Water
and Sewer Enterprise Funds will be expected to bear approximately 25% of the debt service costs for the
new DPW facility that is being constructed (17% and 7% respectively, based on their expected usage of
the new building). It may be possible to mitigate some of the rate pressure the increased capital costs will
generate in the future with a judicious application of retained earnings to capital improvement projects
(see discussion below of reserves).
The budgets also include indirect costs, which are for services provided to the Enterprise Funds by other
departments, such as the Engineering Department, for insurance costs (health and liability), retirement
funding, utilities, and support services such as Comptroller, Management- Information Systems (MIS),
and the Revenue Department. In the fall of 2006, following up on a recommendation made in the final
report of the Water and Sewer Rate Study Committee in 2005, the Town staff conducted an analysis of
the basis for the indirect charges, and concluded that the level of indirect expenses that was being charged
to the Water and Wastewater Enterprise Funds was significantly higher than could be justified. To address
this issue without causing undue disruption to the Town Budget, the Town Manager recommended a
gradual phase -down of the indirect expenses charged to the Water and Wastewater Funds to the levels
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
supported by his analysis over a period of five years. Consistent with this multi -year phase -down plan, the
recommended budget for FY2009 contemplates modest reductions in the levels of indirect expenses
charged to the Water and Wastewater Funds, as set forth on pages V -22 and V -26 of the Brown Book.
For a number of years, the budgets for the Water and Sewer Enterprise Funds included charges, which
were recovered in the water and sewer rates, for payments in lieu of taxes (PILOTS)— $500,000 for the
Water Enterprise Fund and $250,000 for the Sewer Enterprise Fund. These were amounts that Town
Meeting had authorized to be paid from the Enterprise Funds to the General Fund for unspecified Town
services, in addition to the identified indirect costs, as though the Enterprise Funds were separate entities
subject to taxation. Because of uncertainties about the appropriateness and validity of these charges, and
at the recommendation of the Water and Sewer Rate Study Committee, the Board of Selectmen began
phasing out these charges in FY2007 at the rate of 25% per year. The PILOT charges in the FY2009
budget, which are included in the Expenses line item for "contractual services," are $125,000 for the
Water Enterprise Fund and $62,500 for the Sewer Enterprise Fund. These charges represent a 75%
reduction from the amounts charged prior to FY2007.
Finally, the Town Manager and stiff have given consideration over the past year to the levels of reserves
that are appropriate to maintain in the Water and Wastewater Enterprise Funds. For purposes of last fall's
water and sewer rate - setting for FY2008, the Town Manager proposed to the Board of Selectmen (acting
in its capacity as Water and Sewer Commissioners) the use of $362,570 in water enterprise retained
earnings to mitigate the FY2008 water rates. The effect was to lower the projected reserves from the
current amount of about $2.5 million as of the end of FY2007 to a little over $2 million at the end of
FY2008. With this draw on retained earnings (down from $500,000 applied the previous year), no
increase in the water rates was required for FY2008.
In the Sewer Enterprise Fund, the reserves stood at only $450,000 as of the end of FY2006, an amount
considered to be inadequate. However, favorable operating results in FY2007 and a significant non-
recurring increase in cash (resulting from a lien program that increased collections) increased the retained
earnings in the sewer fund by nearly $1.7 million to a toad of over $2 million as of the end of FY2007, an
amount now considered to be adequate. Accordingly, the Town Manager proposed to the Board of
Selectmen during last fall's rate - setting that they neither add to, nor draw from, reserves when setting the
FY2008 sewer rates. Even without a draw on retained earnings, no increase in the sewer rates was
required for FY2008.
Data provided to the Board of Selectmen in connection with this year's rate - setting indicates that the
Town's ability to forecast water usage, and thereby to anticipate revenues and reserve levels, has
improved substantially. Following up on a recommendation of the Water and Sewer Rate Study
Committee, the town staff plans to develop a policy that defines the appropriate level of retuned earnings
to be maintained for emergency purposes for both funds. The policy would provide that any amounts in
excess of those levels be used to mitigate future rate increases or finance capital projects. As previously
noted, one potential use of the retained earnings will be to help mitigate the effect of increased capital
costs, including debt service costs to be incurred for construction of the new DPW facility, on the need for
future rate increases.
Recreation Fund Issues
This budget represents an increase of $59,503 (3.32 %) from last year, primarily due to a 7% increase
($40,248) for wages. Fund wages and salaries total $563,120 for 5 full -time staff and 175 + /- seasonal
staff. $38,517 of this increase is in seasonal wages, and is a result of the increase in the State minimum
wage law as well as bringing a summer youth program in- house. Contractual services has a net reduction
of $29,259, in part due to a reduction of $15,138 for this program change, a $30,000 reduction for the
conclusion of a one -time Old Res water quality study, and a $7,024 expansion of the Pine Meadow Lease
Agreement. Electricity expenses are reduced $11,900, based on a three year average of usage.
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
60% of the revenue for the Recreation Enterprise Fund operating budget, $1,091,482, will come from user
fees for fields and registration fees for programs. All programs offered by the Recreation Department are
designed to be revenue neutral with charges to users matching the program's operating costs. The other
main source of revenue, $750,000, is from golf course fees, and is projected to be level funded. Golf
course expenses include a management contract base fee of $345,000 as well as an additional payment for
course management of 5% of collected course fees. This contract will expire on December 31, 2008, and
a 10% contingency has been added to the budget for the last half of FY2009, producing a projected
annualized contract rate of $362,250.
In FY2009, indirect, shared, and capital charges against the Recreation Enterprise Fund will total
$286,599. Under Article 4 (Operating Budget), $100,000 will be used for indirect costs to cover DPW
field maintenance, and $75,399 will be used for employee benefits. Under Article 5 (Enterprise Funds
Budgets), $100,000 of the Enterprise Fund revenue will be used to continue funding the Lincoln Field
debt service and $6,200 for other debt service. Under Article 9 (CPA Capital), $5,000 will be
appropriated for the Old Reservoir Management project.
The Committee unanimously (8 -0) supports these requests.
Article 6: Appropriate
Funds Requested
Funding
Committee
for Senior Service
Source
Recommendation
$45,000
GF
Approve (8 -0)
Program
This Article proposes an appropriation of $45,000 for the Senior Service Program. The requested amount
is believed to be sufficient to permit all eligible applicants to take advantage of the program under the
current guidelines adopted by the Board of Selectmen.
In the spring of 2006, Town Meeting voted to rescind its acceptance of the statewide senior property tax
work -off program under Chapter 59, §5K of the General Laws, and to substitute in its place a new, locally
controlled Senior Service Program. The purpose of replacing the pre - existing program was to free the
Town of the restrictions imposed by the State statute on age, wage rate, and credit amount, and in
particular to give the Town the flexibility to:
• Allow participation by persons under age 60, such as the disabled and handicapped, who might be
able to benefit from the program,
• Pay a wage higher than the minimum wage, and
• Allow more than $750 to be credited against a participant's property tax bill.
The new program was to be funded by direct appropriation from the tax levy rather than through the
Town's overlay account. The original funding amount of $25,000 was established at a level only slightly
higher than the amount that had been expended from the overlay account during the three preceding fiscal
years (ranging from $20,034 in FY2004 to $23,706 in FY2006).
The guidelines adopted by the Board of Selectmen increase eligibility and enhance benefits in the
following respects, compared to the State program:
• Income eligibility was set at $46,300 for single taxpayers or $52,950 for a couple (versus $36,750
if single, $42,000 if married under the State program)
Hourly rate was set at $8.50 (versus minimum wage under the State program, which was then
$6.75 and increased to $7.50 on January 1, 2007 and $8.00 on January 1, 2008)
• Maximum credit was set at $850 (versus $750 under the State program).
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
On the other hand, eligibility under the new program was restricted, in comparison with the State
program, by limiting participation to one enrollee per taxable household in the interests of equity.
Although the Board of Selectmen has the ability to expand eligibility to persons under age 60 who are
disabled or handicapped, it has not yet done so.
When these guidelines were set, it was believed that the $25,000 originally appropriated by Town
Meeting would be adequate to fund the program. In fact, applications to the program exceeded
expectations. A total of 43 eligible applicants applied, compared with prior participation of 31 in FY2004
and 37 in each of FY2005 and FY2006. In order to make it possible for all eligible applicants to
participate, Town Meeting voted at the November 29, 2006 Special Town Meeting to increase the
FY2007 appropriation by $11,000 to $36,000.
At the 2007 Annual Town Meeting held the following spring, Town Meeting voted to further increase the
appropriation for FY2008 to $40,000. Although the eligibility criteria, hourly rate and maximum credit
so far have not been changed, this additional cushion has given more individuals a chance to participate.
A total of 31 individuals qualified to participate in the program in FY2008 (applications were accepted
between July 15 and September 15, 2007, so that number is now fixed). If all participants work the full
number of hours (100) necessary to earn the maximum credit ($850), the total cost of the program in
FY2008 will be $26,350.
