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

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do not directly align with the longer term of the municipal bond. In this model, the bonded costs are the then -year project costs net of the projected MSBA reimbursement. ESTIMATES OF YEARLY PROJECT COSTS To pay for projects with significant costs, State law (MGL Chapter 44) allows bonding the debt with payments allocated in the manner prescribed and over a period of time in accordance with the law. The bond terms are for 10, 15, 20 or 30 years depending on the project type. Most municipal building projects may have a term on the bond up to 20 years, and school building projects may have a term up to 30 years. For the larger projects, the design and construction costs — net of any presumed MSBA reimbursement, if applicable — are distributed over the course of the bond terms in the following manner. The principal or project cost is divided by the number of years of the term and listed each year. The interest rate for a municipal bond varies with the market but is estimated as 4% per year and applied to the remaining principal. Principal and interest are added to calculate the yearly cost of the project. Yearly project costs therefore decrease over the term of the bond. FINANCIAL MODELS OUTPUT: PROJECT PHASING AND COMPARISON TO FUNDING SOURCES Two financial scenarios are included as the first two spreadsheets in Appendix F. The starts dates of the municipal projects are according to the sequence recommended by the Committee, and the start dates of the school projects are according to the School Committee's Master Plan. A one -year period is given to the feasibility, design and engineering process for each of the larger municipal projects, with the construction bonding beginning in the following year. The school project planning and design processes are anticipated to require two years for consensus building and design. Bond costs, once begun, continue for the indicated term of that bond and are allocated to the presumed source of funding: GF and /or CPF. As noted earlier, presumed MSBA funding for two of the three school projects has been netted out of the project costs and therefore the bonded amounts. The resulting projected debt - service costs are totaled for each fiscal year in row 45(c) for GF and row 52(h) for CPF and then compared with the presumed available balance for each of the sources, as described below. Prior Excluded Debt Service The Town's voters have previously voted in debt - exclusion referendums to exclude the costs of specific projects from the limitations of Proposition 21/2. (Legally, those referendums only exclude the projects, not any specific costs for each project, but if the actual cost should materially exceed the amount last cited leading up to 40 LEXINGTON, MASSACHUSETTS