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HomeMy WebLinkAbout2006 AC Rpt STM1APPROPRIATION COMMITTEE TOWN OF LEXINGTON �V9 M RN ��G � x ; _ m o a x a s V o &PRI L 19 2E xIN01 0 REPORT TO THE 2006 SPECIAL TOWN MEETING #1 (STMT) November 29, 2006 at 7:30 PM Released November 28, 2006 Appropriation Committee Members — Fiscal Year 2007 Alan M. Levine Chair • Deborah Brown Vice -Chair Robert N. Addelson (ex- officio; non - voting) • John Bartenstein • Rodney E. Cole Richard Enrich • Pam Hoffman • David G. Kanter • Michael J. Kennealy • Eric Michelson APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 Summary of Warrant Article Recommendations 2006 Special Town Meeting #1 Abbreviations: GF = General Fund; EF = Enterprise Fund; RF = Revolving Fund CPA = Community Preservation Act Fund; BAN = Bond Anticipation Note An entry of `Indefinitely Postpone" in the right -hand column merely signifies our expectation. Ar- Funds Requested Funding Committee ticle Title Source Recommendation $1,073,008 + $52,800 Amend FY 2007 Intrafund Transfer 2 Operating Budget (subject to adjustment; GF Approve (9 4) see discussion for Elements ii & iii) $513,318 in reductions EF $500,000 intrafund EF 3 Amend FY 2007 transfer Approve (9 -0) Enterprise Fund Budgets $55,000 increase GF�EF (see discussion for details on each) GF ($20,000) (i): Approve (9 -0) (payment from ($20,000) 4 Community Preservation $149 000 Jefferson Union Realty (n)(a) & (c): Approve Fund Trust) (9 -0) ($85,000) (ii)(b): Disapprove CPA (7-2) ($44,000) ($129,000) Appropriate For GF (payment 6 Affordable Housing $50,000 from Approve (9 -0) Purposes Brookhaven at Lexington) Accept MGL Chapter 71, 7 Section 37M (Joint None Approve (9 -0) Facilities Department) 8 Appropriate for Senior $11,000 GF Approve (9 -0) Service Program Page 2 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 Contents Summary of Warrant Article Recommendations ........................................................... ............................... 2 hitroduction......................................................................................................................... ............................... 4 Warrant Article Analysis and Recommendations .......................................................... ............................... 5 Article 2: Amend FY2007 Operating Budget ................................................... ..............................5 Article 3: Amend FY2007 Enterprise Funds Budgets ...................................... ..............................7 Article 4: Community Preservation Fund ........................................................ .............................10 Article 6: Appropriate For Affordable Housing Purposes ............................... .............................13 Article 7: Accept MGL Chapter 71, Section 37M (Joint Facilities Department ) ..........................13 Article 8: Appropriate for Senior Service Program ......................................... .............................14 Page 3 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 Introduction In this report, we give recommendations on those articles to be acted upon in Special Town Meeting No. 1 that involve substantial financial considerations. (Because of'potentially conflicting timing issues, the Article to allow Town Meeting to appropriate funds for a new Department of'Public Works facility is in the Warrant for Special Town Meeting No. 2 —which will he addressed by this Committee in a separate report.) The current status of the Town's revenue streams is useful background for the financial articles. We are pleased to acknowledge the Town Manager's report that additional revenues have been or will be received for the current fiscal year (FY2007) relative to the projections assumed for the 2006 Annual Town Meeting last spring. The net total of those additional revenues is $991,440. They are comprised of $200,000 in new growth beyond that initially budgeted, increased State aid of $732,229, and revenue offsets of $171,211 (for a sub -total of $1,103,440). The increases are offset by hotel/motel tax revenues that are $112,000 lower than budgeted. If these additional revenues are not appropriated before the FY2007 tax rate is set in December, they become unavailable for appropriation until Free Cash is certified by the State some time in FY2008, probably about November 2007. Other possible sources of funds at this Special Town Meeting include Free Cash, the Stabilization Fund, the Reserve Fund, and Community Preservation Act (CPA) funds. Our analysis and recommendations on each financial Article may be found below Page 4 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 Warrant Article Analysis and Recommendations Article 2: Amend FY2007 Operating Budget Funds Requested Funding Source Committee Recommendation $1,073,008 + GF Approve (9 4) $52,800 Intrafund (subjectto Transfer (subject $248,789 GF Approve (9 -0) to adjustment; see amount of GF Approve (9 -0) discussion for additional Elements ii & iii) METCO This Article seeks supplementary appropriations for the Lexington Public Schools operating budget for FY2007. It is composed of three elements. Project Description Amount Funding Committee Recommends Requested Source (i) Lexington Public (subjectto Schools Additional Fee $248,789 GF Approve (9 -0) Revenue amount