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Dec 20

From the Town Administrator's Desk - December 21, 2017

Posted on December 20, 2017 at 9:36 AM by Elizabeth Dukes

While charting our future as a community is no easy task, good progress is being made on a number of fronts.  The Master Plan Steering committee, armed with the ongoing feedback being given from the latest community survey (still time to give your input!), will be writing the new plan with its series of recommendations for protecting the character of our community while allowing for changes that improve our vitality as a town. 

Other critical efforts that are on-going involve making priority improvements to our infrastructure, continuing to assess our  long-term needs, and crafting funding strategies that allow us to get the most critical aspects of our infrastructure in good repair without overburdening taxpayers. While there are many needs and wants, we have to be realistic in what we can afford.

Tax dollars are by far our largest source of revenues that are needed to pay for operating expenses of all town departments as well as our share of the School District’s operating costs.  Obviously the more efficiently we can deliver these services the more funding becomes available for our capital needs.  Striking the appropriate balance between funding services and funding capital needs while not overburdening taxpayers can be challenging. And readjusting priorities, especially if it entails cutting back on existing services, can generate passionate debates.   Historically towns and school districts have paid more attention to operating costs and have deferred capital needs for another day.  This is one reason we face such a large backlog of infrastructure improvements.

On the Town side of the ledger, we have been able to increase our funding for capital improvements through the retirement of old debt and the issuance of new debt.  This has allowed us to make significant progress on replacing water and sewer pipes and redoing crumbling roads.  Going forward, as additional debt is retired, we may have an opportunity to operate more on a cash basis, avoiding the costs of borrowing, redirecting such funds to projects instead.  Unfortunately this approach does not work for the School District for now as it is only half way through the one large borrowing for the middle high school. (However, the timing for the upgrades to the Essex Elementary School may allow this strategy to work.)

We currently spend $1.9 million in debt service and capital expenditure exclusions that mostly fall outside of the limits of Proposition 2 ½. Another $1.4 million in annual excluded debt payments is for the bonds for the middle high school, slated to be fully paid off in 2032.  This puts our total annual debt/capital exclusion at just under 10% of total expenditures, which is toward the high side of ranges seen in other communities.  Even so, we enjoy a very favorable AAA bond rating.

As the work on plans for the Memorial School progress through the winter, total projected costs will come into clearer focus.  How we pay for either a renovated school or a new school will be a significant part of the upcoming discussions.  Will voters be willing to vote for new bonds that are paid for by new taxes above and beyond the typical annual increase of 2 ½ %? Are there operational savings through greater efficiencies, new service delivery models (regionalized services?) or program cuts that free up dollars that can be re-directed toward the cost of the project?  The Master Plan survey is showing support for well-planned commercial growth on lands north of Route 128.  Can the new tax revenue from such growth pay for a significant portion of the school project? 

Answering these and other questions will be critical as we continue to chart the future of Manchester. And with new federal tax laws coming into play, voter behavior may be changing.  Be sure you add your voice to the upcoming discussions in the New Year.