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Date: 7/23/2015
LONGMEADOW – Selectman Mark Gold recently made a presentation to the rest of the board regarding his proposal to increase savings for long-term capital funding from less than $1 million to at least $2.2 million during the next five years.
This plan could set aside funding for projects such as a new Adult Center or Department of Public Works facility, Gold told Reminder Publications.
The funding mechanism would not pay for any potential projects in full, he noted. However, it would reduce the overall cost of a future large project.
“These are projects that might cost $10 million,” Gold noted.
He added that this proposal would be funded through a percentage of the town’s tax revenue. During fiscal year 2017 (FY17) that number would be 2.5 percent and each year that percentage could increase by 0.5 percent.
Town Manager Stephen Crane said the board revised its capital improvement policy during the FY16 budget process, increasing the current tax revenue percentage going to the Capital Stabilization Fund to 2 percent.
At least $200,000 could be put into the Capital Stabilization Fund each year, beginning in FY17 if the board approves of the idea, Gold said. There is currently a total of $1.12 million in the stabilization fund.
Additionally, $50,000 could be used for the town’s capital bond commitment. The FY16 budget does not put aside any money for this aspect of Gold’s plan, he noted.
The $50,000 bond commitment would essentially help replace the $200,000 taken out of the town’s revenue each year, Gold said.
“That commitment to capital, if you follow that plan, to go from $900,000 [in long term capital savings] in [FY15] up to $2.2 million in FY17,” he added. “Do I believe it’s going to happen? It might, but things might happen and we might have to cut back on it. At least it’s a plan.”
The idea to increase the town’s long-term capital savings was the brainchild of Gold and former Selectman Paul Santaniello, who were both appointed to the Finance Subcommittee, Gold said.
“How could you possibly fund projects like [a new Adult Center] without doing a Proposition 2 ½ override or debt exclusion payment, where now everybody’s taxes go up not only 2.5 percent, but also the cost of that project?” Gold said.
“We looked around and there are some communities that have taken a different approach,” he continued. “What they said is, ‘We can put aside a portion of each year’s capital to pay the bond of a long-term project.’”
Gold said the plan would allow the town to borrow money for a major project within the limits of Proposition 2 ½.
Crane said he considers the plan to be a good strategy for the town to adopt.
“The town went through a phase where there was a reduced investment in the infrastructure … Deferred maintenance is expensive maintenance,” he added. “It’s almost always going to be cheaper to fix something today than it its to fix it tomorrow.”