487WVN #390: Could some borrowing be avoided?
- Mar 4, 2011Dear Wayland Voter,
The Finance Committee recommends asking voters to approve borrowing about $3.24 million for Fiscal 2012. Some citizens have suggested ways to ease the debt burden on taxpayers, which has already been greatly increased by borrowing for the new high school.
IMPORTANT TOPICS AT UPCOMING MEETINGS
-- Monday March 7, 7 p.m. School Committee. Fiscal 2012 budget.
-- Monday March 7, 7 p.m. Recreation Commission. Possible new fields.
-- Tuesday March 8, 7:30 p.m. Board of Public Works. Water rates hearing.
OVERRIDE: REDUCE BORROWING AND GIVE TAXPAYERS A BREAK?
The Finance Committee proposes no tax override for the operating budget, but there will be a debt exemption override question which, if approved at the April ballot and Town Meeting, will add about $60 in taxes for the average home, or 9 cents per thousand dollars of valuation.
Excluding the debt exemption, the Finance Committee says debt payments for the FY 12 budget will be $20 less per average home (3 cents per thousand) because of expiring debt.
Two citizens at the Feb. 28 Board of Selectmen's meeting suggested borrowing costs could be reduced by using pockets of unspent previously allocated cash, some from 2007.
The total capital budget proposes borrowing $3.24 million. This includes: $1.75 million for the school and town within the limits of the town's levy, $610,000 for water to be paid by users, and $880,000 for the debt exemption beyond Prop. 2-1/2 limits, which requires a ballot question at the polls on April 5.
It is possible, with the limited use of free cash and available school funds, the town could eliminate as much as $950,000 in proposed new borrowing. If the water department were to use some of its water reserves, even more borrowing could be avoided.
If the town were to fund instead of borrow $600,000 it would avoid interest payments of $193,461 if the rate and term were 3.9% for 15 years. Similarly, if the town were to avoid borrowing $950,000, it would avoid interest payments of $306,313.
The free cash balance is $8.5 million (approximately 13% of budget), and the FinCom is proposing using $1 million for further repairs of the Public Safety Building and $300,000 to prepay pension obligations and $200,000 to balance the budget. The FinCom's website states one of its goals is "preservation of Free Cash levels near five percent of the total budget, as recommended by financial lending institutions and the Commonwealth."
The Finance Committee intends to use the excess free cash in future years to help avoid operational overrides.
One likely use for free cash that may emerge at Town Meeting is a petitioners' initiative to allocate $500,000 from free cash for replacement of undersized and clogged water mains in Cochituate center. If the initiative does not pass, the proposed FY12 capital budget funds the water main replacement from water borrowing, which would be added to water fees.
Town Has Water Pollution Funds
To date, the town has received more than $600,000 as part of a class action settlement because of pollution from MtBE, a gasoline additive that threatens water supplies. Because officials never appropriated that award, the money was moved to the General Fund. Currently the FinCom proposes to borrow for the water main work, which increases the burden on water users.
Other towns have used these MtBE funds for water purposes, which, after all, were awarded because of groundwater pollution. There are various MtBE groundwater plumes in town one at the former Raytheon site on Route 20, another under the new Route 20 CVS pharmacy, under several Routes 20 and 30 gas stations, and MtBE was detected in less than reportable concentrations in the Baldwin water well zone I about a decade ago.
There was some discussion of this article at the selectmen's meeting, and some questioned whether the funds should be used to clean up MtBE plumes.
Another rationale for using free cash for water mains was the town's transfer of $500,000 from the water fund to the general fund in 2005 for the FY06 operating budget. Regardless of the reasons profferred by FinCom for that action, some residents feel that the one-time allocation of free cash instead of borrowing for the water main repairs to address emergency Cochituate fire flow inadequacies would be just.
Unspent Pots of Money
Use of previously allocated funds to the School Committee for building repairs could also eliminate the proposed borrowing of $100,000 for building repairs and the parking lot at Claypit Hill and potentially pay for $350,000 earmarked for technology.
The School Committee's list of Capital Accounts reveals a kitty of nearly $750,000 compiled over several years. This includes more than $366,000 unspent in "capital building repairs," and $155,268 earmarked for the Middle School and $228,647 for the high school.
Town Meeting could vote to reallocate such funds, as noted at the Board of Selectmen meeting.
The School Committee also has $8,955 remaining from an FY 10 allocation for a vehicle. This could be applied to reduce the $50,000 scheduled to be spent from cash capital for a truck.
Thus instead of borrowing $3.24 million, the town would be left with proposals to borrow $2.29 million, the bulk of which is for Public Works requests.
The $880,000 sought as debt exemption is for two new grass fields at the Middle School ($500,000), school technology ($350,000) and $30,000 to supplement a previously approved $30,000 that enables the study of both Loker and Greenways for recreation potential, both fields and structures. The Finance Committee presentation to the Board of Selectmen is available at http://www.wayland.ma.us/Pages/WaylandMA_Finance/FY2012DebtExclusion.pdf
The FinCom had voted 5-2 at an earlier meeting to recommend the debt exemption be presented to voters as a single ballot question, rather than splitting the disparate elements into a two-question "menu override". Some members said they believe voters at the polls are insufficiently informed to make such detailed choices, and the presentation and debate format of Town Meeting is the more appropriate venue for such decisions. One member said that the FinCom goes through a great deal of effort to make choices from a much larger number of proposals, and voters should trust their judgment.
Adding new playing fields was the top suggestion from a consultant's study of the town's recreational facilities, and it takes three years before a new grass field can be used.
Various town committees such as the Conservation Commission had not been apprised of the plan that involve major terrain changes including stripping the trees off the back of the Middle School property for fields. The School Committee also had not been informed of the plan to use its land in that way until Monday night, and delayed a vote on its position for the proposal.
A hearing will be held on the field proposal Monday, March 7 at 7:30 p.m.
Given the recent floods in new areas in Wayland, an environmental impact study of such a proposal may be warranted. Trees hold water in the soil and help prevent soil on a hill from eroding and disappearing downhill. Given the location, without trees on the hill beyond the Middle School, the volume of water and potentially soil suddenly hitting the marsh on the western side of Route 27 might impact Dudley Pond and Dudley Brook.
Garage Study Allocation Increased
The Finance Committee again changed the allocation for a study of a new Public Works garage, this time to $175,000. It was tentatively reduced from $250,000 to $50,000 at a previous meeting but the Committee said more detailed plans are needed to satisfy state requirements.
-- Molly Upton
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Wayland Voters Network
Michael Short, Editor