Financial Projection for Debt Exclusion 3.09% Residential Tax Growth Baseline Operating Override 7th Elementary School Rebuilt Lexington High School +44% Committee for Systemwide Master Planning Before Building a New Preschool https://planbeforepreschool.wordpress.com

Operating Override Will Be Needed Increasing school enrollment is the major driver for Lexington’s taxes. Lexington projects a deficit of $4.4 million in FY2020 and $6.3 million FY2021 due to increased enrollment.* Summit I – page 8, October 2017 shows deficit Absent school committee guidance, we assume an override will be sought and taxpayers will be presented with an operating override in 2020 Net cost to Lexington: at least $4 million/year** * October 2017 Summit, page 8 ** Plus 3.1% annual increase

7th Elementary School Net cost to Lexington with MSBA: $70 million “[I]f enrollment growth continues at the level of the median forecast, the schools would be just over capacity for the 2019/2020 school year, and afterwards, if growth continues at the median forecast rate, the enrollment will be approximately 100 students over capacity in 2020/2021, and by 2021/2022 the system would be at approximately the level of overcrowding we have today.” (CEC 2017 TM Report, p12) $8 million for 8.4 acre Pelham school Absent school committee guidance, we estimate this school for 2024, at a cost of $66 million building plus $20 million land. Net cost to Lexington with MSBA: $70 million CEC=Lexington Capital Expenditures Committee

Lexington High School Rebuild “The eventual High-School project is not yet defined…but it is worth noting that the most recent neighboring project to be approved was in Somerville where a $257 million high school for 1,590 students was approved by voters in October 2016.” (CEC Report, 2017 TM, p.1) Absent school committee guidance, we estimate a new school in 2024, at a cost of $400 million. As Net cost to Lexington with MSBA: $300 million. CEC=Lexington Capital Expenditures Committee

Baseline Real Estate Tax Growth Town leaders assume and forecast 2.5% real estate tax growth before debt exclusions and overrides Study (attached) demonstrates that 3.09% is the average real estate tax growth before debt exclusions and overrides Major driver: personal property which accounts for over 20% of “new growth” tax levy increase, but does not accumulate in the tax base. DOR staff acknowledge this is a known effect Result: Baseline tax projection should be 3.09% compounded, resulting in significantly higher taxes than 2.5% assumption. (+$773 on median home in FY26) Visual illustration on next page

FY13->FY14 Why Real Estate Taxes Increase 3.1%/Year Before Overrides and Debt Exclusions Who Pays for Recycled Assets? Total Levy Growth New Levy Growth Assessed Value Change 2.5% Automatic Levy Growth $1,452K Residential RE Tax +$775K Total Tax Increase Instead of + $2.8 Million, Homeowners must pay + $3.6 Million + $3,017K New Growth + 2.03% $260K Commercial FY2016->2017 $375K Industrial Personal Property Declines Despite Levy Growth! $931K New Unfunded $74K Old Unfunded $1,004K Total Unfunded $931K Personal Property Commercial Tax: +$132K Industrial Tax +$59K Lexington +4.5%/Year Personal Property Tax +$37K Red = New growth without increase permanent assessed value