of GF Approve (9 -0) This is a housekeeping item. Certain school - related fees for FY2007 were planned to be increased to generate additional revenue to augment the school budget if the June 2006 school - override questions failed. As those questions did fail, this element requests an increase in the appropriation of the School Department in the amount of $248,789 which is to be financed by those fees, which have been collected or are expected to be collected this school year. If not approved, the School Department will not be able to spend these funds. This Committee unanimously (9 -0) supports the request. Project Description Amount Requested Funding Source Committee Recommends $824,219 (subjectto (ii) Lexington Public exact Schools Supplemental Special amount of GF Approve (9 -0) Education (SPED) Appropriation additional METCO ant) This element seeks a supplementary appropriation to address a projected shortfall in the FY2007 School budget of $915,219. Unexpected increases in SPED expenses have precipitated this deficit. SPED expenses have been, and continue to be, key drivers in the budget for the Lexington Public Schools. The three main components of the SPED budget are: 1) instructional assistants (tutors) to help SPED students in the classrooms; 2) out -of- district tuition for those students who cannot be served by a program in Lexington, and 3) transportation for these students. The FY2007 School budget approved at the 2006 Annual Town Meeting included the sums of $2,100,203, $3,640,000, and $740,000, respectively, for these line items. Page 5 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 The approved School budget included a reserve of about $260,000 to cover possible increased costs in the SPED program that were not known and could not reasonably be anticipated at the time the budget was prepared for the 2006 Annual Town Meeting. Unfortunately, this reserve was quickly outstripped by what have proven to be volatile, unpredictable, costs associated with the mandates imposed by State and Federal laws, but not adequately funded by either the State or Federal governments. The school administration is currently projecting after having applied that reserve —a total FY2007 SPED deficit of $1,035,737 ($115,203 for SPED instructional assistants; $788,778 for out -of- district tuition; and $131,756 for SPED transportation). (That projection does not include any further changes in SPED placements between now and the end of this school year.) Pursuant to its March 29, 2006, understanding with the Board of Selectmen and the Appropriation Committee, the School Committee has applied available surpluses in other school accounts (projected savings in energy and in some other items) to reduce the projected deficit in the FY2007 School budget to $915,219. On November 16, 2006, the School Committee also voted to apply a recent and unanticipated increase of approximately $91,000 in the METCO grant from the State to further reduce the deficit to approximately $824,219. This Committee fully concurs with these School Committee actions. Consistent with this Committee's recommendations, the resulting reduced deficit is being addressed now rather than at the 2007 Annual Town Meeting next spring and by appropriating the full amount from some of the additional revenues which have been realized since the 2006 Annual Town Meeting rather than from Free Cash, the Stabilization Fund or the Reserve Fund. (The net total of those additional revenues is $991,440 as summarized in the Introduction.) We feel it is critical that the School Department learn now if they will not have the additional funding so program adjustments can be made now instead of having the uncertainty stretch later into the school year with what would then have to be more severe adjustments made at the end of the school year. With additional revenues available, monies in the Stabilization Fund and in the Reserve Fund should be preserved for unforeseen contingencies that might occur later in FY2007. This Committee unanimously (9 -0) supports the request. Project Description Amount Requested Funding Source Committee Recommends Intrafund GF: Line 2130, (iii) Lexington Public Transfer of Group Schools Unemployment about Insurance, to Approve (9 -0) Compensation $52,800 Line 2140, Unemployment The Town currently estimates unemployment compensation spending will exceed the budget adopted at the 2006 Annual Town Meeting, which had included an estimate for the staff layoffs and reduction in positions if the June 2006 School override questions failed which they did. At the time of the writing of this report, the additional funding needed is $52,800, but it is anticipated that increase can be funded with a transfer of the same amount from a projected surplus in the health- insurance budget. This Committee unanimously (9-0) supports the requested transfer as well as any net amount, if needed. Page 6 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 Article 3: Amend FY2007 Enterprise Funds Budgets Funds Requested Funding Source Committee Recommendation $513,318 in EF Approve (94) $4,032,517 reductions Sewer $ 5,782,838 $5,633,833 $500,000 intrafund EF $10,124,668 $9,666,350 transfer $55,000 increase GF�EF (see discussion for details on each) This article proposes three housekeeping adjustments to the water and sewer enterprise fund budgets