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APPROPRIATION COMMITTEE REPORT TO NOVEMBER 2011 STM
<br /> The Capital Expenditures Committee report provides additional information and perspective on the ra-
<br /> tionale for and composition of the project. The report is available on the Town website.
<br /> Financing the Project
<br /> As noted above, Town Meeting has already appropriated a total of$1,030,000 for D&E work in prepara-
<br /> tion for the construction phase of the project. The Town has raised these funds through short-term bor-
<br /> rowing; these funds have largely been spent or committed in preparing project plans, documents, cost es-
<br /> timates, etc. If Town Meeting appropriates the construction funds and the debt exclusion referendum is
<br /> successful, the short-term notes will be re-characterized as exempt debt and both the principal and interest
<br /> will be fully repaid in FY13 outside the tax levy. If the project does not receive the necessary Town Meet-
<br /> ing and referendum approvals, the notes will be rolled over and the debt will be repaid over multiple years
<br /> within the levy.
<br /> If Town Meeting approves this Article and the exclusion of the project debt is approved by the voters, the
<br /> $21,670,000 in funds needed for the construction phase would be raised through the issuance of twenty-
<br /> year bonds. The first payment on these bonds would be due in FY14. Principal payments would be con-
<br /> stant through the life of the bonds. The first interest payment would therefore be the highest, and the sub-
<br /> sequent payments would then decrease over the 20-year period. Payments would continue through
<br /> FY2033. The projections shown below assume an interest rate of 4%, which is slightly higher than recent
<br /> successful bond offerings completed by the Town.
<br /> Table 1 shows the Town's estimated debt service payments for the first 10 years of a 20-year term. The
<br /> table includes data for the Bridge and Bowman projects as well as the pending Estabrook reconstruction
<br /> project that will not be considered by Town Meeting until the 2012 Annual Town Meeting. Taxpayers
<br /> would see the greatest financial impact in FY14 and declining impact from this debt over the 20 years.
<br /> Table 1: Exempt Debt Service if Both the Bridge/Bowman and Estabrook Projects are Approved
<br /> Fiscal Existing Bridge/Bowman Estabrook
<br /> Year Exempt Debt Total
<br /> Debt Service Debt Service
<br /> Service
<br /> 2012 $5,728,255 $5,849,706
<br /> 2013 $4,792,384 $1,049,000* — $5,841,384*
<br /> 2014 $4,663,204 $1,950,300 $2,295,000 $8,908,504
<br /> 2015 $4,324,377 $1,906,960 $2,244,000 $8,475,337
<br /> 2016 $4,189,516 $1,863,620 $2,193,000 $8,246,136
<br /> 2017 $3,672,145 $1,820,280 $2,142,000 $7,634,425
<br /> 2018 $3,540,570 $1,776,940 $2,091,000 $7,408,510
<br /> 2019 $3,303,431 $1,733,600 $2,040,000 $7,077,031
<br /> 2020 $3,151,065 $1,690,260 $1,989,000 $6,830,325
<br /> 2021 $2,977,522 $1,646,920 $1,938,000 $6,562,442
<br /> 2022 $2,869,925 $1,603,580 $1,887,000 $6,360,505
<br /> 2023 $2,750,703 $1,560,240 $1,836,000 $6,146,943
<br /> Notes:
<br /> (1)*–Includes repayment of$1,030,000 in principal and approximately$19,000 in interest on the short-term debt issued for the
<br /> Bridge/Bowman D&E.
<br /> (2) The Estabrook debt service was estimated assuming a loan of$25,500,000 (total cost less Massachusetts School Building
<br /> Authority reimbursement)over 20 years with a 4%interest rate.
<br /> Taxpayer Impact
<br /> Table 2 shows the estimated impact of the exempt debt for a "tax bill on a residence of average value"
<br /> over the first 10 years of the 20-year term. The dollar amounts are the component of a residential property
<br /> tax bill that could be attributed to the exempt debt for a resident whose property was assessed at$697,000
<br /> in FY11. The total tax bill in FY11 for this "average taxpayer"was $9,936.
<br /> Z CEC Report to the 2011 STM- http://www.lexingtonma.gov/towngovernment/CECfinalReport2011STM.pdf
<br /> Page 7
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