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HomeMy WebLinkAbout2011-10-05-AC-min-summitOctober S, 2011 Minutes Town of Lexington Appropriation Committee October 5, 2011 Place and time: Public Services Building Training Room, 7:00 PM Members present: Glenn Parker (Chair), John Bartenstein (Vice Chair and Secretary), Joe Pato (Vice Chair), Robert Cohen, Alan Levine, Eric Michelson, Dick Neumeier, Jonina Schonfeld, Rob Addelson (ex officio, non - voting) Members absent: Mollie Garberg The Committee joined the Board of Selectmen, the School Committee, and the Capital Expenditures Committee for the first Budget Collaboration - Financial Summit for FY 2013 (Summit I). The agenda items were: 1. Procedure for Meeting Minutes for Summit Meetings 2. FY2013 Budget Kick -Off Discussion • Overview — Lexington's Financial Condition (Carl Valente) • FY2013 -2105 Revenue and Expenditure Forecast (Rob Addelson) • FY2013 Budget Calendar 3. Key Policy Issues Related to FY2013 Budget (Carl Valente, Paul Ash) 4. Bridge /Bowman and Estabrook Schools Building Updates; Special Town Meeting and Debt Exclusion Discussion 5. Establish Date: Summit Meeting 2 6. Sign Special Town Meeting Warrant Please see the attached minutes of the Board of Selectmen, which are published on the Town web site at http: / /lexingtonma.gov /selectmen.cfm and which are also available in the Town Clerk's office, for details. The meeting was adjourned at approximately 9:00 PM. A list of documents and other exhibits used at the meeting is attached. Respectfully submitted, John Bartenstein Approved December 7, 2011 -1- October 5, 2011 Summit Meeting Board of Selectmen, School Committee, Appropriation Committee and Capital Expenditures Committee October 5, 2011 A Summit was held on Wednesday, October 5, 2011, at 7:00 p.m. in the Public Services Building Cafeteria, 201 Bedford Street. Chairman Manz, Mr. Kelley, Mr. Cohen, Mr. Burnell and Ms. Mauger; Mr. Valente, Town Manager; Mr. Addelson, Finance Director, Mr. Kalivas, Budget Officer; Mr. Goddard, Director of Public Facilities and Ms. Chabot, Assistant to the Executive Clerk, were present. Also Present: All School Committee (SC) members with the exception of Ms. Brodner and Ms. Steigerwald; Dr. Ash, Superintendent of Schools; all members of the Appropriation Committee (AC) with the exception of Ms. Garberg; all members of the Capital Expenditures Committee(CEC); and Mr. Himmel, chair, Permanent Building Committee. Sign Special Town Meetiniz Warrant Mr. Manz reported that the School Committee has requested the Selectmen to sign the Warrant for the Special Town Meeting on Monday, November 14, 2011. Upon motion duly made and seconded, it was voted 4 -1 (Kelley opposed) to sign the Warrant for the Special Town Meeting on Monday, November 14, 2011. Procedure for Meeting Minutes for Summit Meetings Mr. Manz opened the discussion by explaining that since all of the groups attending the Summit are required to post the meeting, they all need to have agendas and minutes. It was decided that all of the groups would point to the same agenda posted by the Selectmen and reference the Selectmen's minutes. FY2013 Budget Kick -Off Discussion Mr. Valente noted that the information presented tonight is available on the Town's website. The presentation provides an informed snapshot of Lexington's financial condition to assist policymakers in preparing for the FY2013 Budget Process. Evaluation of the Fiscal Health of the Town — Indicator Analysis, FY 2000 - 2011 Using a series of recognized metrics from professional organizations, including the International City /County Management Association, (ICMA), the Government Finance Officer's Association (GFOA), Moody's Investor's Service, and data from the Town of Lexington, the Mass. Department of Revenue, the Mass. Department of Education, and the U.S. Census Bureau, Town staff has compiled 14 indicators with which to evaluate the Town's fiscal health. Mr. Valente reported that Lexington's financial condition is generally sound. In particular, Lexington has positive revenue growth, stable labor costs as a percentage of total operating costs, -2- October S, 2011 Summit Meeting — October 5, 2011 adequate pension funding, a good balance of revenues related to economic growth, low debt service, and adequate reserves. Lexington's financial condition is satisfactory in the areas of expenditure growth. Lexington's financial condition is unsatisfactory in the areas of state aid and employee liabilities (with the exception of pension funding). In particular, Lexington continues to witness significant increases in employee benefit costs, and unreliable levels of state aid. Notwithstanding the recent downgrading of the federal government's credit rating, the data in the report presented suggests that the Town's financial condition is strong and the Town is expected to maintain its Aaa credit rating. Revenue and Expenditure Projections FY2013 — 2015 Mr. Addelson presented a 3 year revenue and expenditure projection. He explained that budget decisions made within a given fiscal year often have significant implications for subsequent fiscal years. The revenue and expenditure projection presented is intended to facilitate discussion among community "stakeholders" with the hope that it will result in the identification of issues that call for further discussion and analysis as the FYI 3 budget cycle unfolds. The forecast