approved at the 2006 Annual Town Meeting. The first is to amend the appropriations for the FY2007 Massachusetts Water Resources Authority (MWRA) charges, originally based on estimated assessments that were available in February, to reflect the lower final assessments issued in June. The second is to adjust the appropriation for the water enterprise funds to reflect the decision by the Board of Selectmen, at the FY2007 rate - setting that occurred in October, to apply $500,000 in water enterprise retained earnings to mitigate the FY2007 water rate increase. The third is to adjust the appropriations for the water and sewer enterprise funds to reflect a recent decision by the Board of Selectmen to reduce the level of indirect expenses paid by the enterprise funds to the general fund. Adjustments to Reflect Final MWRA Charges In January of each calendar year, the MWRA provides its member towns with a preliminary estimate of their water and sewer assessments for the upcoming fiscal year. The Town uses these preliminary assessment figures to establish the MWRA component of the water and sewer enterprise fund appropriations at the Annual Town Meeting. In June of each year, the MWRA completes its budget process and issues final assessments to its member towns. The final assessments are typically less than the preliminary estimates. When water and sewer rate - setting takes place in the late summer or early fall, the Town's practice has been to set rates in an amount projected to be sufficient to cover the actual, final, MWRA assessments, as well as the other direct and indirect costs of the water and sewer enterprises. In effect, therefore, the Town raises in the rates and pays to the MWRA each year an amount that is somewhat less than the amount originally appropriated at the annual town meeting. The amounts appropriated at this year's Annual Town Meeting for MWRA water and sewer charges and the actual, final, assessments for FY2007 are as follows: MWRA Water and Sewer Charges Fund Appropriated Final Assessment Change Water $ 4,341,830 $4,032,517 S(309,313) Sewer $ 5,782,838 $5,633,833 S(149,005 Total $10,124,668 $9,666,350 S(458,318) Nothing prohibits the Town from spending less than the amount authorized by an appropriation, and it is not strictly necessary for Town Meeting to amend the original enterprise fund appropriations to reflect the final MWRA assessments. Historically, Town Meeting has not been asked to do so. However, in a break from past practice, the Town Manager has proposed making such an adjustment as a housekeeping measure to help increase the transparency of the water and sewer budgeting and rate - setting process, and to simplify the reports that the Town is required to present to the state Department of Revenue during the tax rate - setting process. Page 7 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 While these goals are unobjectionable, this Committee has some hesitation about the precedent of using a Special Town Meeting for a non - essential housekeeping practice such as this. A similar need will recur each year, but there is no assurance that fall Special Town Meetings will routinely be held in the future, and it would not make sense to call a Special Town Meeting just for this purpose. An additional concern is that the MWRA assessments issued in June may not, in fact, be final. The Governor recently exercised his authority to cut from the FY2007 State budget $25 million in statewide Debt Service Assistance that had been approved by the legislature (over his earlier veto) as part of an annual program to relieve MWRA rate - payers from the full cost of debt service on projects that have statewide benefit in particular the Deer Island harbor cleanup. If this cut is not reversed, it could translate to an increase in Lexington's final FY2007 MWRA sewer assessment of $69,690, rendering the adjusted appropriation now proposed for the sewer enterprise budget obsolete.' However, given that the matter is already on this year's warrant, and recognizing that other methods may have to be used to accomplish similar housekeeping needs in future years where no Special Town Meeting is held in the fall, this Committee believes there is no compelling reason not to make the requested adjustments this year. This Committee unanimously (9 -0) supports these adjustments. Adjustment to Retained Earnings At the water and sewer rate - setting that occurred this past October, the Town Manager proposed, and the Board of Selectmen (acting in its capacity as Water and Sewer Commissioners) approved, the planned use of $500,000 in water enterprise retained earnings to mitigate the FY2007 water rates. Given the existing retained earnings in the water fund (see below), the Town Manager advised that this would be a prudent use of the reserves. The effect was to lower the water rate increase from 17% to 6.6 %. At the same time, the Town Manager proposed, and the Board of Selectmen approved, the setting of sewer rates somewhat higher than was projected to be necessary to meet costs in order to augment the sewer enterprise retained earnings by a planned amount of approximately $212,000. The Town Manager advised that the existing sewer fund retained earnings (see below) were inadequate. The effect was to raise the sewer rate increase from 3.5% to 6.5 %. The net effect of the two adjustments