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HomeMy WebLinkAbout2012-04-20-CEC-minMinutes of the Lexington Capital Expenditures Committee (CEC) Meeting Date, Place, and Location: April 20, 2012 9:00 A.M., Cary Memorial Building, Ellen Stone Room Members Present: Ted Edson, Vice - Chair; Bill Hurley; Shirley Stolz; David Kanter Member Absent: Charles Lamb, Chair Documents Presented: 1. Mr. Kanter's E -Mail, April 18, 2012 11:49 EDT, Subj: Supplemental Funding for Cary Library Energy Management Systems (2010 Annual Town Meeting (ATM), Art. 16(f)) 2. Mr. Alan M. Levine's Paper, April 17, 2012, "An Analysis of Policy Issues concerning the Funding of Future Liabilities for Health Insurance for Retired Employees (OPEB) of the Town of Lexington Call to Order: Mr. Edson called the meeting to order at 9:02 A.M. Supplemental Funding for Cary Library Energy Management Systems (EMS) The Committee discussed Mr. Kanter's e-mail that provided additional information regarding the included request by Mr. Pat Goddard, Director of Lexington's Department of Public Facilities, for the Committee's questions or concerns over the use of available, prior - year, Building Envelope funding (2007 ATM, Article 31(j)) to complete the funding for the Library's new EMS. Mr. Kanter said his concern was that the scope of the Motion for that funding was much narrower than what is being used now. He reported the 2007 Motion did not include "and Systems" and the purpose was "for remodeling, reconstructing and making extraordinary repairs to municipal buildings "; therefore, he did not consider it covered an EMS upgrade. The other members agreed. It was moved and seconded not to concur with the use of the Building Envelope funds appropriated by the 2007 ATM toward the Cary Memorial Library EMS —and for Mr. Kanter so to advise Mr. Goddard. Vote: 4 -0. Revisit Committee's Opinion on Supplemental FY2013 Funding to the Post Employment Insurance Liability Fund for the Other Post - Employment Benefits (OPEB) Under the 2012 ATM, Article 18, it is contemplated to continue making annual contributions to that fund —with most of the funding coming from the Federal reimbursement to the Town for the prescription -drug coverage it provided to its retirees in lieu of Medicare Part D coverage. The originally contemplated dollar amount is $500,000; however, at the Budget Collaboration— Summit Meeting 7 on April 11, 2012, the four members of this Committee present at that Summit expressed the opinion that it was reasonable to add another $500,000 from projected FY2013 health- benefits savings as a result of the Town and its employees having agreed to move the health benefits under the program managed by the State's Group Insurance Commission. (That would make the FY2013 contribution $1,000,000 to the fund for OPEB.) Mr. Kanter proposed that this Committee should reconsider that opinion for two reasons. First, that Summit had later agreed with the recommendation of Appropriation- Committee Page 1 of 2 member Mr. Joe Pato to defer any commitment of the residual projected savings as the extent of the actual health- benefits savings for FY2013 wouldn't be known until after the Town employee's had made their plan selections later this calendar year. Mr. Kanter, therefore, now believes it would be similarly prudent to defer putting any of the projected savings into the fund for OPE6. Second, Appropriation- Committee member Mr. Alan Levine has published his paper with an analysis of policy issues regarding contributions to the fund for OPE6. Mr. Kanter agrees with Mr. Levine presentation regarding the policy issues and, therefore, Mr. Kanter believes further discussions are warranted before so- significantly increasing the FY2013 contribution to the fund for OPE6. After further discussion, it was moved and seconded to revise the Committee's opinion on the supplemental funding so as to support at this time only the originally contemplated $500,000 contribution —and for Mr. Kanter so to advise the other parties to that Summit. Vote: 4 -0. Financing & Use of the Wright -Farm Land Purchase (if presented to the 2012 ATM) Although a negotiated agreement for that purchase — provided for under Articles 9 & 10 has not yet been made public, as the Community Preservation Committee (CPC) is meeting the same afternoon to discuss the matter, this Committee discussed what financing for such a purchase would be consistent with this Committee's previously expressed position regarding use of the Community Preservation Fund (i.e., normally all cash, but if debt financing is needed, the overall financing should be front -end loaded with cash and only use short -term debt — preferably with an accelerated debt - service schedule) so its representative, Ms. Stolz, could present an opinion at that CPC meeting. As the purchase price might be under $5,000,000, it was moved and seconded that this Committee's preliminary position— subject to seeing the actual terms and conditions —is that such a purchase should be financed with something approaching half cash and the balance with debt having a term of not more than five years. Vote: 4 -0. As for the use of such land, it was moved and seconded that this Committee's preliminary position —again subject to seeing the actual terms and conditions, but especially as it's expected that the seller would initially retain property containing the house —is that a conservation -only purpose is acceptable for the initial purpose. Vote: 4 -0. Adjourn: A Motion was made and seconded at 9:39 A.M. to adjourn. Vote: 4 -0 These Minutes were approved by the CEC at its meeting on April 23, 2012. Page 2of2