HomeMy WebLinkAbout2007-10-10 Appropriation Committee ReportAPPROPRIATION COMMITTEE
TOWN OF LEXINGTON
REPORT TO THE
2007 SPECIAL TOWN MEETING
October 10, 2007
Released October 9, 2007
Appropriation Committee Members — Fiscal Year 2008
Alan M. Levine Chair • Rodney E. Cole Vice -Chair • John Bartenstein Secretary
Robert N. Addelson (ex- officio; non - voting) • Deborah Brown • Richard Enrich
Pam Hoffman • Michael J. Kennealy • Susan McLeish • Eric Michelson
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
Summary of Warrant Article Recommendations
2007 Special Town Meeting (STM)
Abbreviations: GF = General Fund; EF = Enterprise Fund
Ar-
Funds
Funding
Committee
ticle
Title
Requested
Source
Recommendation
STM, October 10, 2007 at 7:30 PM
2
Approve TIF Agreement(s)
None
n/a
Approve
3
Amend FY 2008 Operating Budget
See Text
GF
Approve
4
Amend FY 2008 Enterprise Fund
Budgets
See Text
EF
Approve
5
Municipal Electric Utilities
None
n/a
Approve
Resolution
Page 2 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
Contents
Sumnurry of Warrant Article
Warrant Article Analysis and Recommendations ........................................................................... ..............................4
Article 2: Approve TIF Agreement(s) ............................................................................. ..............................4
Article 3: Amend FY2007 Operating Budget .................................................................. ..............................8
Article 4: Amend FY2007 Enterprise Funds Budgets ..................................................... ..............................9
Article 5: Municipal Electric Utilities Resol ution ........................................................... .............................11
Appendix A: Schedule for mitigation payments totaling $3.1 million ........................... .............................12
Appendix B: Demonstration of various revenue scenarios for parcels 200, 300, and 400 ........................... 13
Page 3 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
Warrant Article Analysis and Recommendations
Article 2: Approve TIF
Agreement(s)
Funds
Requested
Funding
Source
Committee
Recommendation
None
n/a
Approve (9 -0)
Background
Following its acquisition by new owners, Patriot Partners, about four years ago, the property which
formerly housed Raytheon Corp. in Lexington became known as Lexington Technology Park. At the
2004 Annual Town Meeting, per request of Patriot Partners, the property zoning was changed to increase
the allowed floor space and to permit biotechnology as well as office uses. Although the zoning now
allows up to 631,600 sq. ft. of gross floor area, only a much smaller area is rented, and there are only
three buildings on site (at 125 Spring St., 300 Patriot Way, and 500 Patriot Way) even though there is
room for and allowance under the new zoning for two additional buildings (at 200 and 400 Patriot Way).
Only the buildings at 125 Spring St. and 500 Patriot Way are presently leased; the building at 300 Patriot
Way is vacant.
Shire Human Genetic Therapies, a unit of a global company, is a biotechnology /pharmaceutical firm with
operations in Cambridge that approached the Town earlier this year to discuss the possible relocation of
its Cambridge office and lab space to Lexington Technology Park and, in particular, development of a
manufacturing facility and additional lab /office space at the site. Shire has since occupied the building at
125 Spring St. by taking over the lease of another biotech company which vacated the building before its
lease was up, and plans to lease and renovate the presently vacant building at 300 Patriot Way for lab and
office use. Shire also proposes to construct new buildings at both 200 and 400 Patriot Way to house the
manufacturing and additional lab and office space. Shire has requested that the Town agree to a Tax
Increment Financing (TIE) arrangement that would provide them with a reduction in their property tax
obligation (technically an obligation of the property owners but would effectively be an obligation of
Shire) on the new construction only and allow them to qualify for an additional State investment tax
credit benefit. Shire is also seeking additional State incentives, some recently proposed by the Governor.
A team representing the Town (the Town Manager, the Assistant Town Manager for Finance, Lexington's
Economic Development Officer, and Town Counsel) and representatives of Shire HGT have negotiated
an agreement on a TIF schedule and terms. The purpose of this Article is to seek Town Meeting
approval of the proposed agreement.
The draft agreements and other pertinent information may be found on the Town's website at
http:// ci. lexington. ma. us/ townmeeting /stm10_10_07documents.htm .