was to lower the combined water and sewer rate increase from 7.6% to 6.5 %. The projected effect of the rate adjustments on the existing water and sewer retained earnings (if the usage and other assumptions employed to set the rates are borne out) is as follows: Water and Sewer Enterprise Funds Retained Earnings Fund 6/30/05 6/30/06 estimated Chan a 6/30/07 (projected Water $1,556,429 $2,000,000 $ 500,000 $1,500,000 Sewer $ 614,601 $ 475,000 $ 212,000 $ 687,000 Total $2,171,030 $2,475,000 $ 288,000 $2,187,000 The statute governing enterprise funds, G.L. c. 44, § 53171/2, provides in relevant part as follows: If the estimated income [from the operations of an enterprise fund] is more than the total appropriation, the difference shall be appropriated to a separate reserve fund and used for capital expenditures of the enterprise, subject to appropriation, or to reduce user charges if authorized by the appropriate entity responsible for the operations of the enterprise. If the Town does lose the benefit of the Debt Service Assistance, the Town Manager will make a recommendation to the Board of Selectmen as to how to make up this additional MWRA charge. Since the rates have already been set, and it would be impractical to change them now, any sewer fund operating deficit that results from an after -the- fact increase in the MWRA's sewer assessment would most likely be funded (as it has in the past under similar circumstances) from the sewer enterprise fund reserves without further appropriation. If necessary, the sewer rates would be increased the following year by an amount sufficient to restore the reserves. Page 8 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 This language, taken alone, would suggest that Town Meeting should now appropriate the projected sewer surplus of $212,000 to sewer reserves; and that the action already taken by the Board of Selectmen (the entity responsible for the operations of the water enterprise fund) to apply $500,000 of the water reserves to mitigate the water rates requires no further action by Town Meeting. However, the statutory language is not altogether clear and the Department of Revenue (DOR) has taken the position in its 2002 Enterprise Fund Manual that the application of reserve funds to reduce user charges, as well as the application of an anticipated rate revenue surplus to reserves, must be appropriated by Town Meeting. Given the DOR's interpretation of the enterprise fund statute, and once again to increase the transparency of the water and sewer budget and rate - setting process, the Town Manager proposes that Town Meeting appropriate $500,000 from the retained earnings of the water enterprise fund to reflect the action taken by the Board of Selectmen at rate - setting to mitigate the water rate increase. This Committee unanimously (9 -0) supports this adjustment. The Committee urges the Town staff to consider in the future whether, under the provisions of the enterprise fund statute as construed by the DOR, Town Meeting should also be asked to appropriate any planned revenue surplus in the enterprise funds to a reserve fund. Adiustments to Reflect Reduction in Indirect Expenses At the request of the Board of Selectmen, acting on the recommendation of the Selectmen's Ad Hoc Water and Sewer Rate Study Committee in its Final Report issued in June 2005, the Town Manager initiated a review of the level of indirect expenses that were being charged by the general fund to the enterprise funds for town services that support the operations of the enterprise funds. These include charges for engineering services, finance department services, billing services, insurance, pension benefits and other employee benefits. In a report to the Board of Selectmen this fall, the Town Manager advised that the current level of indirect expenses was significantly overstated, and recommended that the amount be reduced. However, in order to ease the impact of the reductions on the general fund, the Town Manager recommended, and the Board of Selectmen approved, a plan to begin gradually phasing in the reductions, as follows: Water and Sewer Enterprise Fund Indirect Ex Buses Fund Supportable Allocation Current Allocation FY2007 Reduction FY2007 Revised Water $ 657,279 $ 918,613 $34,650 $ 883,963 Sewer $ 383,838 $ 774,300 $20,350 $ 753,950 Total $1,041,117 $1,692,913 $55,000 $1,637,913 In order to implement the first phase of the recommended reductions in indirect expenses, the Town Manager has proposed that Town Meeting now amend the authorizations it made during the 2006 Annual Town Meeting this past spring for transfers from the enterprise funds (Current Allocation) to the amount shown in the right -hand column (FY2007 Revised). The expectation is that future annual reductions of $61,550 for FY2008 -2013, together with inflation, will bring indirect expenses to more appropriate levels at the end of that period. Because the water and sewer rates were set this fall based on the originally authorized amounts, the effect of the proposed adjustments should be to increase the reserves of each of the enterprise funds by the amount of the reductions, assuming the rate projections otherwise prove to be accurate. The increased retained earnings could then be used to mitigate next year's rate increases, if appropriate. The adjustment will result in a corresponding reduction