2007-04-23-ATM-AC-rpt3 - Laserfiche WebLink

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APPROPRIATION COMMITTEE 3rd REPORT, April 23, 2007, TO 2007 ATM From along-term perspective, there will be many advantages to having a new facility. Again, coming back to points in the Preface of this review, these advantages include: • the efficiencies to be obtained by having the DPW operations, DPW administration, and the Engineering Department in one location, • having all engineering drawing archives in one location rather than split between the Town Offices Building and 201 Bedford Street, • locating employees in spaces designed for efficient communication within each DPW division and among the various divisions, • providing suitable space for a combined facilities department that will provide enhanced expertise and better maintenance of both school and municipal buildings, • eliminating the present need to stack vehicles indoors at close of business and to unstack them every morning, • improved emergency response times, • much improved lighting and working conditions, • better maintenance of vehicles and equipment, • radiating less noise and creating less light pollution that bothers the neighboring residents, and • minimized operating cost for acode-compliant facility From either a financial or non-financial perspective, the long-term benefits of a new facility are significant. The Town expends at least $4M (and possibly much more) each year on the internal operations of the DPW. Over the next 50 years, those expenditures will total more than $200M in present-day dollars. Such a high number suggests that the cumulative life-cycle cost savings in dollars or improvements in services from efficiencies such as those noted in the above list could be comparable to, or even greater than, the immediate cost of a new facility. However, even though we do not have a quantitative projection and do not see the feasibility of accurately estimating the savings from more efficient operations, it is our conclusion and recommendation that the Town should proceed now with the proposed facility. Based on the substantial information that we have received about the project since early December, we believe that the scope of the project is appropriate. Further significant reductions in the facility for the purpose of reducing the capital project costs would likely lead to relatively higher operating costs over the long term, would adversely impact DPW operations, and thus would not be in the Town's interest. The proposal before Town Meeting is to appropriate the balance of the funds (i.e., $25,180,000) needed to complete the project under this Article, contingent on the approval of the project by the voters in a debt-exclusion referendum this June. The debt exclusion would cover the entire project including the $2.32M in funds that have already been appropriated. If the project were to be approved by Town Meeting and the voters, the funds would be borrowed to do the work, and the debt would be repaid over a 20-year period. The exact details of the debt repayment are not yet determined. For example, as water and wastewater operations are conducted under the DPW umbrella, some of the debt could reasonably be repaid from those Enterprise Funds rather than through the exempt tax levy. If that is done, while any increase in utility bills resulting from those Enterprise Funds absorbing a portion of the debt repayment will not be eligible for deduction for purposes of Federal income-tax computation; as a practical matter, we would expect any such lost deduction to be minor. We see the cumulative net cost to the average resident being more or less similar regardless of how the debt is repaid. This Committee unanimously (9-0) recommends approval of this Article. 4