presented projects general fund revenues and expenditures for the period FY 2013 — 2015 It is important to emphasize that the projection is not a proposed or recommended budget. The forecasting methodology is a maintenance budget approach; that is, the projected increase in costs needed to maintain the "current level of services" reflected in the adopted FYI budget. As a general rule, it only includes increases driven by estimated inflationary pressures, current collective bargaining agreements and other existing purchase of service contracts. Revenues are generally projected based on historical experience. The difference between projected revenues and expenditures is characterized as "surplus /shortfall "; that is, those surplus funds that can be used to fund "variable cost drivers ", for example, finance capital projects, provide for salary increases, restore services eliminated or reduced in a prior fiscal year, fund reserves, etc. Mr. Addelson reported that the Town is expecting a surplus in FYI 3, FYI 4, and FYI 5 as follows: FY2012 FY2013 FY2014 FY2015 Estimated Proj ection Proj ection Proj ection Total Revenues $152,730,211 $160,131,043 $161,144,705 $166,228,473 Total Expenses $152,730,211 $158,320,549 $160,854,047 $165,558,916 Surplus (Shortfall) $0 $1,810,495 $290,658 $669,558 FY2013 Budget Calendar The FY2013 Budget Calendar was included in the materials presented. The calendar lists dates for upcoming Summit Meetings: Summit II on November 17, 2011; Summit III on January 19, 2012; and Summit IV on February 16, 2012. -3- October 5, 2011 Summit Meeting — October 5, 2011 FY2013 Budget Policy Issues Mr. Valente presented the following budget policy issues: 1. Financial impact of a new health insurance coalition agreement with employees and retirees (based on the change in law passed earlier this year). 2. Financial impact of collective bargaining agreements for FYI (making no assumptions on increase in salary) 3. Property Tax impact of Bridge /Bowman and Estabrook schools projects (If Town Meeting approves those projects and if they are successful on a debt exclusion ballot.) Mr. Lamb (CEC) added that 3(a) should be the Tax impact of failure of a debt exclusion override. 4. Long -term financing plan for street improvements /reconstruction. Bridge /Bowman and Estabrook Schools Building Updates' Special Town Meeting and Debt Exclusion Discussion Mr. Goddard, Director of Public Facilities, reminded the group that at the last meeting when three timing options for debt exclusion and Town Meeting votes for the Bridge, Bowman and Estabrook projects were presented the consensus was to proceed with Option 3: Bridge /Bowman and Estabrook Voted on Same Date and Special Town Meeting for Bridge /Bowman. He reported that the Permanent Building Committee, Facilities Department and School Department are on target with an aggressive schematic design schedule. Mr. Himmel, chair Permanent Building Committee and Mr. Goddard, Director of Public Facilities presented a Project Cost Review for the Bridge and Bowman Schools. The Design Development Estimate came in at $22,141,429. This is an increase of $2,771,000 over the previous estimate of $19,370,000 at Schematic Design. In response to Mr. Kelley's question about energy efficiency Mr. Goddard explained that there will be a significant operating cost reduction at the Bridge and Bowman Schools. The Town can expect these schools to perform at approximately $1.66 per square foot compared to the new schools Fiske and Harrington which perform at about $2.00 per square foot. In response to Mr. Kelley's question about space needs, Mr. Ash explained that with four additional classrooms, Bridge and Bowman will be able to accommodate current enrollment program space needs and room sizes will be comparable to the new schools Fiske and Harrington. Mr. Goddard presented the Bridge and Bowman Schools Project Schedule. Construction would begin in April of 2012 and be completed in the fall of 2013. Mr. Goddard also presented the Estabrook Elementary School Project Schedule through Schematic Design. He is hopeful that the Town is going to be able to meet this schedule for the Massachusetts School Building Authority (MSBA) Board to vote Scope and Budget on March 28, 2012. The MSBA is going to allow the Town to build an 82,000 square foot school. Mr. Goddard thought the cost would be roughly in the $32 — 34 million range. M October 5, 2011 Summit Meeting — October 5, 2011 Establish Date: Summit Meeting 11 The date for the next Summit was set for Thursday, November 17 at 7:00 p.m. in the Public Services Building, 201 Bedford Street. Upon motion duly made and seconded, it was voted to adjourn at 8:52 p.m. A true record; Attest: Diana B. Chabot Assistant to the Executive Clerk 11•1E October 5, 2011 Exhibits Budget Collaboration — Financial Summit I October 5, 2011 1. Agenda posted by Carl Valente, Town Manager 2. Financial Summit I: Indicator Analysis, Fiscal Year 2000 -2011; Projections & Estimates, Fiscal Year 2013-2015, prepared by Town Staff, dated October 5, 2011 3. Bridge &Bowman Schools Project Schedule (9/15/11); Combined Bridge, Bowman and Estabrook Project Schedules, Option 3; Estabrook Project Schedule thru Schematic Design (9/23/11) 4. Bridge and Bowman Design Development Estimate, Base Scope (9/16/11) 5. Lexington Estabrook School Meeting Schedule (10 /5 /11) 6. Warrant for November 14, 2011 Special Town Meeting