in income to the general fund, which will be covered by available funds. The Committee unanimously (9 -0) supports these adjustments. Page 9 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 Article 4: Community Preservation Fund Funds Requested Funding Source Committee Recommendation $149,000 (i): GF (i): Approve (9 -0) (i) Developer Funds for ($20,000) ($20,000) Approve (9 -0) Historic Preservation Reserve (payment by (ii)(a) & (c): Approve (9— Jefferson Union 0) ($85,000) Realty Trust) (ii)(b): Disapprove (7 -2) + ($44,000) (ii): CPA ($129,000) Backuound At the 2005 Annual Town Meeting, the provisions of the Massachusetts Community Preservation Act (CPA) were accepted and a Community Preservation Committee (CPC) was established. In March of this year, Lexington voters approved the application of a 3% surcharge on their real - estate taxes for the purpose of providing local funding for the four categories of projects under the CPA (Affordable Housing, Open Space, Historic Preservation, and Recreation) and for CPC operating expenses. The CPA tax surcharge is anticipated to raise over $2,300,000 in this fiscal year (FY2007) and in October 2007 the Town will receive matching funds from the State for the amount actually raised in FY2007. (It is anticipated that that match will be at 100 %.) The CPC solicits from the community, including the municipal and school administrations, applications for projects to be funded with CPA funds. Public meetings are held by the CPC to discuss those projects and other activities of the CPC. For those projects it endorses for CPA funds, the CPC then makes "recommendations to Town Meeting for the acquisition, creation, preservation, rehabilitation and restoration of properties and real property interests, as provided in the Act...." (Such CPA - funded projects are in addition to those addressed by the Town's Capital Expenditures Committee for other funding.) Town Meeting can only appropriate CPA funds for projects endorsed by the CPC and presented to Town Meeting; however, Town Meeting can vote to appropriate less than the CPC - requested amount presumably for a reduced project scope and/or by requiring substitute funding. Prior CPA - Funded Projects At the 2006 Annual Town Meeting (April 2006), the CPC proposed, and Town meeting approved, funding for 3 projects ($100,000 for the Fire Station roof, drainage, and apparatus floor, $100,000 for the upgrade and/or replacement of qualified portions of the Dispatch Center, and $60,000 for archives environmental controls) along with $25,000 in administrative costs ($5,000 for a Town -wide mailing & $20,000 for an open -space study which will serve as the basis for future decisions). New CPC - Recommended Actions Relative to CPA Funding The CPC has recommended three projects for approval under this Article. Project Description Amount Requested Funding Source Committee Recommends GF (payment (i) Developer Funds for $20,000 from Jefferson Approve (9 -0) Historic Preservation Reserve Union Realty Trust) As part of a negotiated settlement with the Town for consideration received under the Demolition Delay Bylaw, the Jefferson Union Realty Trust the developer of the Jefferson Union property has paid Page 10 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 $20,000 to the Town. That settlement agreement calls for this payment to be used for historic- preservation purposes. The Board of Selectmen recommends that, in the light of the basis for that payment, the $20,000 be appropriated to the Town's Community Preservation Fund Historic Reserve; thereby increasing the funds available for CPA projects in the Historic Preservation category. This Committee unanimously (9 -0) supports that recommendation. Project Description Amount Requested Funding Source Committee Recommends $25,000 ( n a Hancock - Clarke House (Total Restoration Phase I sto estimated CPA Approve (9 -0) cost is $50,000) "The Lexington Historical Society is undertaking a project to restore the Hancock - Clarke House, to provide accessibility (real and virtual) for the disabled, and to determine the feasibility of continued use of the structure for archives and museum storage. The Society has been awarded a $25,000 grant from the Massachusetts Historical Commission which must be matched with other funds--to engage the services of an architect and architectural historian to develop detailed construction plans and specifications for the restoration." (Project Application, July 24, 2006, "ProjeetInformation, Scope of'Projeet ) This Committee has not yet reached a consensus on the use of CPA funds for non -Town -owned assets as opposed to for Town -owned assets. The majority of us feel it is important to judge proposed projects against the potential set of CPA - eligible projects for Town - owned, or what will be Town -owned assets and feel the "bar" should be set higher for a project that is for a non - Town -owned asset. After all, use of CPA funding shouldn't just be a reward to those "first at the gate" because every CPA dollar spent today is one less CPA dollar available to be spent tomorrow and some of the potential CPA projects (e.g., for Open Space) would carry very large price tags. As we reported to the 2005 Town Meeting in regard to adoption of the CPA (our Report, released March 28, 2005, page 14, under Article 7: Adoption of Community