A presentation of Town Manager Buzz Stapczynski’s five-year capital improvement plan this week transitioned into a discussion of taxation and morals, as officials questioned how a number of large projects will be paid for by the town in the coming years.
Stapczynski’s capital improvement plan for fiscal years 2014-18 was presented to the Board of Selectmen, School Committee and Finance Committee on Monday. The plan, spread out over five years, represents nearly $17 million in spending on town projects, land purchases and more.
Seven funding proposals among the full list of 38 exceed $1 million. The largest among them is $3.2 million requested to fund the town’s “School Site Improvement Plan,” which will replace paved areas around Doherty Middle School in the coming year.
Other projects in the plan include: $2 million in conservation land purchases, $600,000 for a school facility space needs study, $400,000 to replacing the Andover High School tennis courts, $1.3 million for major annual road maintenance and just over $1 million for school capital projects.
As the presentation moved forward, however, discussion of how the town will pay for the projects dominated the meeting. Central to the discussion was whether to pay for the projects with non-exempt debt or with exempt debt. Using non-exempt would mean using existing revenue or borrowing money within current taxation levels. Paying with exempt debt would involve borrowing money by raising taxes above Proposition 21/2 taxation limits.
“You can spend as much on non-exempt and it isn’t going to raise anyone’s taxes. It’s just going to take away services,” Finance Committee member Peggy Kruse said. “The exempt debt raises taxes and doesn’t change what’s available for town departments.”
Among the funding proposals outlined in the plan, $2.3 million would be used from the town’s general fund revenues. $9.7 million would be borrowed in non-exempt fashion, and $1.5 million would be borrowed using exempt debt.
Part of the issue for Jon Stumpf, Finance Committee chairman, was how the five-year plan seemingly doubled the town’s existing non-exempt debt by 2018.
“We have to make sure we take into account the taxpayers, how much they’re going to spend,” Stumpf said.
Paying for projects using exempt debt would force an election that would ask residents to on each individual request by ballot in order to approve raising taxes above the 2.5 percent maximum annual tax increase allowed under Proposition 21/2.
Stapczynski said doing that would allow voting taxpayers to decide what projects they want to approve and pay for.
“Put it to the voters, and have an election for these kinds of things to see what their priorities are,” Stapczynski said. “We may get 1,000, 1,200 people at Town Meeting, and we’ll be happy about that. But it’s nothing like having an election to really bring the voters out for them to individually decide.”
Stapczynski’s plan, as presented, only identified two projects that would use exempt debt: buying land for a new Ballardvale fire station, for which $1.5 million is being set aside, and a to-be-determined amount of money for a new Town Yard.
The anticipated shortfall facing the Bancroft Elementary School also came up at the meeting, as it hasn’t been determined how much the project is out of budget or how the town will close the gap. Early guesses put the deficit around $5 million by the time the project is done. Some have said exempt debt might be needed to put the project back on target.
Selectman Brian Major cautioned against using exempt debt.
“If we take a large amount of money and just add it to the exempt debt because, legally, we can, we’re going to lose a lot of face and credibility with the taxpayer,” he said. “They’re going to say, ‘Gee, are we going to give you another blank check for the next project you want to exempt? And you can increase that one?’ We’ve got to be extremely careful. It may be legal, but it may not be moral.”
At the end of the meeting, the three boards agreed to meet again on Monday, Dec. 17, to use the town’s debt analysis tool to see how the individual projects would impact the town’s debt and taxes. That meeting will be held at School Committee conference room, 36 Bartlet Street, at 7 p.m.