A major portion of the upcoming Annual Town Meeting, scheduled for Monday, April 3, starting at 7PM in the gymnasium of the Memorial School, is devoted to debating and approving numerous budgets. From the Town’s general operating budget, to the School District’s budget, and from the Town’s capital budget to the Community Preservation Committee’s projects, voters will be asked to decide on nearly $33 million worth of expenditures.
The Town’s proposed capital budget comprises about $6.3 million of the total. The majority of this is a bond request of $4.0 million proposed in Article 7. We have paid off another round of previous borrowings and are proposing to replace the old debt with a similar amount of new debt. The bond money will be evenly split between water and sewer projects, targeted primarily to replacing old leaking pipes and replacing worn out equipment at both the water and sewer treatment plants.
The approval of the bonds is in two steps. First voters must approve putting the bond question on the Town Election ballot at the Annual Town Meeting. Next, voters must approve the new borrowing at the ballot box come the May 16th Town Election. As with most of our debt, voter approval is sought to exclude the principle and interest payments from the restrictions of Proposition 2 ½. This means that the funds needed to make the annual debt payments are in addition to what we raise in taxes under the annual 2 ½% maximum increase. However, because the new bond payments are replacing old bond payments, we are not increasing the amount we need to raise outside the levy limit.
Our approach to funding needed capital projects is to keep the amount of funds raised constant from year to year. A major component of this strategy is to approve new borrowings as old debt is retired. The timing of new projects and similar sized bonds does not always align perfectly. This coming year is a case in point -- the new bond payments are lower than the old bond payments by some $300,000. In order to maintain level funding and to continue making the capital improvements we need, we can utilize another type of excluded funding called a capital expenditure exclusion. Similar to a debt exclusion vote, a capital expenditure exclusion vote raises funds for a specific project outside of the levy limits of Proposition 2 ½. However, unlike debt exclusion votes, capital exclusion votes are only for one year and avoid the costs of borrowing (no issuance and interest charges as it is a one-time collection of cash.)
Article 6 seeks voter approval to raise $300,000 through a capital expenditure exclusion in order to purchase all the streetlights in Town (currently owned by National Grid to whom we pay “rent” and electricity costs) and convert them to LED lights. This will result in substantial annual savings and reduce our energy consumption. It is anticipated the pay-back on this capital expenditure is less than five years. And if we receive grant funds for which we have applied the payback will be even shorter. Similar to debt exclusions, capital exclusions must be approved a second time by voters by ballot at the Town Elections in May.
A fairly long list of capital projects are the subject of Article 5. The list includes road work, DPW, Police and Fire replacement vehicles, ambulance equipment and utility treatment plant upgrades. The funding is a combination of general taxation, fund balance use, repurposed unused capital funds, waterway funds and state aid. The $2.3 million request is higher this year given the use of previously approved capital dollars that is being re-appropriated.
The other list of projects seeking voter approval comes from the Community Preservation Committee. Taxpayers pay a 1% surcharge on their property tax and we receive some funds from the state (now down to around 20% of what we raise locally) to pay for these projects. The biggest request is for $300,000 for the restoration of the Chowder House at Tuck’s Point. Another notable request is to transfer the $100,000 previously set aside in the community housing reserve account to the recently voter approved Affordable Housing Trust. The Trust will use these funds to help with a small scale housing project when an opportunity arises. The other projects seeking funds are listed in Article 10.
Next week I will provide details on the proposed operating budgets.