Town of Lexington, MA - Budget

Budget Information

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Capital Budget

Everything the Town does, from providing services to its residents and citizens, to equipping employees to effectively perform their jobs, requires the existence of certain basic physical assets. These assets include streets, water mains, parks, buildings, large equipment and technology. They must be purchased, maintained and replaced on a timely basis or their usefulness in providing public services will diminish. The Town's five-year Capital Improvements Program and annual Capital Budget are developed to ensure adequate capital investment in the Town's assets.

What is Capital?

A capital project is a major, non-recurring expenditure involving one or more of the following:

	Acquisition of land for a public purpose;
	Construction of, or addition to, a facility such as a public building, water or sewer lines, play field, etc.;
	Rehabilitation or repair of a building, facility; provided the cost is $25,000 or more and the improvement will have a useful life of 10 years or more;
	Purchase of equipment costing $25,000 or more, with a useful life of 5 years or more (all cars are defined to be non-capital items);
	Any planning, engineering or design study related to a specific capital project.

FY 2007- FY 2011 Capital Planning

In order to meet the continuing service demands of the community, maintaining Town assets is just as important as providing the operations themselves. Town meeting approved $7,543,000 in capital projects at the 2006 Annual Town Meeting. The Town of Lexington uses five-year planning to adequately predict what capital needs will require attention in the near term. Both large scale projects (Street Improvements) and smaller projects (Playground Improvements) are included in this plan.

The Town of Lexington’s major capital policies are intended to ensure adequate funding for capital investment. Enterprise fund capital projects are funded through Water, Sewer, and Recreation enterprise funds. Large capital projects for which long-term borrowing is appropriate are generally proposed for debt exclusion. Finally, the Selectmen set a goal of allocating five percent of general fund revenues annually to debt service and cash funding of smaller capital replacement or renewal projects.

Unfortunately, the Town has recently taken on more debt within the general fund than anticipated, and this constrains the amount of cash available for capital needs. In addition, the Town has drawn down its cash reserves in recent years to balance operating budgets. Long-run capital policy is being reconsidered in the context of the overall fiscal health of the Town.

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