|
CAPITAL EXPENDITURES COMMITTEE REPORT TO 2013 STM(Mar 18th)[corrected]
<br /> For several years, Lexington has searched for a suitable site for a Community Center ("Center") and the
<br /> Scottish Rite property at 33 Marrett Road appears to satisfy many of the requirements for such a Center.
<br /> While this Committee will not comment on the policy questions of(1) the need for a Community Center,
<br /> (2)whether this is a suitable location, or (3)whether it is a "fair price" being offered; however, as
<br /> advisors to Town Meeting, we offer the following thoughts regarding the proposed financing.
<br /> As shown above, a $7,390,000 portion of the purchase is proposed to be funded with CPF debt and
<br /> $262,500 of CPF cash for the ancillary costs.
<br /> Those ancillary costs, based on initial estimates, include formal surveying and, if needed,
<br /> additional division of the lot ($15,000); legal expenses, including documenting the property restrictions
<br /> required by the Community Preservation Act (CPA) and paying a 3rd party (likely the Citizens for
<br /> Lexington Conservation) to hold that restriction($120,000); the site assessment, as needed($12,500); and
<br /> the first-year's debt service and issuance costs on a Bond Anticipation Note [BAN] ($115,000).
<br /> Not included in this Article's request is a current estimate of$100,000 for Design&Engineering
<br /> (D&E) of the code-compliance actions required for initial occupancy and for schematic-level drawings
<br /> for long-term building improvements to expand the functions available at the Center as that D&E is
<br /> considered as outside of the scope of this Article. Instead, those funds will be requested at the concurrent
<br /> 2013 Annual Town Meeting (ATM) under Article 14(n), Public Facilities Bid Documents, where the
<br /> previously contemplated request of$75,000 GF cash will now be supplemented with $100,000 of CPF
<br /> cash. Also not included in any request to either of these Town Meetings would be the funding to
<br /> implement work required for initial occupancy, subsequent code-compliance actions, or any of the full
<br /> D&E and implementation funding for the long-term building improvements to expand the functionality.
<br /> All those would be addressed at one or more subsequent Town Meetings.
<br /> This level of funding most likely commits the CPF to significantly longer-term bonding than has
<br /> previously been used. Since our acceptance of the CPA in March 2006, CPF debt financing was issued for
<br /> four land purchases: Busa Farm, Leary Land, Cotton Farm, and Wright Farm—the first three of which
<br /> were funded over an aggressive 3-year term and are now paid off. Regarding the Wright Farm funding, as
<br /> the possibility of purchasing the Scottish Rite property was known prior to the issuance of the debt for
<br /> Wright Farm, its purchase has been initially funded using a BAN which will come due next February
<br /> when the Town issues bonds. By deferring the bonding, the Town has more flexibility for the bond terms
<br /> for this and other potential CPF-funded projects like major upgrades to the Cary Memorial Building and
<br /> the Irving H. Mabee Pool Complex ("Pool Complex"), to cite just two. If all three of these projects—
<br /> those two and a new Center—come to fruition, then they will all most likely require 10-year bonding in
<br /> order to fit the debt service into the estimated CPF revenues and still leave some funding available for
<br /> other projects.
<br /> The Town Manager and staff have presented a multi-year, pro-forma model (see the Appendix) showing
<br /> the claims against the CPF including this purchase and the other projects (except for the last phase of
<br /> upgrades as the Senior Center in the Muzzey Condominiums), debt service, and the Administrative
<br /> Budget amounts that the Community Preservation Committee is recommending to the 2013 ATM.
<br /> Several other major out-year claims will, or are likely to, compete for funding by the CPF. Those other
<br /> claims are for the balance of the Wright Farm debt service, additional D&E through formal bid
<br /> documents for the build-out of the Center, completion of the Center's build-out, completion of the Cary
<br /> Memorial Building upgrades, the Pool Complex upgrade, and a Center Track project. The model
<br /> demonstrates a potential CPF funding scenario using 10-year-term bonds that still leaves the CPF with a
<br /> positive balance and adequate yearly projected revenue to cover all those claims while still leaving some
<br /> revenue available to cover currently unknown, albeit modest,projects.
<br /> This Committee views that model as having important caveats associated with it.
<br /> On the negative:
<br /> • It assumes that the CPA State match is maintained at the current 27% level. While it is
<br /> unlikely that the match will drop to 0%, reductions are possible due to more communities adopting the
<br /> CPA and/or reductions in Registries of Deeds collections of surcharges on the filings. We cannot predict
<br /> 2
<br />
|