Preservation Act, emphasis added): Implementing the CPA with a 3% surcharge is roughly equivalent (in terms of taxpayer impact) to a $2,000,000 override. The advantage of funding projects through CPA (while full State reimbursement lasts) over an override is clear — we potentially double our spending power with matching funds from the State of $2 million. But without a clear idea of how potential CPA projects prioritize against current Town needs, passing the CPA may seriously challenge our community's propensity to "tax" itself in the near future, potentially endangering attempts to fund operations or capital needs. Thus, we believe it is important to analyze the proponents' list of projects on the horizon that are likely to be eligible to take advantage of CPA assistance, and compare what savings might be realized by leveraging CPA and the State trust fund versus utilizing operating funds or debt exclusion funds alone. Other Committee members believe that 1) merit of the project and its value to the community and 2) availability of other sources of funding should be the principal criteria in any decision of the CPC, this Committee, or Town Meeting, and that ownership of an asset by an entity not part of our Town government should not necessarily imply that a higher degree of justification is needed. In the case of this project, it is clear that the CPA permits the funding of projects for preservation and rehabilitation of a town's historic assets and this Committee recognizes the importance of the Hancock - Clarke House as one of this Town's principal historic assets. Regardless of our view of the criteria to be applied to funding of non - Town -owned assets and even if there weren't the $25,000 matching grant, we Page 11 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 see this project as having a direct and significant benefit by helping ensure the continued existence of one of the Town's priceless historic assets. This Committee unanimously (9 -0) supports the project. Project Description Amount Requested Funding Source Committee Recommends (ii)(b) Lexington Depot Elevator Purchase and $44,000 CPA Disapprove (7 -2) Installation "The restored [historic Lexington Depot] building now serves as the [Lexington Historical Society]'s headquarters and program venue but is also serving as a community center for the entire town. One major impediment to the full use of the building is that the installation of a planned freight elevator that would allow access to the large storage area over the main part of the building has been deferred due to lack of funds. There is no place to store the tables, chairs, projection and sound equipment, lectern and the like that are used by the many groups in town that utilize the building. The Society is requesting $44,000 to pay for the elevator that will permit full functionality of the Depot building." (Project Application, July 24, 2006, `ProjeetInformation, Scope of'Projeet[in part] ) "Currently, the Depot has no access —other than by ladder to the storage area over the function space and offices. There is no place except for the elevator shaft itself to store tables, chairs, sound system, lectern, platform that are used by organizations renting the building. Crowding these items into the elevator shaft has been difficult and unsafe. Once the elevator is installed, these items and others can be brought upstairs to the storage space and readily retrieved as needed. The elevator is designed for freight because there is nothing overhead except a storage area." ( "Community Preservation Funds for the Lexington Depot Elevator ", November 12, 2006) This Committee understands the benefit to the Society and, thus, also to users of the Depot's function space�—of having the freight elevator and acknowledges that use of CPA funding is allowable. We do not believe, however, that this project is an appropriate use of Lexington's CPA funds at this very early stage in the CPC's identification of Town -wide projects worthy of such funds' use specially for Town - owned assets, or assets that the Town may wish to acquire in the future. (For example, we are not even aware of the results of the CPC's open -space study whose funding only became available as of July 1" of this year.) Unlike the Hancock - Clarke project, we see the Depot elevator as a secondary enhancement and one that should be funded by other than a Town appropriation. We encourage the Historical Society to seek alternate sources of funding through contributions and/or increased fees for use of the Depot by non - Society groups. This Committee (7 -2) does not support the project. Project Description Amount Requested Funding Source Committee Recommends (ii)(c) Cary Memorial Building Vault Moveable $60,000 CPA Approve (9 -0) Shelving At the time the Archives Environmental Controls project was presented to, and approved by, the 2006 Annual Town Meeting, it was stipulated that moveable, high - density, archival shelving was also needed as a companion improvement to enhance the functionality of the vault for the State - required archived documents. The shelving was not included in that request for CPA funding as the Town was attempting to obtain a $60,000 grant from the National Endowment for the Humanities to cover the cost of the shelving. Page 12 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 However, in