Safety building & golf course deal still needs prop 2 ½ override (Or not? Updated – again)

by beth on March 9, 2017

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Above: The Town still needs support from ⅔ of voters in the May election to fund the deal that Town Meeting voters OK’d last night to build a new police & fire station on St. Mark’s Golf Course and preserve the remainder of the land. (photos by Susan Fitzgerald)

[Editor’s Note: The following post was written based on information I received from the Town Administrator. However, I’ve received contradictory comments from two well informed sources. Al Hamilton and Kathy Cook both believe the override isn’t required to fund the project. Hamilton was a member of the Public Safety Study Committee (its former chair who researched the Town’s ability to fund the project). Cook is a member of the Advisory Committee which conducted its own study of the Town’s ability to pay for the course.]

Last night, voters approved a $27M deal to secure preservation of (most of) St. Mark’s Golf Course and build a public safety building.

Did you think it’s over? Well, it’s not over till it’s over. . . thanks to proposition 2 ½. That was just Step 1.

Step 2 is up to voters in the Annual Town Election.

If you sat through the Special Town Meeting last night until past 11:30 pm, you might have thought your vote solidified the deal to buy St. Mark’s Golf Course and build a public safety facility. Learning that the deal is still on the line may be frustrating.

And if you didn’t attend, maybe you were upset that only 10% of voters made a decision that will effect your tax bill. Learning that you still get to weigh in may be good news.

However you feel about it, you’re not done hearing about the deal. Article 1 as passed included language to put question on the May ballot for voters allowing an override to proposition 2 ½.

The authorization language in the article doesn’t seem contingent on the ballot passing. It authorizes funding not only through loans, but also transfer of funds or “other means”. Still, all presentations on the Town’s ability to fund the project focused on heavy borrowing.

So, I posed a question to Town Administrator Mark Purple about what happens if the May vote fails. His response was that the project can’t happen without it. And prop 2 ½ override requires ⅔ approval from voters.

That’s a much higher hurdle to clear than selectmen had when making their pitch last night.

After all, a lot of people who showed up and stayed for last night’s looong meeting had a deep investment in the outcome.

Residents from the Latisquama Road area were worried about the golf course being developed. And a CR on 93% of the property looked good to many of them.

Plus, strong supporters of our public safety personnel were determined to do something about the dreadful condition of the stations they work in.

Even those who came undecided, sat through presentations from officials and committees explaining the reasons behind decisions and costs and were able to ask questions.

Meanwhile many others who have questioned the costs in conversations with me around Town or through blog comments didn’t show up to vote last night. But it only takes 5-10 minutes to swing by your polling precinct in May. And it doesn’t require a babysitter.

It also doesn’t require a litmus test to verify voters took the time to really look at the facts rather than basing votes on what they’ve heard around town.

I asked Purple about selectmen’s Plan B if it fails. There hasn’t been “formal discussion” of one at this point.

Right now, the Town is focused on Plan A: educating the public to convince them to support the override.

So, expect to hear a lot more from the Town (and the deal’s opponents) on this over the next two months.

The Annual Election with ballot question is scheduled for Tuesday, May 9th.

Update (3/10/17 10:45 am): Comments posted to the story call the facts in question. See Editor’s Note inserted at the top of the post.

Updated (3/10/17 12:32 pm): I mistakenly referred to Al Hamilton as a current member of the PSSC. He resigned a few weeks ago.

1 Al Hamilton March 9, 2017 at 10:15 PM

I am not certain that if the Prop 2.5 debt exclusion voted by Town Meeting were to fail at the ballot that it would kill the project.

1. A debt exclusion places the debt in a special class that exempts it from Prop 2.5.

2. However, if the debt can be funded within the existing Prop 2.5 Levy Limit (The max amount of taxes that can be raised without a Prop 2.5 vote) then it can be funded regardless of the status of the vote at the ballot box. We have done this in the past.

3. Currently, our budget is about $2 million below the Levy Limit. The expected cost of the borrowing is on the order of $1.5 million. So, in the unlikely event of a failure at the ballot the debt could be funded “within the Prop 2.5 cap.” If the BOS chose to go that route then the deal is done.

4. Funding the debt “within the cap” would probably move up the date of a traditional Prop 2.5 operating override.

I am not opposed to taking on debt but the reality is that it will raise taxes and put downward pressure on operating budgets. .

2 beth March 10, 2017 at 8:20 AM

I was wondering if there was a way this could be funded without it. The response I got from Mark Purple was no.

But I know that you did work on analyzing the Town’s ability to fund this project. So, I know your response is informed.

It would be good to hear a public discussion of what happens if the vote fails. If the Town intends to proceed even if it fails, what would the economic impact be. That would certainly impact voters’ decisions in May.

3 Al Hamilton March 10, 2017 at 10:14 AM

Beth

I did a little homework and my understanding is correct.

1. All that is required to authorize debt and the taxes to repay that debt is a 2/3+1 vote of Town Meeting. The debt and the associated taxes have been authorized. We could, if the BOS was so inclined, begin the construction process tomorrow. (At least the building design portion that does not require access to the land.)

2. If you read the language of the warrant what we are voting for at the ballot is to make the taxes required repay the debt exempt from the Prop 2.5 limits. The ballot has nothing to do with authorizing the debt or the project.

3. If the ballot fails, the project can still proceed, however, the funds required to repay the debt would have to be counted against the Prop 2.5 limit. As things stand right now, we could do this without impacting services. I believe we have about $2,000,000 of unused taxing authority before we reach the Prop 2.5 limit. The debt service, by my calculation is about $1,500,000.

4. We are unlikely to see any significant impact on our tax bills until the FY 2020 budget. Which is when the project would be bonded. Whether we would still have a Prop 2.5 cushion at that point is anyone’s guess. There are other significant claims on that money such as our very large unfunded retirement obligations.

So there is the real prospect, if the ballot measure fails, that in the future we would have to cut services or authorize a permanent operating Prop 2.5 override.

Finally, one of the items that came up in the Advisory debt analysis is that our tax rate (Taxes/$1000 of assessed value) has been steadily rising and there is a hard cap at $25/$1000. Other towns will reach this limit before we do but the trend is in this direction in the long run.

4 Kathy Cook March 10, 2017 at 10:03 AM

I am not sure why Mr. Purple said that the debt exclusion ballot question failure kills the project. Mr. Hamilton is correct in pointing out that we could pay for the project within the annual levy limit. Using a 3% interest rate and financing $27MM over 30 years requires about $1,400,000 of annual debt service which currently fits into our levy capacity. Putting the new debt service inside the levy spending would certainly force Southborough to tighten its fiscal belt – which might be a good thing. So I agree with Mr. Hamilton that the failure of the debt exclusion does not kill the project. In fact we should have a robust debate as to where the debt belongs – i.e. inside or out.

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