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HomeMy WebLinkAbout1958-01-27-CEC-min-001.pdf DIETING OF CAPITAL EXPENDITURES COMM. WITH APPROPRIATIONS COMM. January 27, 1958 A meeting of the members of the Capital Expenditures Committee was held with the members of the Appropriations Committee on Monday January 27, 1958 at 9:45 p.m. in thebCary Memorial Building. Those present for the C.E.Comm. were Sanborn C. Brown, chairman, Dan H. Fenn Jr., Rosemary Fitzgerald, Irving H. Mabee and Norman Royle, with Mabelle Tucker acting as secretary. Seven or eight members of the Appropriations Comm. were present, the chairman being absent. The acting chairman asked Mr. Brown what the C.E.Comm. had in mind. Mr. Brown replied that the C.E.Comm. had been meeting with members of various town committees (naming them) , and that at present the requests for Capital expenditures in 1958 were esentially the same as these listed last year, except for the renovation of the Junior High which had been voted down last year and which was being re- quested this year at a higher figure - $587,000 instead of $450,000: In answer to the question as to why it was costing more, Mrs. Fitz- gerald said that the major part of the cost was for plumbing and heating, of which there was a lot to do in an old building. Mr. Hann said that this year 's plan is nearer to the school committee 's ori- ginal ideas on renovation, which had been cut down last year to an estimate of $450,000,. The acting chairman asked Mr. Brown for a run-down of capital expendi- tures for 1958, which Mr. Brown gave as follows: Proposed Capital Expenditures for 1958 Schools $ 2,600,000 (incl. Jr. Hi & Barnes Prop) Public Works Water t 140,000 Sewers 400,000 ! ' Drainage 57,000 Streets 20't 200,000 Sidewalks 40,000 Equipment 1 45,000 Recreation 80,000 (Willard land & $20,000) Fire Comm. 26,000 TOTAL $ 3,588,000 Mr Brown asked the Approp. Comm. what they were going to recommend bonding and what to be paid for out of taxes; the acting chairman replied that the committee had not gone that far yet - however, schools and water wand be OIL bonded outside the debt limit. Mr. Brown gave figures for Lexington' s debt ratio for the next five years; these figures were based on bonding less than the town usually does - nothing for streets and only 300,000 out of $400,000 requested for sewers. In 1957 the ratio was 1 .8%• 1958, 14.8%• 1959, 14.6%; 1960, 14.5% 1961 15.9%; 1962 15.7 . The corresponding tax rates were $54, $58, $57: $60 and $61 assuming valuation to rise $4,500,600 each year. Mr. Brown then gave figures for the debt ratio assuming that 0300,000 for sewers were put on the tax rate each year. Page 2 MEETING OF CAPITAL EXPENDITURES COMM. WITH APPROPRIATIONS COMM. cont. January 27, 1958 These figures were: 1958, 14.2%; 1959, 13.8%; 1960, 13.2%; 1961 14.3%; 1962, 13.9%, The corresponding tax rates in each year were $5 higher than the previous ones. Mr. Brown stated that if we hold down our debt ratio by putting sewers on the tax rate each year to the extent of $300,0000 it will help our borrowing capacity. The fact that our debt ratio is over the state 's 10% figure is affecting our interest rates now. A. member of the Approp. Comm. said that he gets the report from the First National Bank every week on new issues, and that other towns with better credit ratings than Lex. have higher interest rates - some are up to 4% now. Mr. Brown asked which towns these were, and the man was not able to name any in this locality. Mr. Brown said that Lexington does as well as it does because it is an historic town, like Concord, and can capitalize on its $ "museum piece" aspect. However, he was worried about financing prospects if the debt ratio went skyrocketing. A member of the Approp. Comm. (Rowse, I think) expressed the opinion that nothing would stop spending faster in Lexington than putting a big item like sewers on the tax rate. Another member% asked if it would be wise to put the renovation of the Junior High into 1959, a low year for capital expenses. Mr. Brown replied that this woud not help the debt ratio. Mrs. Fitzgerald said that if the bond will eventually come on the tax rate it might be better to stabilize the debt now and take a Gump in the tax rate. Mr. Brown pointed out that per capita taxes in Lexington have gone up only 8% since 1944, whereas per capita buying power has gone up 72%. A member of the Approp. Comm. (Rowse, I think) seemed to think that his taxes were a lot higher than in 1944. Another Approp. Comm. member asked what about a realistic revaluation be the town; Lexinton property is now assessed at an average of 48% of its market value. Mr. Brown said thathis was outside the C.E. Comm. province; however, he has heard of cases in three neighboring states, Conn., R. I. and 111.3., which went to the Supreme Court, with the result that the towns were required to go to a 100% valuation. Mr. Rowse (?) thoght that Lexington did a good job of equalizing valuetions. Mr Brown said that when tax rates are equalized for differences in assessing practices, the average equalized rate in the state is 32, while Lexington's is $26. Atm Lexington has the highest per capita debt - $320 - of any town of over 10,000 population. Someone asked if per capita taxes in other towns have gone up more rapidly than Lexington's. Mr. Brown replied yes. As far as the debt ratio goes, Lexington has been doing as well as can be expected for its rate of growth. He showed a graph of debt ratio against percentage growth Lexington's growth is sigh and its debt ratio is above the 10% line. Mrs. Fitzgerald commented that she imagined that the people in Belmont carried on 15 - 20 years ago when they had their growth. Mr. Fenn said that Needham is a town which has done something about this, with their industrial development. Someone asked what the percentage of industrial property was in Lexington compared to other towns. el 1 Page 3 MEETING OF CAPITAL EXPENDITURES COMM. WITH APPROPRIATIONS COMM., cont. January 27, 1958 Mr. Brown replied that the percentage of industital property in Lex- ington was very low compared to other towns. He showed a graph of per capita debt and debt ratio over some years (?) in Lexington and Needham, and showing the effect of the Cabot Cabot and Forbes industrial development on Needham 's debt ratio. However he pointed out that bringing an industrial development into a town may have a salutary effect for five years or so, but that the town can get back into trouble if it continues its old practices. Someone asked if Mr. Brown's figures took into account whether we would have inflation or deflation in the future. Mr Brown said that the effect of past inflation had been removed from the figures by basing them on the 1949 dollar; if you assume future inflation it might be better to pay back in the future in cheaper dollars. The meeting adjourned at about 10:30 p.m. and the C.E. Committee went to Dan Fennts hose to talk over work on the report.