This requested appropriation of $45,000 for FY2009 would be sufficient to accommodate everyone who
participated in FY2008, and would also allow some flexibility to admit additional applicants to the
program, to increase the hourly rate, and/or to increase the amount of the allowable credit. If all eligible
participants do not in fact earn the maximum possible credit, then any surplus that remains in the program
will be carried over as a "continuing balance" for potential use in the following fiscal year.
In its report on the original article creating this program in 2006, this Committee observed that: "The ...
cost of the proposed program is amply justified, indeed a bargain. Not only does it provide participating
residents a productive way to become involved in the community, while at the same time alleviating some
of the burden of their local property taxes, it also provides the Town with valuable and necessary
services.... Making a direct appropriation for this program, rather than funding it through the overlay
account, [increases] transparency and [gives] Town Meeting more control over the budget" These
observations continue to apply.
The Committee unanimously (8 -0) supports this request.
Article 7: Appropriate
Funds Requested
Funding
Committee
for Street Trees
Source
Recommendation
$24,000
GF
Disapprove (0-8)
At the 2001 Town Meeting, $50,000 from Free Cash was appropriated to fund the beginning of a multi-
year program for the planting, care, management and maintenance of Town trees, it being understood that
future expenditures would come from State grants and/or be funded as a line item in the DPW operating
budget. MASS Releaf Grants from the Massachusetts Department of Environmental Management were
obtained in FY2004, FY2005 and FY2006. State grants for planting of trees were not available for
FY2007, FY2008 or FY2009.
The proposed operating budget for FY2006 submitted to Town Meeting included $5,000 for the ongoing
tree planting program. As a result of the FY2007 override, each successive budget, for FY2007,
FY2008, and the proposed FY2009 budget, has included $5,000 for tree planting (see Brown Book, p. V-
12). In FY2007, at the request of the Tree Committee, the DPW requested an additional $25,000 to fund
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
the program. Similarly, the DPW requested an additional $24,000 in FY08. However, because of
budgetary considerations, the requests were not approved. The budgets proposed in those years, accepted
and approved by Town Meeting, did not include those amounts.
This year's budget includes $5,000 for the program (see Brown Book, p. V -12). The DPW, at the request
of the Tree Committee, sought an additional $24,000. That request was categorized by staff as a program
improvement, and as such had to compete with higher- priority items within a limited budget. It
consequently failed to displace those items and was not included in the budget by the Town Manager and
Selectmen.
A small amount of additional funds, beyond those in the budget and those available in State grants, exists
in the Tree Revolving Fund, which is part of Article 8. The sources of monies for that Fund are private
contributions and mitigation contributions under the Town Tree By -Law.
A majority of the Appropriation Committee believes this request, in combination with the budgeted
$5,000, is a reasonable minimum funding level for the Town's tree program. However, the Committee
cannot support this request at this time in the absence of: (1) an appropriate and sufficient funding source,
and (2) a consensus that this is the first priority claim on these funds.
The Committee, by a vote of (0 -8), disapproves this request.
Article 8: Continue
Funds Requested
Funding
Committee
and Approve
Representative or
Source
Recommendation
Board to Spend
Departmental
See table below
RF
Approve (8-0)
Revolving Funds
Director
Burial Vaults
Program or Purpose
Authorized
Departmental Receipts
FY2008
Representative or
Authorization
Board to Spend
DPW Burial Containers
Public Works
Sale of Grave Boxes and
$35,000
Director
Burial Vaults
DPW Compost Operations
Public Works
Sale of compost and loam,
$252,000
Director
yard waste permits
LexMedia Operations
Board of Selectmen
License fees from cable TV
$400,000
and Town Manager
providers
Trees
Board of Selectmen
Gifts and fees
$20,000
Minuteman Household
Public Works
Fees paid by consortium
$175,000
Hazardous Waste Program
Director
towns
Health Programs
Health Director
Medicare reimbursements
$7,000
Council on Aging
Social Services
Program fees and gifts
$100,000
Programs
Director
School Bus Transportation
School Committee
School bus fees
$830,000
Public Facilities
Director of Public
Building rental fees
$191,000
Revolving Fund
Facilities
Departmental Revolving Funds are an important part of the Town's overall finance structure. Ordinarily,
revenue received by any municipal department must be deposited in the General Fund, and cannot be
expended for any purpose without further appropriation by Town Meeting. The Revolving Fund allows
Town Meeting to dedicate in advance a specific source of anticipated revenue from fees and charges, on
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
an ongoing basis and without the need for further appropriation, to pay expenses for rendering the
services for which those fees and charges are collected.
Revolving Funds managed by municipal departments are generally governed by G.L. c. 44, § 53E1/2.
(There are also a number of Revolving Funds managed by the School Department, such as the School
Lunch Fund, which are governed by other statutes and are not within the control of Town Meeting.)
Under Section 53E1/2, a municipal Revolving Fund can be established only by vote of Town Meeting.
That authorization must be renewed prior to each succeeding fiscal year. The authorization must specify:
• the purpose(s) for which monies deposited in the fund may be used;
• the source(s) of funds to be deposited;
• the board, department or officer authorized to expend monies from the fund; and
• a limit on the total amount that may be expended from the fund in the ensuing fiscal year.
Expenditures may not be made, nor liabilities incurred, in excess of the balance of the fund.
If a Revolving Fund is reauthorized, any balance in the fund may be carried over to the next fiscal year. If
a Revolving Fund is not reauthorized, or if the purposes for which the money in the fund may be spent are
changed, the balance in the fund reverts to the General Fund at the end of the fiscal year unless Town
Meeting votes to transfer the funds to another duly established Revolving Fund.
Seven municipal Revolving Funds are proposed to be reauthorized this year: the DPW Burial Containers
Fund and the DPW Compost Operations Fund (which were formerly combined in a single fund); the
LexMedia Operations (formerly CATV Operations) Fund; the Trees (formerly Tree Planting) Fund; the
Minuteman Household Hazardous Waste Program Fund; the Health Programs Fund; and the Council on
Aging Programs Fund. The spending limit proposed for each of the funds is based on a reasonable
estimate of the fees and charges likely to be received, as well as of the expenditures likely to be required.
The final fund balances that will carry over from FY2008 to FY2009 won't be known until the end of the
fiscal year. As of December 31, 2007, the fund balances were as follows:
DPW Burial Containers
$53,150
DPW Compost Operations
$192,077
LexMedia Operations
$618,109
Trees
$2,224
Minuteman Household Hazardous Waste Program
$19,507
Health Programs
$1,240
Council on Aging Program
$17,815
It should be noted that interim increases in the spending limit for Revolving Funds may be authorized by
joint action of the Board of Selectmen and the Appropriation Committee when necessary. In January of
2008, the Appropriation Committee acted favorably on a request by the Town Manager and the Board of
Selectmen to approve a one -time increase in the FY2008 spending limit for the LexMedia Operations
Fund (also sometimes referred to as the PEG Access Revolving Fund) by an additional $400,000 over the
$400,000 spending limit set at the 2007 Annual Town Meeting. This additional amount will be more than
adequately covered by the fund's anticipated cash flow from legally required payments made by the
Town's cable providers. It will be transferred in the form of a grant by the Town to LexMedia for the
build -out of the space in Kline Hall that has been made available at Avalon at Lexington Hills (the former
Metropolitan State Hospital Property) to be used for LexMedia's PEG Access cable television operations.
The proposed spending authorization for the LexMedia Operations Fund for FY2009 is the sane as the
$400,000 amount originally approved for FY2008, and is the amount needed to cover LexMedia's
ongoing operations.
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Town Meeting is also being asked to approve the creation of two new departmental Revolving Funds: the
School Bus Transportation Fund and the Public Facilities Revolving Fund. These additional Revolving
Funds have been proposed so that the relevant departments can better and more transparently manage and
account for the fees, charges and other revenues they collect or receive, some of which were previously
accounted for in special revenue funds off - budget, and so the unexpended balances of funds collected can
be carried over from year to year. Fees collected for school bus services will be deposited into the School
Bus Transportation Fund. It is important to not commingle these funds with other funds since the School
Department is trying to manage on a no -profit no- subsidy basis all school transportation costs that it is not
required by law to provide free of charge. The Public Facilities Revolving Fund, which was contemplated
in the 2007 memorandum between the Board of Selectmen, the Town Manager and the School Committee
providing for the joint Department of Public Facilities, will be used to account for all fees collected by the
Department for the use of school and municipal buildings other than the Cary Memorial Library.
The Committee unanimously (8 -0) supports the reauthorization of each of the existing Revolving Funds,
and the creation of the two new Revolving Funds.
