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Meeting of the Lincoln Finance Committee
February 7, 2008
Lincoln Finance Committee Members
Present: S. Haber, M. Hartman, J. Koenig, J. Robinson (chair), E. Shorb, P. Giese
Absent: R. Steinbrook
Minutes submitted by S. Haber
The meeting was called to order at 7:30 pm in the administrative office at Lincoln Town Hall.
The committee met with Colleen Wilkins, Finance Director/Town Accountant to learn about and discuss the new Government Accounting Standards Board (GASB) requirement to calculate and report the present value of “Other Post Employment Benefits” (i.e. retirement health and life insurance benefits) on the Town’s Balance Sheet as an accrued liability rather than recording the cost of the actual benefit when it is incurred. Colleen informed us that the present value of the accrued liability totals $62M which, in order to comply with GASB’s ruling, would require the town to amortize this amount over a 30-year period, resulting in an additional annual charge of $5M. While there is no obligation to fund this amount, it would appear on the Town’s balance as an accrued liability if not
funded, which in the long-term would adversely impact the Town’s bond rating. Colleen indicated that the Town’s officials will further investigate this matter vis-a-vis what other towns are doing in this regard as well as obtain a second professional actuarial opinion of the accrued value of this liability. It is anticipated that the Town will be asked to create (not fund) the Fund for this accrued liability at the next Town Meeting.
The committee summarized the preferred budget requests of the Town ($70,650), K-8 Schools ($80,000), and Library ($22,744), totaling $173,394. On January 31, 2008, the committee voted via e-mail (6-0, P. Giese not voting) to allocate these amounts from available Free Cash and thus finalized the proposed FY '09 budget. Because Lincoln's assessment for the Minuteman Regional High School was about $30,000 less than anticipated (four students in FY '09, as compared to five in FY '08), certified Free Cash remaining (the major component of the Town's emergency reserves) is now estimated to be about $854,000. This is 3.14% of the proposed FY '09 General Fund budget of $27,159,810.
The committee discussed the activities of the Affordable Housing Trust and the preparation of the Finance Committee report.
The committee will next meet on Thursday February 28, 2008.
The meeting was adjourned at 9:00 pm.
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