Basic description of the TIF agreement with Shire
The TIE agreement consists of two parts: one for general lab and office space buildings at 200 and 300
Patriot Way and one for a manufacturing facility at 400 Patriot Way. For the 200 and 300 Patriot Way
buildings, the FY 2008 assessed value of the land and the currently existing 300 Patriot Way building is
taken to be the initial base value; no building is currently standing at 200 Patriot Way. The base value
will be increased each year by a percentage equal to the percentage increase in the total assessed value of
commercial and industrial property in Lexington. However, if the total commercial /industrial value
decreases, the base value will remain unchanged. The TIE applies to these properties over the 20 -year
Page 4 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
interval of FY 2009 through FY 2028. In each of these fiscal years, the property tax would be reduced by
a percentage given in a table in the agreement applied to the incremental assessed value that is defined as
the actual assessed value of the property less the current base value. For the parcel containing the yet -to-
be constructed building at 400 Patriot Way, the initial base value would be the assessed value of the land
in FY 2009, and the schedule would cover the 19 -year interval of FY 2010 through FY 2028.
The agreement details certain conditions to the Town's granting of the tax exemption. These include
commitments from Shire to:
• create a minimum of 600 permanent full -time jobs
• make a minimum of $300 million in capital improvements on the site
• contribute $250,000 to the Cary Memorial Library Foundation
• contribute $150,000 to the Town ( "for a use recommended by the Board of Selectmen ")
• pay $2.6 million to the Town for infrastructure improvements (subject to the Town's
obligation to seek State grants for such projects; Shire's $2.6 million obligation will be
reduced by any amounts the Town receives from the State)
Additionally, the agreement is conditioned on a contribution to the Town from Patriot Partners of
$100,000.
Appendix A details the expected pay -out schedule for the mitigation payments described above (which
total $3.1 million). Our analysis is predicated on Shire developing all three of the 200, 300 and 400
parcels as outlined in the TIF agreements. We are seeking clarification that the $3.1 million mitigation
payments must be paid in full even if Shire chooses to proceed with only the 200/300 parcels or only the
400 parcel.
Analysis
In our analysis, we examine the financial benefits to the town (from property taxes and the potential $3.1
million in mitigation payments) under various scenarios /assumptions to answer the question "Is the Town
likely to be better off financially if it approves the TIF agreement or if it votes it down ?" For all
scenarios, we compute FY2009 net present values assuming a 4% or 5% deflator consistent with the
recent history of implicit price deflators for state and local government services.
The scenarios, illustrated in detail in Appendix B, differ according to two main variables:
• Time to build -out, and
• Magnitude of tax revenues (tax revenues are a function of both assessed values and property tax
rates).
Since the parcels relevant to the TIF agreement are those at 200, 300, and 400 Patriot Way, these are the
only parcels considered in this analysis. The parcels at 125 Spring St. and 500 Patriot Way are currently
occupied (by Shire and CBSET, respectively) and are outside the scope of the TIF agreement.
The scenarios can be described as follows:
1) TIF is approved, and Shire follows projected build -out.
Four scenarios that each includes both tax revenues and the $3.1 million in mitigation payments
stipulated in the TIF agreement:
a) The tax revenue follows the model presented by the Town Manager and the Assistant
Town Manager;
Page 5 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
b) The tax revenue equals that in (a) + 20 %. This illustrates the impact of higher tax
revenues;
c) The tax revenue equals that in (a) - 20 %. This illustrates the impact of lower tax revenues;
d) The tax revenue equals that in (a) - 40 %. This illustrates the impact of even lower tax
revenues.
2) TIF is turned down, but Shire follows projected build -out anyway. Four scenarios, as
described above, but the tax revenues to be received by the Town are not diminished by a TIF, and
there are no mitigation payments.
3) TIF is turned down; after a one -year delay another tenant comes forward without a TIF and
executes a build -out plan similar to Shire's full build -out plan. Four scenarios present the impact
of a one -year delay on the build -out schedule and thereby on tax revenues, assume that no mitigation
payments would be received, but otherwise follow the assumptions described under (1).
4) TIF is turned down; after a two -year delay another tenant comes forward without a TIF
and executes a build -out plan similar to Shire's full build -out plan. The four scenarios are like
those in (3) except that a two -year delay is assumed.
5) TIF is turned down; after a four -year delay another tenant comes forward without a TIF
and executes a build -out plan similar to Shire's full build -out plan. The four scenarios are like
those in (3) except that a four -year delay is assumed.
6) TIF is turned down; no other tenant comes forward to build out parcels 200 and 400. The
four scenarios adopt the assumptions in (1) above regarding the building at 300 Patriot Way, but do
NOT include any new tax revenue from buildings at 200 and 400 Patriot Way. No mitigation
payments are assumed.
The bottom lines of these scenarios are summarized in the matrix below, where we show FY 2009 net
present values (computed using a 5% deflator) of the totals of property tax and mitigation revenues (in
millions of dollars) the Town might receive during the 20 -year period FY09 — FY28 for the 200, 300, and
400 parcels at Lexington Technology Park. We emphasize that these figures are intended to show the
relative impacts of the various scenarios on Town revenues using reasonable assumptions in regard to tax
rates and property values. Given that actual property values and their changes over a 20 -year period are
highly uncertain, one should NOT regard these numbers as projections.