Article 9: Appropriate
the FY2008
Community
Funds Requested
Funding
Source
Committee
Recommendation
(a) Survey and Define
Preservation
Affordable Housing
$25,000
CPA
Committee
Details in table
Operating Budget
below
CPA
see below
and for CPA
(b) Belfry Hill Tree
Projects
Restoration
$9,850
CPA
Project Description
Amount
Requested
Funding
Source
Committee Recommendation
(a) Survey and Define
Affordable Housing
$25,000
CPA
Disapprove (1 -6 -1)
Assistance Programs
(see Brown Book, p. XI -17)
(b) Belfry Hill Tree
Restoration
$9,850
CPA
Approve (8 -0)
(see Brown Book, p. XI -17)
(c) Hancock - Clarke House
Restoration
$600,000
CPA
Approve (8 -0)
(see Brown Book, p. XI -17)
$55,000 from
CPA funds;
(d) Old Reservoir Management
$60,000
$5,000 from
Approve (8 -0)
(see Brown Book, p. XI -15)
Recreation
Fund retuned
earnings
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Project Description
Amount
Requested
Funding
Source
Committee Recommendation
(e) Vynebrook Village
Windows
$158,686
CPA
Approve (8 -0)
(see Brown Book, p. XI -17)
(f) Archive Record
Management and
$150,000
CPA
Approve (8 -0)
Conservation
(g) Parker Manor Condo
Purchases
$652,800
CPA
Approve (8 -0)
(see Brown Book, p. XI - 18)
(h) Senior Center Design,
Renovation and Expansion
unknown
CPA
(see Brown Book, p. XI -15)
(i) Harrington Pre- School
Playground
$75,000
CPA
Approve (8 -0)
(see Brown Book, p. XI -12)
0) School Administration
$330,000 from
Building /Old Harrington
$400,000
CPA funds;
$7 from
Approve (8 -0)
(see Brown Book, p. XI -12)
free cash
free c
(k) Town Office Complex
Building Envelope
$95,000
CPA
Approve (8 -0)
(see Brown Book, p. XI -16)
(1) East Lexington Fire
Station
$47,000
CPA
Approve (8 -0)
(see Brown Book, p. XI -16)
(m) ADA Accessible
Bathrooms and Signs for
$70,000
CPA
Approve (8 -0)
Town Office Building
(see Brown Book, p. XI -16)
(n) Town Office Building
Use Study and Renovation
$80,000
CPA
Approve (8 -0)
Design
(see Brown Book, p. XI -15)
(o) Stone Building
unknown
CPA
Renovation
(p) Land Acquisition
unknown
CPA
(q) Munroe Fire Prevention
System Replacement
$579,550
CPA
Pending
(see Brown Book, p. XI -15)
(r) Administrative Expenses
$50,000
CPA
$50,000 (8 -0)
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Background
The Community Preservation Act (CPA) is a State statute that allows municipalities to raise a surcharge
on property taxes for local use for purposes related to historic preservation, open space (including
recreation), and affordable housing. The State provides matching funds (originally 100% but varying
according to monies available and demand from adopting communities) from fees imposed on real estate
transactions including mortgage refinancing. While the statute provides some broad guidance on the
appropriate use of CPA funds, it allows for a considerable measure of local control, including (1) the
establishment of a local Community Preservation Committee (CPC) to review and make
recommendations on potential CPA project candidates to Town Meeting, and (2) establishing Town
Meeting's authority to vote CPC - recommended projects up or down. Town Meeting cannot amend CPC -
recommendations to increase an appropriation but may amend to decrease an appropriation.
Accordingly, communities adopting CPA have each adapted their implementation of the statute to
leverage the State matching funds and the locally- raised surcharge in a way that reflects local
opportunities, priorities and needs. One of Lexington's opportunities lies in the inventory of municipal
and school buildings that qualify as historic buildings and therefore are eligible for CPA funding,
including the State matching funds. This is a win for the taxpayer, who benefits from leveraging State
matching funds, and a win for the Town, which has a backlog of capital projects that compete each year
for limited resources within the tax levy and would benefit from the availability of an alternative funding
source. The CPA allows this opportunity to be accommodated, if the CPC and Town Meeting so choose,
along with other opportunities for historic preservation, acquisition and preservation of open space and
land for recreational use, and providing affordable housing.
Indeed, at the 2007 Annual Town Meeting, the Appropriation Committee expressed its disappointment
that more Town capital projects had not been submitted for possible funding with CPA monies. We
commend municipal and school staff for accelerating their planning schedules this year to bring projects
forward on a timely basis to the CPC, and we commend the CPC for adjusting its schedule to facilitate
this process.
The Appropriation Committee (AC) is pleased that Town Meeting will have an opportunity to consider
CPA funding of most of the municipal and school projects submitted to the CPC for consideration. One
item did not achieve majority support on the CPC ($40,000 for a utilization /design study of the Fire
Headquarters on Bedford Street) and is therefore recommended for funding from Free Cash under Article
19.
Lexington's CPC has published a useful document (available on -line at
http: / /ci.lexington.nut.us/ Committees/ CommunityPreservationCommittee /CPCneedsassessment 10-4 -
07.pdf) that provides a description of local goals and opportunities and the criteria our local CPC is
considering as it reviews project proposals for CPA funding. The AC, along with the Capital
Expenditures Committee, has encouraged the CPC to continue to interpret its charter this broadly so the
larger community (through Town Meeting) has the opportunity to leverage the CPA for municipal and
school capital projects as well as the many other worthwhile opportunities for promoting open space,
historic preservation, and affordable housing.
This Year's Requests
Town Meeting is being asked to appropriate $2,978,886 of Community Preservation Act (CPA) money
and an additional $75,000 of cash capital. There is an estimated $9,993,913 of CPA funds available for
appropriation at this Town Meeting: $5,648,271 in carry - forward reserves and $4,345,642 from FY2009
anticipated revenues. These revenues include FY2009 surcharge collections of $2,754,960, $40,000 of
investment interest, and a State match of $1,550,682 (anticipated to be 60% of the collected FY2008
surcharges).
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APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Of the eighteen projects summarized in the table above, the Appropriation Committee supports thirteen.
Three projects (h, o, p) were not ready for consideration at press time, one project (a) is not supported by
the Committee (see below), and the Committee's recommendation on one project (q) is pending (see
below). The Committee also has some comments below regarding item (n).
(a) Survey and Define Affordable Housing Assistance Programs: This request, proposed by the Lexington
Housing Partnership and LeXHAB, would provide funds to hire a consultant to survey homebuyer
assistance programs in other Massachusetts communities and recommend what program(s) might be
feasible in Lexington.
A majority of the committee is unable to support this request.
Our first objection is that, as far as we know, there is no comprehensive Town policy that lays out in
detail the goals of the Town's affordable housing program, what methods or resources are appropriate for
malting progress toward each goal as well as their advantages and disadvantages, and the relative
priorities of the various approaches. We suspect that, when the foundations of the Town's affordable
housing program are reviewed, there will be substantial concerns about funding a program to benefit
relatively well -off households when there are so many lower income households in the area that cannot
even consider buying homes. To elaborate, we also suspect that any funds put toward an ownership
program are funds that could have been put toward the Town's successful rental program.
Our second objection is closely related to the first, but is more specific, i.e., we do not see an adequate
justification for the use of property tax dollars to further the financial interests of people who can afford
decent housing even though they may not be able to afford to buy a home in Lexington. The intended
recipients would likely be better off financially than many current Lexington taxpayers.
A third objection is that a survey of the general approaches in a small number, e.g. half a dozen, of other
Massachusetts towns could be undertaken as a project by the Housing Partnership and other affordable
housing proponents. Perhaps a consultant would be useful to get nut - and -bolts details completely
straight, but that doesn't appear to be an important goal of the requested survey. We believe that
volunteers could accomplish most of the goals of the proposed survey over the course of the next year.
The proponents of this expenditure argue that the fact that the failure of two home ownership proposals to
advance should be taken as a reason to approve this appropriation. We believe this history suggests
otherwise, that such projects are unlikely to succeed. The proponents also argue that a consultant is
needed to get ideas beyond those tried earlier. We agree that new ideas may be in order, but that it is not
necessary to engage a consultant to find them. The above discussion suggests to us that ideas that identify
funding that does not come directly from Lexington tax revenue might be the most likely to be
productive.
Finally, while we acknowledge that it would be desirable to see more economic diversity among
Lexington homeowners and to make it possible for certain people employed in town to live here, we do
not see that as justifying a home ownership affordable housing program.
(n) Town Office Building Use Study and Renovation Design: The Committee joins the Capital
Expenditures Committee in asking that there be a "pause" in the project after the use study and design
development activities are completed but before construction drawings are begun to allow the opportunity
for the finance committees to evaluate the results of the use study and design development and the
direction these suggest for the scope of the building renovation.
(q) Munroe Fire Prevention System Replacement: The Committee's recommendation is pending further
information about the eventual disposition of this Town -owned building. It is important to note, however,
that although either the Town or a private owner could apply for and receive CPA funding for this project,
if CPA funding is approved under this article for the Town -owned asset, that funding appropriation is not
transferable to subsequent owners.
