2013-08-30-Ad hoc Townwide Facilities Master Planning Committee (Final Report of Committee)

Browse Search

FINANCIAL MODELS Projected Town Budgeting Part of the information used by the Committee to make the recommendations in this report was financial models created to determine what potential costs may apply and if phasing of the capital facilities projects could alleviate some of the financial burden on the Town taxpayers. Those models, as discussed in this chapter and with additional information in Appendix F, have been prepared using the following methodology and criteria. INPUT FOR THE FINANCIAL MODELS The inputs to the models included project costs budgeted by sources of funds. The project costs are adjusted to be future -year amounts based on the start dates for each project in the schedule proposed by the Committee based on its recommended order of executing the projects. These total costs are then projected as yearly costs of indebtedness. The project costs consist of the principal and interest payments due in accordance with the listed terms of the debt instrument. For the purpose of this report, it is assumed that all projects will be financed with debt so the costs of long -term bonds issued by the Town are considered. These costs are then added together and compared with the sources that are available to fund the municipal and school facility projects. Major renovations are identified as "building renewal" and are included with replacement projects. Not included in these models are the costs associated with any short -term debt that may be part of a project's overall financing such as the interest -only Bond Anticipation Notes (BANs). BANs are routinely used to bridge between the initial need for funds and the point when the Town issues the long -term bonds. BANs typically carry an interest that is currently much less than 1 %, and thus that cost is not a material issue. It has been assumed that the majority of any year's cash availability for capital after covering that year's primary obligation to service the debt would be used for routine, yearly capital needs as opposed to the projects addressed in this report. However, CPF cash may be used for smaller project elements such as design fees for historic preservation projects. Project Budgets Project budgets are derived by taking previous project estimates developed within the programming and conceptual planning for each of the buildings and projecting them to future costs using an inflationary factor of 3.5% (see Table 2). The project costs TOWNWIDE FACILITIES MASTER PLANNING 37