WVN #339: Town settles Public Safety Building suit
- Dear Wayland Voter,
After years of litigation, the town has settled for $550,000 in a lawsuit against the architects who designed the Public Safety Building. Another suit remains.
Also in this newsletter: Wayland retains its top Moody's bond rating.
PUBLIC SAFETY BUILDING LITIGATION
Since it was finished in 2003, the 26,000-square-foot Public Safety Building has been plagued by problems caused by the high water table and adjacent wetlands. After initially appropriating $5.75 million, voters approved seven more appropriations totaling $2.42 million, much of that to deal with water damage.
Repairs, including extensive wall replacement, couldn't wait. The town hoped to recover the cost through litigation alleging faulty design of the building envelope and the basement slab and drainage.
Most of the exterior siding was replaced in 2008.
In the settlement Finegold Alexander Architects isn't required to admit liability. The town says in the document signed by the Board of Selectmen on Feb. 8 that it believes it could have prevailed in court but that "available insurance" would have been insufficient to pay a judgment involving both envelope and slab defects.
In settlement of all claims against the firm, $525,000 is earmarked for design defects in the building envelope and $25,000 toward the defective design of the basement slab and drainage systems.
Exactly where the town stands financially can't be known yet because Wayland is still pursuing claims against the consulting engineer, BSC Group, involving slab and drainage design. Town officials were close-mouthed about the Finegold Alexander settlement because of a confidentiality agreement.
The town's legal costs in the suits haven't been specified.
In the settlement the town describes the "underslab drainage defect" as more complex than the building envelope defects and asserts the belief that it will win an amount in the BSC action that is within insurance policy limits.
At the 2008 annual Town meeting, voters forced the selectmen to explain a $600,000 capital request for repairs to the building. Petitioners argued for a warrant article to create an independent capital facilities planning and coordinating committee like those in some other communities, calling the Public Safety Building a "disaster." Voters approved the financial request but rejected the planning committee article, which was opposed by the Finance Committee. The FinCom claimed it already takes care of capital facilities planning. Legal fees related to the public safety building litigation were estimated at $250,000 at that time.
WHAT'S NEXT FOR THE PUBLIC SAFETY BUILDING
Twenty Wayland, developer of the Town Center Project, plans to move Mill Brook, just to the south of the Public Safety Building, closer to the building. This is a delicate change in light of the already existing drainage problems.
Route 20 is to be widened with two extra lanes where it intersects Routes 27 and 126. Because there will space taken from Mill Brook to accommodate one of the extra lanes, flood compensation area must be provided. For flood compensation, Twenty Wayland proposes removing some of the soil on the northern border of the brook, allowing the brook to flow closer to the public safety building.
This road widening is currently on hold due to the conditions in the Certificate of Hardship issued by the Historic District Commission, which require that the first phase of the Town Center project be built (the Stop and Shop supermarket and some smaller stores) before road widening takes place. Twenty Wayland has appealed this decision.
In addition, the off-site portion of the application to the Conservation Commission, which concerns road-widening, is also on hold until Twenty Wayland submits updated plans. Twenty Wayland has asked for repeated delays in submitting these plans.
-- WVN Staff
HIGH RATINGS FROM MOODY'S
Moody's Investors Service has issued stellar ratings for Wayland's recently issued bond and bond anticipation notes. The town continues to enjoy its Aaa rating as the long term general obligation debt has reached $43.5 million, up 23 percent from $35.4 million last year.
The Moody's report makes repeated reference to Wayland's history of passing overrides as justification for the Aaa rating. "The Aaa rating is based on the town's favorably located and wealthy tax base as well as a sound financial position with significant flexibility provided by voter support of Proposition 2 l/2 operating overrides and debt exclusion," the report notes. The report is at
The new long term debt of $12.96 million includes $10 million for the first phase of the high school and $2.96 million for other capital projects. Most of this, $11.39 million, was exempt from Proposition 2 l/2 while $1.56 was not excluded from Proposition 2 ½.
The $4.5 million in notes consists of $1 million to replace maturing notes and $3.5 million in short term financing for a new wastewater treatment plant.
The report states that fiscal 2009 operations yielded a "healthy operating surplus of $2.4 million, boosting general fund balance just over $11 million, a healthy 18 percent of general fund revenues."
It also notes the town has seen a marked improvement in available reserves to $8.6 million, or 14.1% of revenues, compared with $1.5 million or 3.3% of revenues in Fiscal 2005. It further cites in a positive light the other buckets of cash for restricted purposes such as the Community Preservation (CPA) and water/wastewater funds. (The report says it expects a rate increase is likely to pay for the wastewater debt.)
However, the town has fewer reserves than other Aaa communities. "Moody's believes that the town's strong history of voter-approved operating overrides, the relative stability of its property tax revenues (84 percent of the general fund revenues in Fiscal 2009) and its improved financial flexibility somewhat mitigate the less-than-ample reserves typical of similarly-rated municipalities nationally."
But "despite the high wealth and income levels, the town's tax base size is less than one-half of the national median and 69 percent of the commonwealth median for similarly-rated communities."
The report notes Wayland's $3.4 billion tax base is expected to continue to decline near term but the town is "well positioned for future tax base growth over the medium term given its location 18 miles from Boston, close proximity to major highways (Route 20 and Interstate 90) and commuter rail access. Fiscal 2010 property assessments represent the town's fourth year of market value reductions. Incorporating the moderate 4.4 percent assessed value reduction in Fiscal 2010, the town's five-year annual average annual (sic) growth rate has declined to 1.1% from a high of 9.9% in 2006, with the average single family home value declining by an estimated 6.6 percent since 2006."
The report was more up to date than previous reports, noting that Wayland Commons (a 40B affordable housing development) may see four units constructed in the near term although 48 are approved. It notes the Town Center is working through permitting but still cites it as a $100 million project including 100 units of housing.
Prior to the latest debt issue, in Fiscal 2009 debt service was 6.7 percent of general fund expenditures.
-- Molly Upton
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Wayland Voters Network
Michael Short, Editor