Page 31 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Article 10: Land
Funds Requested
Funding
Committee
Purchase —Off
$77,000
Source
Recommendation
None at press time
CPA
Pending
Marrett Road
Article 11: Land
Funds Requested
Funding
Committee
Purchase —Off
$77,000
Source
Recommendation
None at press time
CPA
Pending
Hartwell Avenue
Article 12: Land
Funds Requested
Funding
Committee
Purchase —Off
$77,000
Source
Recommendation
None at press time
CPA
Pending
Lowell Street
Article 13: Land
Funds Requested
Funding
Committee
Purchase —Off
$77,000
Source
Recommendation
Renovation
Cedar Street and
Off Hartwell
None at press time
CPA
Pending
Avenue
See below
See below
Article 14:
Funds Requested
Funding
Committee
Appropriate for
$77,000
Source
Recommendation
Renovation
Recreation Capital
(b) Park Improvements —
$100,000
GF (Debt)
Projects
$177,000
See below
See below
Project Description
Amount
Requested
Funding
Source
Committee Recommendation
(a) Center Complex Restroom
$77,000
GF (Cash)
Approve (8 -0)
Renovation
(b) Park Improvements —
$100,000
GF (Debt)
Approve (8 -0)
Athletic Fields
These requests are well described in the Brown Book on pp. XI -17 and XI -8, respectively.
The Committee unanimously (8 -0) supports these requests.
Page 32 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Article 15:
Funds Requested
Funding
Committee
Appropriate for
$1400
Source
Recommendation
(see Brown Book, . XI -5)
,,000
Chapter 90 ($700,000)
Municipal Capital
GF (Debt)
Projects and
(b) DPW Equipment Replacement
See below
See below
Approve (8 -0)
mount T TB D
amount
Balance of prior capital
Equipment
articles
Project Description
Amount
Requested
Funding Source Source
Committee
Recommendation
(a) Woburn Street Reconstruction
$1400
GF Debt ($700,000)
Approve (8 -0)
(see Brown Book, . XI -5)
,,000
Chapter 90 ($700,000)
GF (Debt)
(b) DPW Equipment Replacement
$510,000
Compost Fund (Debt)
Approve (8 -0)
(see Brown Book, p. XI -6)
Balance of prior capital
articles
(c) Sidewalk Improvements
$275,000
GF (Debt)
Approve (8 -0)
(see Brown Book, p. XI -6)
(d) Central Business District (CBD)
Sidewalks
$370,000
GF (Debt)
Pending
(see Brown Book, p. XI -6)
(e) Geographic Information System
$129,045 GF (Debt) +
(GIS)
$184,350
$33,183 Water EF RE +
Approve (8 -0)
(see Brown Book, p. XI -6)
$22,122 Wastewater EF
RE
(f) Storm Drain Improvements
$160,000
GF (Cash) + Balance of
Approve (8 -0)
(see Brown Book, . XI -7)
prior capital articles
(g) Hydrant Replacement Program
$50,000
$25,000 GF Cash
Approve (8 -0)
(see Brown Book, . XI -14)
$25,000 Water EF RE
(h) Street Improvements
$500,000 GF (2000
(see Brown Book, p. XI -14)
$525,000
Override Set - Aside)
Approve (8 -0)
$25,000 (GF Cash)
(i) Traffic Mitigation
$50,000
GF (Cash)
Approve (8 -0)
(see Brown Book, p. XI -14)
0) Replacement of Rescue 2
$200,000
GF (Debt)
Approve (8 -0)
(see Brown Book, . XI -6)
(k) Police &Fire/EMS Mobile
Computerization
$156,000
GF (Debt)
Approve (8 -0)
(see Brown Book, p. XI -7)
(1) Permit Tracking Software
$100,000
GF (Debt)
Approve (8 -0)
(see Brown Book, p. XI -7)
(m) Town/School Phone System
Needs Assessment
$30,000
GF (Cash)
Approve (8 -0)
(see Brown Book, p. XI -16)
Page 33 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Project Description
Amount
Requested
Funding Source Source
Committee
Recommendation
(n) Head End Equipment
Source
Recommendation
Replacement
$60,000
GF (Cash)
Approve (8 -0)
(see Brown Book, p. XI -16)
EF
Approve (8 -0)
Improvements
These 14 requests are well described in the Brown Book (page references indicated above).
The Committee has additional comments on items (a) and (d):
(a) Woburn Street reconstruction: At the 2007 Annual Town Meeting, $120,000 was appropriated for
the design of a complete reconstruction of Woburn Street (Article 31 -d, 2007 ATM). The FY2009
request is for $1,400,000 to carry out this reconstruction, of which $700,000 is proposed from GF debt
and $700,000 from Chapter 90 funds. This is the type of project that is more appropriately funded by
seeking a debt exclusion override (price tag exceeding $1 million; reconstruction rather than
repair /maintenance). However, the following circumstances have convinced the Committee to accept the
proposed financing plan:
• the extremely poor condition of Woburn Street,
• the political reluctance to bring forward a debt exclusion override question this spring
• the Engineering Department's assurances that this one -time diversion of Chapter 90 funds from
the annual street resurfacing program will not have too great of an adverse effect on that program,
and
• the possibility of including the $700,000 General Fund debt in a future debt exclusion.
We strongly recommend that future road reconstruction projects be planned as debt exclusions to prevent
crowding -out pressures on the annual operating and capital budgets.
(d) Central Business District sidewalks: The Committee's recommendation is pending review of the
completed first phase installation of wire -cut bricks on Massachusetts Avenue in the Central Business
District. Factors the Committee will consider include:
• feedback from the Committee on Disabilities,
• how well the initial instillation has withstood winter weather and snow removal, and
• the weighing of costs and benefits of wire -cut bricks as opposed to other sidewalk materials.
The Committee unanimously (8 -0) supports these requests, with the exception of (d), on which a
recommendation is pending.
Article 16:
Funds Requested
Funding
Committee
Appropriate for
Source
Recommendation
Water Distribution
$1,800,000
EF
Approve (8 -0)
Improvements
This Article addresses proposed capital expenditures to be made during FY2009 as part of a continuing
program to upgrade and keep current the assets of the Water Enterprise Fund. For general background on
Page 34 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
the Enterprise Funds, and the relationship between the budget process and the water rate setting process,
please see the discussion under Article 5, which addresses the Enterprise Fund operating budgets.
As part of a multi -year project to upgrade aging water infrastructure, a total of $1,800,000 is requested
this year to replace approximately 7,500 linear feet of obsolete, unlined pipe or other pipe with high repair
records. The details of the project, including the locations where work is expected to be done in FY2009,
can be found in the Brown Book (p. XI -10). According to the Brown Book, at the current `rate of
funding, it is anticipated that no unlined water pipe will remain after 2011" After the pipe replacement
program is completed, there will still be a need for ongoing capital expenditures "to keep pace with the
regular deterioration and any needed modifications to the system." Presumably, however, the amounts
required for this purpose each year will be smaller absent extraordinary circumstances.
The costs of this year's proposed pipe replacement project will be funded entirely by borrowing. The
costs of the debt service for this borrowing will be home by the operating budgets for the Water
Enterprise Fund in FY2008 and future years until the debt is retired (see the debt service schedule
contained on the same page in the Brown Book), and will be included each year as an element of the
water rates.
Capital appropriations for similar purposes, have been made in most years since the Water Enterprise
Fund was established (except for FY2006 when engineering studies were not completed in time), as
illustrated in the table below. The goal is to keep the system current so the Town can assure "dependable
high water quality, pressure, and volume for domestic needs, commercial needs, and fire protection as
well as minimization of water main breaks."
Fiscal Year
Purpose
Cash
Borrowing
Total
2003
Water Dist. Improvements
$340,000
$560,000
$900,000
2004
Water Dist. Improvements
$400,000
$500,000
$900,000
2005
Water Dist. Improvements
$400,000
$450,000
$850,000
2006
None
$0
$0
$0
2007
Water Dist. Improvements
Water Meters
$0
$0
$900,000
$250,000
$1,150,000
2008
Water Dist. Improvements
$0
$1,800,000
$1,800,000
2009(rec)
Water Dist. Improvements
$0
$1,800,000
$1,800,000
Prior to FY2007, as shown in the table above, capital expenditures for water distribution improvements
were funded by a combination of Enterprise Fund cash capital and borrowing. Since then, there has been
a transition to funding these ongoing improvements exclusively with debt. As the Committee noted in last
year's report, this transition to exclusive debt financing has helped to mitigate the need for rate increases
in the short term; however, it will also increase the future debt service costs of the Water Enterprise
Fund —as illustrated in the Brown Book, p. XI -10, Table II and sumrrkrrized below —which in turn is
likely to create greater rate pressure in the future.
Water Enterprise Fund Debt Service Costs
Fiscal Year
2008
2009
2010
2011
Amount
$490,833
$834,481
$1,193,526
$1,362,358
Page 35 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
As can be seen, past borrowings and this year's borrowing alone will more than double the annual debt
service costs between FY2008 and FY2011 to a level that represents a significant portion of the overall
Water Enterprise Fund operating budget (currently about $7 million). Future borrowings for water
distribution improvements will continue to increase the annual debt service costs until a new equilibrium
between issuance and retirement of debt is reached, and the planned 17% contribution to the financing of
the new DPW facility will add to the fund's debt burden. As noted in the discussion under Article 5, it
may be appropriate in the future to make judicious use some of the fund's accumulated retuned earnings
to help defray the impact of these growing capital costs on the rates.