May of this year, the Town was notified that it had not been awarded the grant. This project is eligible, and is proposed by the CPC, for CPA funding. We understand that this shelving project can be accomplished before, during, or after the Archives Environmental Controls project without any significant adverse impact on either project. This Committee unanimously (9 -0) supports the project. Article 6: Appropriate Funds Requested Funding Committee For Affordable Source Recommendation $50,000 GF (payment Approve (9 4) Housing Purposes None from Brookhaven Facilities at Lexington) Department) The 2004 Annual Town Meeting approved a zoning article allowing expansion of 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 these two payments has been made to the General Fund (the second is anticipated next year) and the Board of Selectmen is recommending that this payment be appropriated by Town Meeting for use by LexHAB. This Committee unanimously (9 -0) supports the recommendation. Article 7: Accept Funds Requested Funding Committee MGL Chapter 71, Source Recommendation Section 37M (Joint None Approve (9 4) Facilities Department) Town Meeting is being asked to accept MGL Chapter 71, Section 37M, which allows the Town's School Department to consolidate administration functions with the Town's municipal operations. In this case, consolidation of the facilities management and maintenance functions would create a single, unified, Facilities Department that would 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. Creating this new department is a two -step process. In the first step, under this Article Town Meeting will be asked to accept this statute which permits the consolidation of town and school administrative functions. Once that occurs, the Town Manager and Superintendent of Schools, with the guidance of the Board of Selectmen and School Committee, will work to develop the organizational structure of the Facilities Department, and then translate that into an operational budget. The second step occurs at an Annual Town Meeting (likely the 2007 Annual Town Meeting), when a vote of the School Committee and the Town Meeting will be necessary for the specific consolidation of the maintenance function. It is likely that a consolidated facilities maintenance budget will be presented for FY2008 at the 2007 Annual Town Meeting. Until an organizational structure and budget are agreed upon, we cannot evaluate the potential savings or costs of this consolidation. However, we see approval of the motion under this article as creating an opportunity for the Town to develop a more consistent facilities maintenance program, as well as find savings through operating efficiencies and economies of scale. This Committee unanimously (9 -0) supports approval. Page 13 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 Article 8: Appropriate Funds Requested Funding Committee for Senior Service Source Recommendation $11,000 GF Approve (94) Program This article proposes to supplement the appropriation of $25,000 made at the 2006 Annual Town Meeting last spring for the new senior service program with an additional $11,000 to permit all eligible applicants to take advantage of the program. Last spring, 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 funding amount 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) under the previous State - defined program. At the time Town Meeting approved and funded this new program, the detailed policies governing the program had not yet been finalized. Subsequently, the Board of Selectmen adopted guidelines that increased eligibility and enhanced benefits in the following respects, compared with the State program it replaced: • 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 is now $6.75 and scheduled to increase 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) 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 authority to expand eligibility to persons under age 60 who are disabled or handicapped, they have 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 (which were accepted between June 15 and September 15, 2006) exceeded expectations. A total of 43 eligible applicants have applied, which compares with prior participation of 31 in FY2004 and 37 in each of FY2005 and FY06. The combination of higher - than- expected participation and the enhancement of benefits means that if all eligible applicants are admitted to the program and work the full number of hours (100) necessary to earn the maximum tax credit of $850, a total of $36,450 will be required to fully fund the program. In order to make it possible to allow all applicants to participate, Town Meeting is now being asked to make a supplemental appropriation to the program, from available funds, of $11,000. Page 14 of 15 APPROPRIATION COMMITTEE REPORT TO STMI NOVEMBER 2006 In its report on the original Article creating this program last spring, this Committee observed that: "The $25,000 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, will increase transparency and give Town Meeting more control over the budget." While this Committee would have preferred to see an adequate appropriation for this program made before -the- fact, rather than after - the -fact, it nevertheless believes the same observations apply. This Committee unanimously (9 -0) supports approval. Page 15 of 15