Scenarios for NPV @ 5 %, in million $$
development of parcels
200, 300 & 400 a) 100% b) 120% c) 80 d) 60%
1 Now, w /TIF
$30.79
$36.40
$25.17
$19.55
2 Now, no TIF
$33.65
$40.38
$26.92
$20.19
3 1 yr delay, no TIF
$32.45
$38.94
$25.96
$19.47
4 2 yr delay, no TIF
$30.92
$37.11
$24.74
$18.55
5 4 yr delay, no TIF
$28.11
$33.73
$22.49
$17.03
6 300 only, no TIF
$16.10
$19.32
$12.88
$9.66
The numbers in row (1) represent the scenarios that might follow if the TIF is approved under Article 2
while the numbers in the other rows represent other possible outcomes. The numbers in row (2) are higher
Page 6 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
than the corresponding numbers in row (1). Thus we conclude, as one would expect, that if the TIF
agreement is not approved but Shire nonetheless proceeds with its full plan, the Town is better off than if
the TIF is approved. Similarly, three of four numbers in row (3) and two of four numbers in row (4) are
higher than their counterparts in row (1). On the other hand, the numbers in rows (5) and (6) are all lower
than the corresponding numbers in row (1).
It has been argued that a tax reduction of some $5M to $8M represents less than I% of the expenses that
Shire will likely incur in implementing its stated plans over the next 20 years if the project goes forward,
and therefore the magnitude of the TIF is rather unlikely to be a significant factor in Shire's determination
of the location of the manufacturing facility and additional lab /office space. If this is true, then Shire
might be expected to locate the facility in Lexington if the TIF agreement was less favorable to them and
possibly even if no agreement is approved by Town Meeting (though one should not forget that
approximately $5M in additional investment tax credits from the State will only be available to Shire if a
TIF agreement is approved).
If Shire's decision, in fact, does hinge upon Town Meeting's approval of the TIF but the TIF is not
approved, then one needs to compare the numbers in row (1) with those in rows (3) through (6). If another
tenant that wishes to fully develop the 200 and 400 Patriot Way parcels emerges in only one year (see row
(3)), the Town scores a win IF the forthcoming development is comparable in assessed value to the kind
of development envisioned by Shire. If the new tenant only develops office space, for instance, the
property's values will not yield as much revenue as a Shire -like development; this is illustrated by
comparing, e.g., the $30.79M in Scenario (I a) and the $19.47M in Scenario (3d). If the wait for a new
tenant is two years, it's a wash with a comparable tenant and a loss for a (similarly sized) office space use.
If the wait is longer than about two years, the net revenue will be less than under the current proposal.
The worst case among those we have considered is one where parcels 200 and 400 are never developed
(see row (6)). The results demonstrate a substantial loss for the town relative to that in row (1). It is
worth noting that these conclusions are independent of assumptions on future tax rates. Future tax rates
only affect the magnitude of the differences between scenarios, not which scenario will net the Town the
most revenue.
The TIF agreement before Town Meeting presents an opportunity for a significant increase in property
tax revenue. If the agreement is revised to be more favorable to the Town or if no agreement is reached,
and Shire, counter to statements made to date by its representatives, nonetheless proceeds to build
buildings at 200 and 400 Patriot Way, the Town would receive an increase in net revenue that could be as
much as 10% larger than that to be received under the Shire/TIF plan. However, if the TIF is not
approved and Shire does not develop the 200 and 400 parcels, then, it is highly uncertain as to how and
when these parcels will be developed. If this tikes many years, then the new revenue could be as low as
50% of that to be received under the full Shire /TIF plan. We cannot estimate the chances that Shire will
proceed with a development of the 200 and 400 parcels even if the present agreement is not approved, nor
can we estimate the prospects that other companies will want to build there in the next few years or
whether they'll build lab /manufacturing space (which is assessed at a higher value than office space); the
chances could be good if the commercial real estate market continues to tighten and remains tight for a
while, or they could be poor especially if the commercial real estate market weakens within the next
couple of years. It has been a long time since a new office /lab /manufacturing building of comparable size
has been built in Lexington.
In short, if the TIF agreement before Town Meeting is not approved we put much of the potential revenue
increase at risk in order to modestly increase that potential. We do not believe that the risk is worthwhile,
and therefore we unanimously recommend approval of the agreement as it currently stands.
Page 7 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
The Appropriation Committee unanimously supports this Article.
Article 3: Amend FY2007
Operating Budget
Funds
Requested
Funding
Source
Committee
Recommendation
See Text
GF
Approve (9 -0)
This Article seeks amendments to the FY2008 Operating Budget (Article 21) approved at the 2007
Annual Town Meeting. The amendments are necessary to account for (1) additional revenue which was
not anticipated at the time of Town Meeting or which, although known, was inadvertently not presented
to Town Meeting for appropriation and (2) additional unanticipated FY2008 expenses.