The Committee unanimously (8 -0) supports this request.
Article 17:
Funds Requested
Funding
Committee
Appropriate for
Source
Recommendation
Sewer
$1,300,000
EF
Approve (8 -0)
Improvements
This Article addresses proposed capital expenditures to be made during FY2009 as part of a continuing
program to upgrade and keep current the assets of the Wastewater Enterprise Fund. For general
background on the Enterprise Funds, and the relationship between the budget process and the water rate
setting process, please see the discussion under Article 5, which addresses the Enterprise Fund operating
budgets.
A total of $1,300,000 is requested this year: $1,200,000 as part of a multi -year plan to rehabilitate 7,000
linear feet of sanitary sewer infrastructure per year for the foreseeable future, and $100,000 for year two
of a five year program to upgrade Lexington's ten sewer pumping stations. The details of the projects,
including the locations where the work is expected to be done, can be found in the Brown Book (p. XI-
11).
Both amounts will be funded entirely by borrowing. The costs of the debt service for this borrowing will
be borne by the operating budgets for the Wastewater Enterprise Fund in FY2009 and in future years until
the debt is retired (see Brown Book, p. XI -11, Table III), and will be included each year as an element of
the sewer rates.
Capital appropriations for similar purposes have been made in most years (except for FY2006 when
engineering studies were not completed in time) since the Wastewater Enterprise Fund (formerly the
Sewer Enterprise Fund) was established, as illustrated in the table below.
Page 36 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Fiscal Year
Purpose
Cash
Borrowing
Total
2003
Storm Sewer Improvements
$100,000
$0
$100,000
2004
San. /Storm Sewer Improvements
$225,000
$0
$225,000
2005
San. /Storm Sewer Improvements
$750,000
$0
$750,000
2006
None
$0
$0
$0
2007
Sewer Improvements
Water Meters
$0
$0
$300,000
$250,000
$550,000
2008
Sewer Improvements
$0
$1,300,000
$1,300,000
2009(rec)
Sewer Improvements
1 $0
1 $1,300,000
1 $1,300,000
Prior to FY2007, as shown in the table above, capital expenditures for sewer distribution improvements
were funded primarily by enterprise -fund cash capital. Since then, there has been a transition to funding
these ongoing improvements exclusively with debt. As the Committee noted in last year's report, this
transition to exclusive debt financing has helped to mitigate the need for rate increases in the short term;
however, it will also increase the future debt - service costs of the Wastewater Enterprise Fund— as
illustrated in the Brown Book, p. XI 11, Table III and summarized below —which in turn is likely create
greater rate pressure in the future.
Wastewater Enterprise Fund Debt Service Costs
Fiscal Year
2008
2009
2010
2011
Amount
$473,256
$496,531
$885,877
$772,348
As can be seen, past borrowings and this year's borrowing alone will nearly double the annual debt
service costs between FY2008 and FY2011 to a level that represents a more significant portion of the
overall Wastewater Enterprise Fund operating budget (currently about $8 million). Future borrowings for
water distribution improvements will continue to increase the annual debt service costs until a new
equilibrium between newly incurred and retired debt is reached, and the planned 7% contribution to the
financing of the new DPW facility adds to the fund's debt burden. As noted in the discussion under
Article 5, it may be appropriate in the future to make judicious use some of the fund's accumulated
retained earnings to help defray the impact of these growing capital costs on the rates.
The Committee unanimously (8 -0) supports this request.
Page 37 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Article 18:
Funds Requested
Funding
Committee
Appropriate for
Source
Recommendation
$465,000) and
School Capital
$835,000
See below
Approve (8 -0)
Projects and
Program
rogram
Article 30 -
Equipment
$135,000)
Project Description
Amount
Requested
Funding
Source
Committee Reeommendaton
GF (Debt -
$465,000) and
School Technology
$600,000
GF (2005
Approve (8 -0)
Program
rogram
Article 30 -
$135,000)
(b) Pre-K-12 Master Plan
$155,000
GF (Free Cash)
Approve (8 -0)
(c) Food Service Equipment &
$55,000
GF (Free
Approve (8 -0)
Software
Cash)
(d) Classroom Furniture
$25,000
GF (Free
Approve (8 -0)
Cash)
The requests listed for this article are those approved by the School Committee on January 23, 2008.
Each of these projects is described on the following pages in the Brown Book: School Technology
Program, p. XI -8 (Note that the Brown Book should be amended to include $10,000 for printer
replacements.); Pre -K -12 Master Plan, p. XI -13; Food Service Equipment & Software, p. XI -13; and,
Classroom Furniture, p. XI -14.
The Committee unanimously (8 -0) supports these requests.
Page 38 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Article 19:
Funds Requested
Funding
Committee
Appropriate for
Source
Recommendation
Remodeling (Student Lockers)
$160,000
GF (Debt)
Public Facilities
(Bowman/Estabrook)
Capital Projects
$2188,750
See below
See below
Project Description
Amount Requested
Funding Source
Committee Recommends
(a) Extraordinary Repairs and
Remodeling (Student Lockers)
$160,000
GF (Debt)
Approve (8 -0)
(Bowman/Estabrook)
(b) Phase 2 Mechanical System
$1,290,000
GF (Debt)
Approve (8 -0)
Replacement (Clarke)
(c) System -wide School
$200,000
GF (Debt)
Approve (8 -0)
Buildings Roofin Renovations
(d) Auditorium Remodeling
$125,000
GF (Debt)
Approve (8 -0)
(Diamond)
(e) Extraordinary Repairs
$65,000
GF (Debt)
Approve (8 -0)
(Clarke & Diamond)
(f) Multi - Disciplinary Support
Team (MST) Construction (High
$80,000
GF (Cash)
Approve (8 -0)
School)
(g) Safe Parent Pick Up and
$65,000
GF (Cash)
Approve (8 -0)
Parkin (Bridge & Estabrook)
(h) Remove Estabrook Oil Tank
$50,000
GF (Cash)
Approve (8 -0)
(i) Building Envelope
$153,750
GF (Cash)
Approve (8 -0)
Munroe Fire Prevention
$579,550 [if not
System
CPA- funded
GF (Debt)
Pending
under Art 9(g)]
(k) Fire Headquarters Redesign
$40,000
GF (Cash)
Approve (8 -0)
(1) Senior Center Design,
Unknown [if not
Renovation and Expansion
CPA - funded
TBD
Pending
under Art. 9(h)]
As a result of votes at the fall, 2006 Special Town Meeting and the 2007 Annual Town Meeting, the
Town has combined the management, maintenance and administrative functions associated with both
school and municipal facilities into one single, unified, facilities department. In addition to having
supervision and authority over maintenance and custodial services, this Department oversees and
administers major capital projects. Consequently, for the first time, Town Meeting is presented with this
Article, requesting appropriations for a number of capital projects to be implemented and conducted
under the aegis of the Public Facilities Department.
The total amount requested under this Article is $2,228,750. Not included in this figure are appropriation
requests for the Munroe fire prevention system (item (j)) and for the Senior Center design, renovation and
expansion study (item (1)). CPA funding for these projects has been requested under, respectively, Article
9(q) and (h). If CPA funding for either of these two projects is not recommended, or not approved by
Page 39 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Town Meeting, either or both may then be presented under this Article and the amount of funds requested
will increase accordingly.
Section XI of the Brown Book and the forthcoming report of the Capital Expenditures Committee contain
detailed descriptions, explanations and analyses of each of the requests comprising this Article. They can,
essentially, be broken down into three component elements: (1) items (a) through (e) which request debt
financing; (2) items (f) through (h) which are cash funded school projects; and (3) items (i) and (k) which
are cash funded municipal projects.
An appropriation in the amount of $1,840,000 is requested under M.G.L., c. 44, sec. 7(3A), for
remodeling, reconstructing or making extraordinary repairs. Included in this request are the purchase and
installation of lockers at Bowman and Estabrook ($160,000), phase 2 of the mechanical system
replacement at Clarke for conversion from electric heat to natural gas ($1,290,000), system -wide school
roof extraordinary repairs ($200,000), auditorium repairs at Diamond ($125,000), and various
extraordinary repairs at Clarke and Diamond ($65,000). All of these items are to be funded through debt
financing. More detailed information concerning each of these projects can be found in the Brown Book,
pp. XI4, 5 and 8 -10.
A total of $195,000 is requested for items (f) through (h). These requests seek appropriations for the
construction of three rooms at Lexington High School for private consultation as part of the MST
program ($80,000), the study of traffic patterns at Bridge School and the design of improvements to
enhance safety ($65,000), and the removal of an aged underground fuel oil storage tank at Estabrook
($50,000). These items are to be funded from Free Cash. More detailed information concerning each of
these projects can be found in the Brown Book, pp. XI4, 12 and 13.
