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Home My WebLink About2010-10-06-AC-min October 6, 2010 Minutes Town of Lexington Appropriation Committee October 6, 2010 Place and time: Selectmen’s Meeting Room, 7:30PM Members present: Glenn Parker (Chair), John Bartenstein (Vice Chair and Secretary), Joe Pato (Vice Chair), Mollie Garberg, Alan Levine, Susan McLeish, Dick Neumeier, Rob Addelson (ex officio, non-voting) The Committee joined the Board of Selectmen, the School Committee,and the Capital Expenditures Committee for the first Budget Collaboration-Financial Summit for FY2012(“Summit I”). The agenda items were: 1.Overview –Lexington’s Financial Condition(Carl Valente) 2.FY2012-2014 Revenue and Expenditure Forecast(Rob Addelson) 3.KeyPolicy Issues Related to FY2012Budget (Carl Valente, Paul Ash) 4.Estabrook School Update and Special Town Meeting Discussion 5.EstablishDate: Summit Meeting 2 6.Other Business Please see the attached minutes of the Board of Selectmen, which are published on the Town web site athttp://lexingtonma.gov/selectmen.cfmand which are also available in the Town Clerk’s office, for details. The meeting was adjourned at approximately 9:25PM. A list of documents and other exhibits used at the meeting is attached. Respectfully submitted, John Bartenstein ApprovedMay 17, 2011 -1- October 6, 2010 Summit I October 6, 2010 A Summit was held on Wednesday, October 6, 2010, at 7:30 p.m. in the Selectmen Meeting Room, Town Office Building. Chairman Manz, Mr. Kelley, Mr. Cohen, Mr. Burnell and Ms. Mauger; Mr. Valente, Town Manager; Mr. Addelson, Comptroller and Ms. Pease, Executive Clerk, were present. Also Present: All School Committee (SC) members; Dr. Ash, Superintendent of Schools; Ms. Dunn, Assistant Superintendant for Finance and Business; all members of the Appropriation Committee (AC), except Mr. Michelson; Ms. Stoltz and Mr. Edson of the Capital Expenditures Committee (CEC); Mr. Goddard; Public Facilities Director; and Ms. Brown, Town Moderator. Estabrook School Update and Special Town Meeting Discussion Dr. Ash gave an update on the Estabrook School environmental issues. After reviewing the air samples collected on September 27, 2010, the Advisory Committee does not feel the ceiling tiles need to be removed. The plan is to only replace the crumbling tiles. Also some sliding doors will be removed and all cove will be replaced. The estimated cost for the suggested work is $750,000.$550,000 has already been spent. All of this work is pending approval of a plan by the EPA. The group discussed a date for a Special Town Meeting if needed. The suggested date is November 15. There was a lot of discussion on whether a Special Town Meeting was needed. Mr. Valente and Mr. Addelson need a few days to make sure they can work through the tax rate setting issues. Upon motion duly made and seconded, it was voted 4 -1 (Burnell opposed) to set the date for a special town meeting on November 15 if needed. Health Hazards Task Force Mr. Manz handed out a proposed charge and membership for a Health Hazards Task Force. The charge is more Estabrook specific and would evaluate and make recommendations with respect to the post mitigation planfor Estabrook School; identify funding sources for the meditation work; and work on a communication plan going forward. Members would included two Selectmen, two School Committee members, one member from the Board of Health, two from the Estabrook Advisory Task Force; Liaisons from Appropriation Committee, Capital Expenditures Committee and Permanent Building Committee; Staff representatives from the Public Facilities Department, Town Manager's Office, School Superintendent's Office and Community Development Department. This task force is specific and another task force could be formed to discuss capital planning for all town projects. School Committee members also want a capital planning task force to discuss with the Selectmen and finance committees all the different projects that are in the works. -2- October 6, 2010 Summit I —October 6, 2010 A joint meeting of the Board of Selectmen and School Committee will be planned soon to discuss forming a capital planning task force. Mr. Goddard asked the Selectmento consider making the Task Force a town -wide health hazard task force because of the other two Town buildings with PCBs that EPA has been notified about. Upon motion duly made and seconded, the School Committee voted 4 -1 (Coppe