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CAPITAL EXPENDITURES COMMITTEE REPORT TO NOVEMBER 2,2015, STM#1
<br /> In addition, the SC would like to purchase the Pelham property for a future use based on future priorities,
<br /> and would like to replace and upgrade the Diamond and High School HVAC systems that are both
<br /> approximately 60-years old. The HVAC upgrades items are in the current plan, their estimated costs will
<br /> be refined, and funding for completion will be sought at a future Town Meeting(s).
<br /> The at-bid cost estimates of the SC-plan components are not known since the designs are not final;
<br /> however,rough estimates have been provided and are shown in the below Table 1.
<br /> While the Town in some cases uses estimates that appear to have greater precision,we prefer to use round
<br /> numbers that reflect the true nature of early-stage estimates. The total cost of the currently planned
<br /> elementary and middle school projects is approximately $124 million–$137 million. Within the five-year
<br /> planning horizon the SC plans a Pre-K building for approximately $11 million to bring the school
<br /> building request to a total to $135 million–$148 million. As noted, in this time period the Town is also
<br /> expecting to purchase the Pelham property and to upgrade (or replace) the existing school building for as-
<br /> yet-unspecified amounts. The Town is also contemplating the need to replace the fire and police
<br /> headquarters for approximately $20 million each. That would bring the total that might be added to the
<br /> excluded-debt burden in the next 5 years to $175 million–$188 million, plus the cost to acquire and
<br /> upgrade the Pelham property.
<br /> Table 1:Debt-exclusion projects—current and near-term future. Note that in addition, there is
<br /> the cost to acquire and upgrade the Pelham property.
<br /> Property Comment Project Cost with MSBA Project Cost without MSBA
<br /> Hastings with MSBA $42,000,000
<br /> Hastings without MSBA $55,000,000
<br /> Modulars Six Classrooms $3,000,000 $3,000,000
<br /> Middle Schools $56,000,000 $56,000,000
<br /> Diamond HVAC $10,000,000 $10,000,000
<br /> High School HVAC $13,000,000 $13,000,000
<br /> Existing Pro erties Subtotal $124,000,000 $137,000,000
<br /> Purchase Pelham &Upgrade School TBD TBD
<br /> Pre-K Stand Alone $11,000,000 $11,000,000
<br /> Schools subtotal $135,000,000 $148,000,000
<br /> Police Headquarters $20,000,000 $20,000,000
<br /> Fire Headquarters $20,000,000 $20,000,000
<br /> Total (without Pelham) $177,000,0001 $188,000,000
<br /> MSBA=Massachusetts School Building Authority
<br /> As explained below, it is very likely there will need to be additional school capital projects that will
<br /> require additional debt-exclusion support by the voters.
<br /> The funding is expected to be raised as excluded debt. For those parts of the project that have a useful life
<br /> of at least 30 years, the funds would be raised using 30-year bonds. The increased property tax for the
<br /> average-value residential parcel ($887,000) for these school projects is expected to be approximately
<br /> $779 in the peak year (FY2021)—and would ramp up to that amount over several years as the funding is
<br /> borrowed over the course of the projects. The comparable, approximate, property tax increase for the fire
<br /> and police stations would peak at $179 bringing the peak total to $958. (That increase is to a base tax
<br /> that is most likely to increase each year to the limit allowed under Proposition 2'/2 and as the result of any
<br /> Operating Overrides during that period.) Falling outside the five-year window of this Committee's
<br /> Capital Plan, but not outside its forward-looking attention, is the potential for extensive High-School
<br /> renovations or major building-component replacements. Additional construction if the current SC plan
<br /> does not adequately address the enrollment need may result in additional debt burden. Also the increase in
<br /> the school operating budget because of the additional expenses associated with educating the increased
<br /> enrollment and staffing the additional space in the SC Plan in which to provide that education may well
<br /> create the need for an operational override in the near future. That would result in an additional property
<br /> tax increase.
<br /> Discussion
<br /> The Pre-K is overcrowded, operating primarily in its dedicated space at Harrington; however it has
<br /> already overflowed its space in Harrington. It now also uses space in the lower floor of the Central
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