Finally, $193,750 is sought for items (i) and (k), which seek, respectively, $153,750 for remodeling,
reconstructing and making extraordinary repairs to Town buildings (an additional $212,500 in CPA funds
is sought under Article 9(k), (1) and (m)) and $40,000 for a study to determine the best utilization and
redesign of space at the Fire Station at 45 Bedford Street. These items are to be funded from Free Cash.
More detailed information concerning these two projects can be found in the Brown Book, pp. XI4, 12,
14 -15 and 16.
The Committee unanimously () supports requests (a) through (i) and (k). Recommendations are pending
on 0) and (1).
Article 20:
Funds Requested
Funding
Committee
Appropriate for
Source
Recommendation
Affordable
$50,000
FC
Approve (8 -0)
Housing Purposes
The 2004 Annual Town meeting approved a zoning article allowing expansion at Brookhaven at
Lexington. As part of the development plan, Brookhaven agreed to make two $50,000 payments to the
Town for the purpose of supporting affordable housing. The first of the two payments was made to the
General Fund in October, 2006 and the second was received in FY2008 and resides in a special reserve
fund. The Board of Selectmen is recommending that this payment be appropriated by Town Meeting for
use by LeXHAB.
The Committee unanimously (8 -0) supports this request.
Page 40 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Article 21:
Funds Requested
Funding
Committee
Appropriate
Source
Recommendation
Money- Laconia
$400,000
FC
Approve (8 -0)
Street (Citizens
$3,650
GF
Pending
Article)
Article 24 of the 2004 Annual Town Meeting, a citizen article, requested Town Meeting to authorize the
Town to take and accept Laconia Street as a public way and, so that it would qualify for acceptance, to
approve an appropriation to upgrade and reconstruct the street. After Town Meeting's approval, the
Town began the acceptance process. This required a legal description of the land to be accepted, for
which an engineering survey was necessary. Town staff requested the Article's citizen sponsors to
orange for the survey.
The survey was undertaken and completed in the summer of 2004. The engineer's invoice of $3,650 was
paid by two Laconia Street families. The Town did not reimburse the families and the survey cost was
not included in the betterment charges assessed by the Town on all Laconia Street abutters in 2007.
There are 30 abutters.
This Article seeks reimbursement of the $3,650. All Laconia Street abutters benefited from the Town's
taking and acceptance. They also benefited from the survey since, without it, the taking and acceptance
could not proceed. Had the Town reimbursed the two families for the survey cost at the time it was paid,
that amount would have been proportionally shared in the betterments assessed in 2007.
There appear to be two alternatives to deal with this: (1) reimburse the two families and then subsequently
impose a new, or adjusted, betterment on all abutters, or (2) reduce the betterments assessed to the two
families to reflect their payment of the engineer's invoice. The Appropriation Committee believes that
the former is preferable.
Town Counsel has agreed that the requested reimbursement is a permissible and legal expense.
At press time this committee was not aware of a specific funding source so its recommendation is
pending.
Article 22:
Funds Requested
Funding
Committee
Appropriate for
Source
Recommendation
Post Employment
$400,000
FC
Approve (8 -0)
Benefits
Retired Lexington employees receive two types of post- employment benefits: a pension and health
insurance. Annual appropriations to the pension fund and to the health care trust fund (under the Shared
Expenses portion of the municipal operating budget article) cover the costs of current retirees' benefits
(with the exception of teachers, who receive their pension from the State pension fund; their health
benefits, however, are provided by the Town). In the case of both types of benefits, there is a future
liability (for current and past employees who have not yet reached retirement age) that is being incurred.
The annual appropriation for the pension fund includes an amount for the funding of the future pension
liability, but up to now, no similar provision has been made for the future health benefit liability.
The Government Accounting Standards Board (GASB) Statement 45 (GAS1345) dictates that
municipalities begin reporting the unfunded liability for retiree health benefits. This is not a requirement
Page 41 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
to begin funding the liability, but simply to determine the amount of the liability and record it as part of
the annual audit. Lexington was required to being reporting its circa $100 million liability this year
(FY2008).
This article requests that $400,000 of Free Cash (which includes $281,966 in Medicare Part D rebate
receipts) be applied towards funding this liability. These are funds Lexington has received, from the
Federal government in FY2007, to partially offset the prescription drug benefit we provide to retirees in
place of the Medicare Part D prescription benefit. It is expected that this will be an annual payment to the
Town as long as we continue to offer a prescription drug benefit to retirees.
The Committee unanimously (8 -0) supports this request.
Article 23: Rescind
Funds Requested
Funding
Committee
Prior Borrowing
Source
Recommendation
Special Education
Authorizations
None
See below
Pending
Information on potential rescissions of bond authorizations was not available at the time of this report.
The Committee will issue a supplemental report when information becomes available.
Article 24:
Appropriate to
Specified
Funds Requested
Funding
Source
Committee
Recommendation
$350,000 for
Stabilization Funds
Special Education
Stabilization Fund
See below
Approve (8 -0)
and $65,093.11 for
TDM/Public
Transportation
Stabilization Fund
This article will establish a new Special Education Stabilization Fund. This fund is intended to provide a
vehicle for setting aside reserves to help cover unexpected out -of- district Special Education expenses that
exceed budget. A related goal is greater transparency around the out -of- district Special Education budget
component by segregating this expense item and bringing budget overruns to Town Meeting for a two -
thirds vote (required for appropriations from a Stabilization Fund).
This article requests an initial appropriation of $350,000 into this new stabilization fund. The source of
funds is an identified surplus in the FY2008 School budget. The Superintendent and Town Manager have
indicated a goal of building a $1,000,000 reserve to help buffer the regular education budget from
extraordinary and unforeseen increases in out -of- district Special Education expenses.
This article also requests the transfer of $65,093.11 from the Lexpress Transportation Demand
Management (TDM) Special Revenue account to the Transportation Demand Management/Public
Transportation Stabilization Fund. These are payments received year -to -date from Patriot Partners and
Avalon Bay that are being deposited, under this article, into the appropriate stabilization fund so they are
available to support the FY2009 operations for Lexpress under Article 4.
The Committee unanimously (8 -0) supports these requests.
Page 42 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Article 25:
Funds Requested
Funding
Committee
Appropriate for
Source
Recommendation
Green Guides;
Stabilization Fund
$1,000,000
FC
Approve (8 -0)
This Article seeks to transfer $1,000,000 of the $4,861,516 in certified Free Cash to the unrestricted
Stabilization Fund. This will bring the balance of the Stabilization Fund to $6,571,158 (not including
interest for the period January 1, 2008 through June 30, 2008), representing 5.17% of the prior year's
General Fund revenues. The target balance for the Stabilization Fund, as recommended by the
Selectmen's Ad Hoc Fiscal Policy Committee and endorsed by Town staff, is 7% of General Fund
revenues, an amount intended to be sufficient "to buffer the General Fund from the impact of two to three
years of reduced state aid and declining local receipts." (March 15, 2006 report of the Ad Hoc Fiscal
Policy Committee.)
The Committee unanimously (8 -0) supports this request.
Article 26:
Funds Requested
Funding
Committee
Appropriate for
Source
Recommendation
Green Guides;
Prior Years'
None at press time
To be determined
Pending
Unpaid Bills
not known at press
Article 27: Amend
FY2008 Operating
Budget
Funds Requested
Funding
Source
Committee
Recommendation
$750 for Battle
Green Guides;
additional amounts
To be determined
Pending
not known at press
time
This is an annual placeholder in the Warrant to allow Town Meeting to fund unforeseen expenses in the
current fiscal year budget (FY2008). Appropriations under this article are one of several mechanisms
available for dealing with budget surprises during the course of a fiscal year. Monies in the Reserve Fund
(funded in FY2008 at $469,868) are also available, with the approval of the Appropriation Committee, to
cover extraordinary, unforeseen expenses. Payments from this fund are typically made in the last few
weeks of the fiscal year. (For further information about the Reserve Fund, see the discussion under Shared
Expenses.) Municipalities may also now make end -of -year transfers of unexpended balances in one
departmental line item to cover overages in other line items in the same department, provided that an
individual transfer does not exceed 3% of the source line item.
Page 43 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
There are no requests for School budget appropriations under this article, however, Municipal budget
requests, amounts yet to be determined, are anticipated in addition to the $750 requested for Battle Green
Guides.
Article 28:
Funds Requested
Funding
Committee
Appropriate for
Source
Recommendation
Authorized Capital
$60,000
FC
Approve (8 -0)
Improvements
At the 2007 Annual Town Meeting, a motion was made and approved under Article 29 to appropriate
$265,000 for Recreation Capital Projects as follows:
a) Center Basketball Court Reconstruction - $85,000 to engineer and reconstruct the double
basketball court at the Center Recreation Complex. The project will include grinding down
the existing basketball courts, address drainage, court reconstruction and install new
standards, backboards, rims and site amenities.
b) Valley Road Tennis Court improvements - $130,000 to grind and rebuild the Valley
Road tennis courts, replace the tennis court fence and to purchase site amenities.
c) Park Improvements - Athletic Fields - $50,000 for funds to rehabilitate the athletic fields
at Bowman School.