opposed) to form a Task Force specific to Estabrook School post mitigation as well as to identifying sources to cover the cost of mitigation. Upon motion duly made and seconded, the Board of Selectmen voted 3 -1-1 (Kelley opposed and Burnell abstained) to form a Task Force specific to Estabrook School post mitigation as well as to identifying sources to cover the cost of mitigation. Overview of Lexington's Financial Condition Mr. Valente presented a summary evaluation of the town's financial condition: 1) evaluate fiscal health through a series of financial indicators and comparative benchmarks; 2) 3 -year revenue and expenditure projection; and 3) key policy issues that the Selectmen, School Committee and finance committees need to consider when discussing the budget for FY2012. Lexington's financial condition is generally sound: it has good revenue growth, stable labor costs as a percentage of total operating costs, adequate pension funding, a good balance of revenues related to economic growth, low debt service and adequate reserves; is satisfactory in the areas of expenditure growth; and is unsatisfactory in the areas of state aid and employee liabilities, in particular employee benefit costs and unreliable state aid. Revenue growth has, for the most part, been positive. State aid dependence may be difficult to manage where there is a reduction in funding, but the contingency plan in place helps create reserves capable of offsetting cyclical downturns in state aid and local receipts. Uncollected property taxes have increased and may indicate an inability by property owners to pay due to economic conditions; which may result in less cash on hand for the Town to invest. Personnel cost indicators are favorable to marginal; increasing salaries and wages may point to future pension and health insurance costs and if salaries and wages as a percent of operating expenditures are increasing it may be an indicator of deferred maintenance of the Town's infrastructure. Employee benefits indicator is unfavorable and represents a significant and increasing share of the Town's operating costs. Debt Service indicator is favorable; over the last ten years Lexington has invested extensively in new capital projects. Reserves and fund balance indicator is favorable because of several types of reserves. -3- October 6, 2010 Summit I —October 6, 2010 FY2012 -2014 Revenue and Expenditure Forecast Mr. Addelson reviewed the 3 -year revenue and expenditure projections. The information provided is a tool for planning the budget. The variablecost drivers include: municipal wages, school wages and new debt service. Key Policy Issues Related to FY2012 Budget The key policy issues related to the FY2012 budget are: Use of stabilization fund reserves to offset State Aid Reductions; Potentialfor debt exclusion question for Bridge and Bowman schools and roads; ability to continue to fund general fund capital at $3 to $4 million annually; and impact of federal health care reform on employee health insurance plans. Establish Date for Summit Meeting 2 At the next summit there will be a presentation of revenue projections for FY2012 and the proposed split. The suggested date for Summit Meeting 2 is November 18. Documents Presented 1. Letter Regarding Air Samples Collected on September 27, 2010 at Estabrook School. 2. Estabrook Environmental Concern Cost Estimate Summary dated 10/6/10. 3. PCB Presentation prepared by EH &E. 4. Draft Estabrook Health Hazards Task Force Charge. 5. Financial Summit I —Indicator Analysis for Fiscal Year 2000 -2010, Projections & Estimates for Fiscal Year 2012 -2013, dated October 6, 2010. Upon motion duly made and seconded, it was voted to adjourn at 9:30 p.m. A true record; Attest: Lynne A. Pease Executive Clerk -4- October 6, 2010 Exhibits Budget Collaboration-Financial Summit I October 6, 2010 1.Agenda posted by Carl Valente, Town Manager 2.Updated proposal circulated by Hank Manz, Chair of the Board of Selectmen for Estabrook Health Hazards Task Force 3.Estabrook Environmental Concern, Cost Estimate Summary, dated 10/6/2010 4.Slides prepared by Environmental Health & Engineering (EH&E) regarding results of Estabrook remediation efforts 5.Memo from EH&E dated October 6, 2010 re “Air Samples Collected on September 27, 2010, Estabrook Elementary School 6.Financial Summit I –Indicator Analysis, Fiscal Year 2000-2010; Projections & Estimates, Fiscal Year 2012-2014, October 6, 2010 -5-