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Minutes
Town of Lexington Appropriation Committee
July 7, 2011
: Cary Hall, Ellen Stone Room, 7:30p.m.
: Glenn Parker, Chair; Joe Pato, Vice Chair; John Bartenstein, Vice Chair and
Secretary; Robert Cohen; Mollie Garberg; Alan Levine; Eric Michelson; Richard Neumeier; Rob
Addelson (non-voting, ex officio)
Also present: Micah Niemy, Budget Officer; Jim Goell, Town Meeting Member
The meeting was called to order at 7:35p.m.
1.FY 2011 Salary Adjustment AccountTransfers.Micah Niemy made a presentation on
proposed Salary Adjustment Account transfers for FY 2011. The Salary Adjustment Account is
acontinuing balance account that is used to fund anticipated but as yet indeterminate salary
costs, such as the costs to fund unsettled contracts, incremental overtimecosts,and vacation and
sick leave buy-backs at retirement,to the extent theyare not otherwise absorbed by departmental
surplusesresulting from unfilled vacancies. Transfers from the Salary Adjustment Account are
approvedby the Board of Selectmen but they have traditionally beensubmitted for review by the
Appropriation Committee as well.
The proposed transfersfor FY 2011, totaling $30,900,aredetailed in a spreadsheetthat was
circulatedto the Committee. Theyare needed to covercontract settlements and vacation
buybacks for the following departments: Board of Selectmen (staff), Finance, Town Manager’s
Office, and MIS.
It was noted that the total amount of the transfers required this year isrelatively small (last
year’s transfers totaled $316,500), and questions were raised about the level of annual
appropriations made to this account and its current balance. Mr. Addelson reported that the fund
balance coming into FY 2011 was approximately $1,330,000 and that approximately $540,000
was appropriated forFY 2011, bringing the fund balance as ofthe end of FY 2011 (after the
proposed $30,900 transfer) to approximately $1,840,000. An additional amount of
approximately $460,000 was appropriated at this year’s annual Town Meetingfor FY 2012,
bringing the totalfund balance that will be available in FY 2012 to approximately $2,300,000.
In hindsight, this year’s appropriation may have been larger than necessary, and the significant
carryover balance remaining in the account will be taken into consideration in setting the budget
for FY 2013. Mr. Addelson noted, however, that collective bargaining contracts with the Fire
Department employees still remain open for FY 2010 and FY 2011 and that it is prudentto
budget the salaryadjustmentline item conservatively so as not to run the risk of a budget
shortfall.
The Committeeendorsedthe proposed transfers by a vote of 8-0.
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2.FY 2011 3% Rule Transfers.Mr. Addelson presented to the committee for its approval
a series ofyear-end transfers under the 3% rule. The 3% rule, enacted by the State legislature
several years ago,allows cities and towns to balance their budgets administratively at year-end,
by transferring appropriated but unexpended amounts of up to 3% of any line item to any other
line item. These transfersrequire approval of both the Board of Selectmen and the Appropriation
Committee.
The transfers proposed for FY 2011, as detailed in aspreadsheetthat was circulated to the
Committee, total $80,415, including:a transfer of $35,415to Long-Term Debt Principal from
Long-Term Debt Interest ($25,000), Temporary Borrowing ($4,344) and Health Insurance
($6,001); a $20,000 Fire Department expense shortfall due to unanticipated apparatus repair
costs coming from Health Insurance ($20,000); and a $25,000 Public Facilities Department
expense shortfall due to higher than anticipated utility costs (natural gas at Clarke, electricity at
LHS and water/sewer costs that were recalculated) coming from Health Insurance ($25,000). The
Committee discussed the transfers, budgets and the reasonsbehind the shortfalls. There will be
follow up with Pat Goddard after he has completed his utility overage analysis.
The Committee voted to approve the proposed 3% transfers by a vote of 8-0.
Reserve Fund Status.
3.Mr. Addelson reported that the end-of-year balance in the FY
2011 Reserve Fund is $480,000.It is anticipated that the FY2011snow and ice deficit of
$652,000will be closed using availableFY12 revenue,including the $300k of unallocated
revenuethat is set aside each year for this purpose and an additional $352,000 of the $600,000 of
free cash that was set aside as a hedge against potential cuts in stateaid but which will not be
needed (the cuts ended up being modest at $50k, and could be erased altogether in the event of a
surplus in the state budget). Accordingly, it is expected that the full $480,000remaining in the
Reserve Fund will close to the General Fund and contribute to the free cash available for
appropriation in FY 2013.
Thanks to Micah Niemy.
4.It was noted that this meeting would likely be the last
attended by Micah Niemy, who will be leaving his post as Budget Officer in August to pursue a
master’s degree in public administration. The Committee thanked Micahfor his hard work and
contributions to the Town and wished him the best of luck in his future endeavors.
5.Miscellaneous.
Eric Michelson reported that he and Dick Neumeier have setup a
meeting later in July with Bill Hadley, Director of Public Works. This will be a
preliminary meeting to better understand snow and ice processes and procedures.
RobAddelson circulated a summary of Town and School legal
expenditures from 2008-2011 (not including CPA legal expenditures or bondcounsel
work) in response to a previous request by Committee members. There was further
discussion of the possibility that savings could be achieved by hiring in-house counsel
to take over some of this legal work. Mr. Addelson suggested involving the Board of
Selectmen in determining whether this is a topic that should be pursued, and it was
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agreed that it would be best to start with an email inquiry to the relevant users of legal
services to determine the level of interest.
Minutes. Draft minutes had been circulated of meetings held on September 22, 2010,
November 3, 2010 and June 21, 2011. As some members wished to have additional
time to review and comment on them, consideration will be deferred until the next
meeting.
Salary Issues. TheCommittee discussed briefly the recent controversy over the
School Committee’s negotiation of a new contract with the Superintendent, salary
levels and teacher morale; and what, if any, involvement it should have in these
matters.
6.Action Items.
Alan Levine and Mollie Garberg will review and edit minutes for consideration at the
next meeting.
The Committee will follow up with Pat Goddard regarding the reasons for utility cost
overruns, primarily at the Clarke Middle School.
Glenn Parker will email the Town Manager, Board of Selectmen and Superintendent
of Schools regarding their level of interest in evaluating the possibility of bringing
some legal services in-house.
Eric Michelson will speak with School Committee Chair MaryAnn Stewartto get an
update on issuesrelating to the Superintendent’s contract.
The meeting was adjourned at 9:05p.m.
A list of documents and other exhibits used at the meeting is attached.
Respectfully submitted,
Andrea Yepez
Recording Secretary
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Exhibits
Appropriation Committee Meeting
February 3, 2011
1.Meeting Agenda posted by Glenn Parker, Chair
2.Spreadsheet summarizing Transfers Related to Overages in General Fund Personal Service
Appropriations (Salary Adjustment Account Transfers) and in General Fund Expense
Appropriations (3% Rule Transfers),withapproval forms, distributed by Micah Niemy,
Budget Officer
3.Analysis of Legal Expendituresfor FY 2008-2011,distributed by Rob Addelson, Assistant
Town Manager for Finance
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