The Capital Expenditures Committee was notified in September 2007 of the need for a supplemental
appropriation to accomplish the work for which funds had been appropriated under subsections (a) & (b)
of Article 29. The October 24 minutes of the Capital Expenditures Committee include:
[2007 Annual Town Meeting Article] 29(b) Valley tennis courts and 29(a) Center
Basketball courts will need a supplemental appropriation in FY09 since the bids all came in
too high. $215K was appropriated, but the bids came in at 230 -257AK (Center BBall @
$149K, Valley TC @ $108K). Some of the $215K appropriation has already been spent on
architects' fee. They estimate an additional $60K to $70K will be needed. We asked if
Valley could be done on its own since the appropriation covers that, but since the projects
were consolidated, it can't be broken out without rebidding and there are economies of scale
involved.
The projects have been put out for rebid with a close date of April 24, 2008.
The Committee unanimously (8 -0) supports this request.
Page 44 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Article 29: Use Of
Funds Requested
Funding
Committee
Funds to Reduce
Source
Recommendation
N/A
N/A
N/A
the Tax Rate
Each year, the Department of Revenue certifies a Free Cash number for each municipality in the State.
This number represents the available General Fund balance as of July 1, after the close of the prior fiscal
year. Lexington's Free Cash balance as of July 1, 2007 is $4,861,516. In the FY09 budget,
approximately $2.6 million of Free Cash is earmarked to fund recurring operating budget expenses.
Another $1 million is proposed for appropriation to the General Stabilization Fund, approximately
$842,000 is proposed for use for Capital projects, and $400,000 is proposed for initial funding of the
Post- Employment health benefit liability.
In prior years, this Article has been the vehicle for appropriating Free Cash. This year, as in the last two
years, all appropriations of Free Cash have occurred under the relevant budget articles: Article 4
(Operating Budget), various Capital articles (15, 18, 19, 28), Article 22 (Post - Employment Benefits),
Article 25 (Stabilization Fund) and Article 27 (FY2008 Operating Budget). Accordingly, no funds are
requested under this article.
This article will be indefinitely postponed.
Article 32: Amend
Funds Requested
Funding
Committee
General Bylaw —
Source
Recommendation
Abatement of
Contracts
None
N/A
Approve (8 -0)
Interest
The warrant article seeks an amendment to Chapter 107 (Reports and Fees) of the Code of the Town of
Lexington to grant the Board of Selectmen the authority to abate interest charges on overdue town
charges if circumstances warrant it. There are situations, primarily water and sewer, where bills are
contested and ultimately adjusted. Interest has accrued during the resolution period and the Board of
Selectmen would like the ability to also abate the interest that accrued during the resolution period, when
appropriate.
The Committee unanimously (8 -0) supports this bylaw change.
Article 33: Amend
Funds Requested
Funding
Committee
General Bylaw —
Source
Recommendation
Terms for Certain
Contracts
None
N/A
Approve (8 -0)
For the most part, contracts with terms extending beyond 5 years have to be approved by Town Meeting.
Approvals by Town Meeting have been given in the past to extend those terms – as an example, the 2007
Page 45 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
Town Meeting approved Article 11 authorizing terms for certain contracts for rental of town buildings
and for transportation services for more than five years. These approvals have not been incorporated into
the Town bylaws. Additionally, the timing of Town Meeting does not facilitate the ability to finalize
contracts as the town contracts are on a fiscal year basis.
This article seeks to provide flexibility in negotiating maximum lengths of vendor contracts as well as to
codify terms for which certain contracts can be issued by the Town Manager by an amendment to Chapter
32 of the Code of the Town of Lexington. It is also important to note that all multi -year contracts contain
a provision that they are subject to annual appropriation, so Town Meeting does retain rights with respect
to the ultimate length of the contracts.
The Committee unanimously (8 -0) supports this bylaw change.
Article 37: Amend
Funds Requested
Funding
Committee
Tree Bylaw
Source
Recommendation
(Citizens' Petition)
None
N/A
Approve (7 -1)
The Town incurs expenses every year to comply with the tree bylaw, and we believe that some level of
revenue should be raised to cover these expenses. Furthermore, the fee may provide at least a modest
incentive to preserve trees.
The Committee, by a vote of 7 -1, supports this bylaw change.
Article 44: Reconfirm
Funds Requested
Funding
Committee
Votes Petitioning
Source
Recommendation
the General Court
None
N/A
Approve (8 -0)
Each legislative session of the Massachusetts Legislature, also known as the General Court, runs for two
years. The Senate has adopted a Rule that ". . . whenever a new [Home Rule] petition for local legislation
is filed in a new Legislature, it ordinarily must be based upon a new local approval – not the old local
approval used to file a bill in a previous legislature." This necessarily means that, if a Home Rule petition
filed during a legislative session is not enacted into law by the end of that session, then it will not be
considered or taken up during any following session. Consequently, it is necessary, once the legislative
session comes to an end, that the petition be presented and refiled in the next session if the Town wishes
to pursue it. A prerequisite for that filing is a new vote by Town Meeting readopting and confirming its
earlier action.
The four Home Rule petitions, previously approved by Town Meeting, are as follows:
a. Municipal Lighting Plant (Article 14 approved at 2005 Annual Town Meeting)
b. Amend referendum scheduling provisions for approving or reversing a Town Meeting vote
(Article 11 approved at 2006 Annual Town Meeting)
c. Deleting separate mail notice to Town Meeting Members (Article 8 approved at 2007 Annual
Town Meeting)
Page 46 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
d. Ease Income and age limits for property tax deferrals (Article 23 approved at 2007 Annual
Town Meeting)
The Appropriation Committee supported Article 14 at the 2005 Annual Town Meeting and Article 23 at
the 2007 Annual Town Meeting. The Committee continues in its support of these petitions and therefore,
unanimously (8 -0) supports this request.
Article 48: Munroe
Funds Requested
Funding
Committee
School Disposition
Source
Recommendation
None at press time
Pending
Page 47 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
APPENDIX A: 3 -Year Budget jection
This appendix is included to provide a multi -year perspective of town finances. The numbers we use to
project revenue and expenses are not meant to be targets or goals, but are our best guesses as to how they
may play out over the coming years. The projections can help us understand the challenges that Lexington
will face if, as anticipated in the numbers below, revenue does not grow as fast as the expenses for "same
service" budgets. The projections are also an opportunity to obtain a better quantitative understanding of
known trends and cost drivers.
Table A -2 shows actual, appropriated, budgeted, and projected amounts for the town budgets for FY2007
through FY2012. While we have provided actual, appropriated, and budgeted amounts for all sectors we
have not projected revenues and expenses for budget lines that have direct offsets, i.e., exempt debt,
enterprise fund direct expenses, and grants and revolving funds, as they do not affect the bottom line.
These projections show a $4.5M deficit in the FY2010 budget. That gap will need to be closed by
revenue additions and/or by expense reductions.
Table A -1 illustrates how differences in the annual growth of certain budget items by 1% of the amount
for the corresponding item in the previous fiscal year would affect the projected budgets. For example,
the Table shows that a 1% change in the cost of Lexington Public School personal services from FY2009
to FY2010 is equivalent to a change of that line item in FY2010 by $544,080. The expenses for this
particular item are projected to grow by 5.75% which is made up of a 3.5% increase due to step and lane
changes and, for projection purposes because there is not a settled contract, a 2.25% COLA increase. So,
if the contract for FY2010 is settled with a COLA of 1.25%, i.e., 1% less than we projected, then the LPS
personal services line would decrease by $544,080 relative to what we have shown.
Revenue growth, excluding any override amounts, in most years is largely limited to
Proposition 2 1 /2 allowed growth: 2.5% of the tax base excluding exempt debt, projected to be
about $2.7M in FY2010.
Tax growth from new /improved real estate and personal property — projected to be about $1.6M
in each of the next few years plus an additional amount attributed to the anticipated Shire
development. Note that the projected amount is $300,000 lower than that actually expected to
provide in part for the snow and ice deficit that occurs in most years.
Other assumptions in revenues are:
A slight growth in local receipts —while FY2010 anticipates an increase, the uncertain economy
is anticipated to adversely affect motor vehicle excise tax, building permits and investment
income.
Available Funds are projected to be $4.05M. It is made up $1.5M of recurring Free Cash and
$550K of recurring Parking Meter, Cemetery, and other small funds; and is applied to operating
expenses. $2M of non - recurring Free Cash is used for building the stabilization funds, for
funding the OPEB liability, Senior Tax write -off program, and capital. Free Cash represents the
unexpended and unencumbered balance from previous years. It may come from the receipt of
more revenue than expected, or year -end close outs of line items with unspent appropriations.
This level of recurring vs. non - recurring funds roughly mirrors the levels in FY2009.
State Aid is expected to grow for FY2010 and FY2011 as the later phases of the Chapter 70 Aid
"catch -up" payments are implemented. However, uncertainty of lottery payments and a faltering
economy temper our projection of the growth of State Aid and so we show level funding in
FY2012.
Page 48 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
The Town continues to experience expense growth in a number of areas that exceeds the typical annual
growth in revenues. These include the following growth factors, as estimated by the Appropriation
Committee:
• School cost of living and step increases: 5.75%
• School general expenses: 2.5%
• Out of district SPED: 10%
• Minuteman Regional High School: 12%
• Municipal cost of living and step increases: 3.55%
• Municipal general expenses: 3%
• Benefits and Insurance: 8.6%
• Utilities: 7%
Debt Service: jumps in FY2010 to cover Woburn St., and then drops as debt is retired and smaller
projects are funded.
Together, these revenue and expense factors lead to an imbalance between available revenues and
expenses for level services. This imbalance is shown in line 60 in the Balance (Deficit) line. It should be
noted that these gaps could be closed by an override, service reductions, suspending appropriations to the
stabilization fund, new efficiencies, increases in revenues other than by an override, or some combination
of these methods.
Table A-1: I% Variation
The effect of a 1% variation in the cost assumptions above
Page 49 of 50
FY10
LPS Personal Services
$
544,080
LPS General Expenses
$
39,981
Municipal Personal Services
$
180,960
Municipal Expenses
$
75,089
Shared Expenses - Benefits
$
217,421
Facilities Personal Services
$
33,033
Utilities
$
32,582
Page 49 of 50
APPROPRIATION COMMITTEE REPORT TO 2008 ATM —March 19, 2008
I able A -2: 3 -Year Budget Projections from the Appropriations Committee
Revenue Summary
1 Tax Levy
FY 2007
Actual
Appropriated
FY 2008
FY 2009
Budget
$ 18.738.453
FY2010
projected
$ 20.092.498
FY2011
projec
FY2012
projected
6.738.101
$ 7.242.747
$ 7.508.949
$ 7.703.940
$ 7.951.259
$ 8.198.579
3a sub -total Municipal
z
Property Tax Levy
$
89.868.589
$
96.012.202
$ 104.879.746
$
109.181.083
$
113.907.502
$
119.496.247
3
Allowable 21/2 %inc.
$
2.246.715
$
2.400.305
$ 2.620.337
$
2.729.527
$
2.847.688
$
2.987.406
a
New Tax levy Growth
$
2.036.789
$
2.485.650
$ 1.681.000
$
1.996.892
$
2.741.058
$
2.764.476
s
Voter Approved Override
$
1.858.435
$
3.981.589
s
Taxkv Tenit
$
96.010.528
$
104.879.746
$ 109.181.083
$
113.907.502
$
119.496.247
$
125.248.129
e
Exempt Debt
$
5.127.256
$
5.372.874
$ 5.691.229
direct offset
direct offset
direct offset
io
sub -iota /Tax Levy
$
101.137.784
$
110.252.620
$ 114.872.312
$
113.907.502
$
119.496.247
$
125.248.129
i1
State Aid
$
8.304.953
$
9.064.275
$ 9.670.275
$
10.070.275
$
10.470.275
$
10.470.275
iz
Local Receipts
$
12.910.181
$
9.173.000
$ 10.156.258
$
10.207.039
$
10.258.074
$
10.309.365
13
Available Funds
$
4.923.000
$
4.216.097
$ 5.620.168
$
4.050.000
$
4.050.000
$
4.050.000
14
Revenue Offsets
$
(1.530.137)
$
(1.897.006)
$ (1.798.686)
$
(1.825.995)
$
(2.349.571)
$
(1.873.148)
15
Total General Fund
$
125.745.781
$
130.808.986
$ 138.520.327
$
136.408.821
$
141.925.025
$
148.204.622
15
Other Revenues
v
Revolving Funds
$
635.992
$
976.742
$ 2.012.000
direct offset
direct offset
direct offset
1e
Grants
$
173.390
$
122.732
$ 122.732
direct offset
direct offset
direct offset
19
Enterprise Funds (Direct)
$
15.445.321
$
14.205.160
$ 15.374.904
direct offset
direct offset
direct offset
zo
Enterprise Funds (Indirect)
$
1.772.313
$
1.752.885
$ 1.710.887
$
1.683.936
$
1.666.065
$
1.750.511
u
sub -iota /other Re venues
$
18.027.016
$
17.057.519
$ 19.220.523
$
1,683,9361
$
1,666,0651
$
1.750.511
a Total Revenues
$
143.772.797
$
147.866.505
$ 157.740.850
$
138.092.757
$
143.591.090
1 $
149.955.133
23 Expense Summary
za Education
FY 2007
Actual
Appropriated
FY 2008
FY 2009
Budget
FY2010
pro ectetl
FY2011
projected
FY2012
projected
zs
Lex. Pub Schools Compen.
$
46.254.686
$
50.936.007
$ 54.407.961
$
57.536.419
$
60.844.763
$
64.343.337
25
Lex. Pub Schools Expenses
$
5.284.264
$
4.526.318
$ 3.998.058
$
4.098.009
$
4.200.460
$
4.305.471
zJ
Out -of- District SPED
$
5.183.579
$
6.007.636
$ 6.142.170
$
6.758.020
$
7.095.638
$
7.450.794
26
sub- tota/Lex. Fub. Schools
$
56.722.529
$
61.469.961
$ 64.548.189
$
68.392.448
$
72.140.860
$
76.099.602
29
Minuteman Reg. School
$
1,024.817
$
1.200.438
$ 1.510.598
$
1.695.700
$
1.917.371
$
2.139.043
3o
sub -total Educabm
$
57.747.346
$
62.670.399
$ 66.058.787
$
70.088.148
$
74.058.232
$
78.238.645
31
Municipal
32
35
Shared Expenses
35
Benefits & Insurance
$
21.720.931
$
24.669.043
$ 26.793.252
$
28.634.045
$
31.061.622
$
33.722.799
37
Debt (within -levy)
$
3.760.126
$
3.798.137
$ 4.017.541
$
4.545.587
$
4.350.000
$
4.350.000
3e
Reserve Fund
$
$
469.868
$ 550.000
$
550.000
$
550.000
$
550.000
39
Facilities
$
8.139.593
$
8.639.773
$ 8.499.664
$
8.903.150
$
9.328.508
$
9.777.057
40
sub - total Shared Expenses
$
33.620.650
$
37.576.821
$ 39.860.457
$
42.632.782
$
45.290.130
$
48.399.856
al
Revolving Funds
$
635.992
$
976.742
$ 2.012.000
direct offset
direct offset
direct offset
az
Grants
$
173.390
$
122.732
$ 122.732
direct offset
direct offset
direct offset
43
Capital & Reserves
as
Cash Capital (inc of roads)
$
1.195.000
$
1.355.000
$ 1.520.750
$
1.600.000
$
1.600.000
$
1.600.000
as
Stabilization Fund
$
2.650.000
$
1.000.000
$ 1.000.000
$
1.000.000
$
1.000.000
$
1.000.000
as
Other (SrWorkOff,OPEB)
$
86.000
$
40.750
$ 495.000
$
795.000
$
795.000
$
795.000
m
sub -total Ca ital & Reserves
$
3.931.000
$
2.395.750
$ 3.015.750
$
3.395.000
$
3.395.000
$
3.395.000
46
Enterprise Funds
ae
$
5.628.900
$
5.764.116
$ 6.545.020
direct offset
direct offset
direct offset
30
ewer
$
6.681.282
$
6.779.913
$ 7.148.800
direct offset
direct offset
direct offset
;i
MCapital
$
1.637.103
$
1.636.131
$ 1.676.083
direct offset
direct offset
direct offset
32
ital
$
75.000
$
25.000
$ 5.000
direct offset
direct offset
dire ct offset
33
rise Funds
$
14.022.285
$
14.205.160
$ 15.374.903
direct offset
direct offset
direct offset
34
Exempt Debt
35
Municipal
1.299.188
$
1.445.451
$ 2.631.247
direct offset
direct offset
direct offset
ss
School
3.828.068
$
3.927.423
$ 3.059.982
direct offset
direct offset
direct offset
33
s�- totalExempt Debt
$
5.127.256
$
5.372.874
$ 5.691.229
direct offset
direct offset
direct offset
se
Total Expenses
$
137.809.073
$
147.821.203
$ 157.740.850
$
142.558.322
$
150.098.288
$
158.324.577
so Balance (Deficit)
$
5,963,724
$
45,302
$ -
$
(4,465,566)
$
(6,507,198)
$
(8,369,444)
Municipal Compen.
$
15.813.054
$ 17.257.978
$ 18.096.043
$ 18.738.453
$ 19.403.668
$ 20.092.498
33 Municipal Expenses
$
6.738.101
$ 7.242.747
$ 7.508.949
$ 7.703.940
$ 7.951.259
$ 8.198.579
3a sub -total Municipal
$
22.551.154
$ 24.500.725
$ 25.604.992
$ 26.442.392
$ 27.354.927
$ 28.291.076
Page 50 of 50