Revenue Adjustments
Overlay Surplus
Each year the Town's budget allocates a certain amount of funds to what are described as Revenue
Offsets, to meet anticipated expenditures of the Town. Included in these funds are sums for the Board
of Assessors Overlay Account, to be used to meet real estate tax abatements or exemptions which will
be granted with respect to that fiscal year.
The process involved in determining whether abatements or exemptions will be granted can extend
over a period of years, involving proceedings before the Board of Assessors and, sometimes, appeals
to the State Appellate Tax Board. Whenever an abatement or exemption is granted, the Overlay
Account for the involved fiscal years is appropriately charged.
At some point, the Board of Assessors may determine that the amount remaining in a particular fiscal
year's Overlay Account is more than sufficient to meet remaining potential obligations. When that
determination is made, the Board of Assessors acts to release the surplus funds to the Town. Those
funds are then available to the Town as revenue, and are part of the calculations used in setting the tax
rate for the fiscal year in which they are released.
Prior to the 2007 Annual Town Meeting, the Board of Assessors voted to release a combined surplus
totaling $100,000 from the FY2000, 2001 and 2002 Overlay Accounts. Although the funds have
actually been released to the Town, they must still be appropriated for FY2008 for purposes of tax
rate setting. They were inadvertently overlooked, and thus not appropriated, at the time of Town
Meeting, and adoption of this Article will correct that oversight.
State Aid
The amount of State Aid anticipated in the FY2008 Operating Budget presented to Town Meeting
was $8,994,407. It turns out, happily, that the total amount the Town will receive is $9,064,275, an
increase of $69,868. Adoption of this Article will result in the Operating Budget correctly reflecting
the total amount of State Aid.
Expense Adjustments
Town Clerk - Personal Services & Expenses
Subsequent to Town Meeting, Sen. Robert Havern announced his retirement from the State Senate.
His resignation will require the holding of two elections (primary and general), not anticipated at the
time of the Annual Town Meeting, to elect his successor. It is estimated that these elections will
Page 8 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
increase FY2008 expenses by $50,000. Adoption of this Article will appropriate that sum to line item
8500 (Town Clerk), split equally between Personal Services and Expenses.
Reserve Fund
The $50,000 appropriation to line item 8500 leaves $19,868 remaining from the increased amount of
State Aid. That amount is to be appropriated to line item 2310, the Reserve Fund, a contingency fund
available to respond to extraordinary and unforeseen expenditures. This appropriation will increase
the Reserve Fund, transfers from which are authorized by the Appropriation Committee, to $469,868.
The Appropriation Committee unanimously supports this Article.
Article 4: Amend FY2007
Enterprise Funds
Budgets
Funds
Requested
Funding
Source
Committee
Recommendation
See Text
EF
Approve (9 -0)
This article proposes several minor housekeeping adjustments to the appropriations made for the water
and sewer enterprise funds at the Annual Town Meeting last spring.
Adjustment to Reflect Final MWRA Charges
In January of each calendar year, the Massachusetts Water Resources Authority (MWRA) provides
its member towns with a preliminary estimate of their water and sewer assessments for the upcoming
fiscal year. The Town uses these preliminary assessment figures to establish the MWRA component
of the water and sewer enterprise fund appropriations at the annual town meeting. In June of each
year, the MWRA completes its budget process and issues final assessments to its member towns. The
final assessments are typically less than the preliminary estimates.
When water and sewer rate - setting takes place in the late summer or early fall, the Town's practice
has been to set rates in an amount projected to be sufficient to cover the actual, final MWRA
assessments, as well as the other direct and indirect costs of the water and sewer enterprises. In
effect, therefore, the Town raises in the rates and pays to the MWRA each year an amount that is
somewhat less than the amount originally appropriated at the annual town meeting.
The proposed adjustments will reduce the original appropriations made for the MWRA component of
the FY2008 water and sewer enterprise budgets at last spring's Annual Town Meeting to reflect the
actual, final assessments. The amounts appropriated at this year's annual town meeting for MWRA
water and sewer charges and the actual, final assessments for FY07 are as follows:
Adjustments for Debt Costs
Following this year's Annual Town Meeting, it was determined that modest additions would be
required to the amounts originally appropriated for the costs of debt service (interest and issuance
costs) for water and sewer enterprise fund capital projects, including the fund's share of the new
Public Works Facility. To cover those costs, adjustments to the original appropriations for debt costs
Page 9 of 18
Appropriated
Final Assessment
Change
Water
$4,435,739
$4,117,775
$(317,964)
Sewer
$6,197,216
$5,630,863
$(566,353)
Adjustments for Debt Costs
Following this year's Annual Town Meeting, it was determined that modest additions would be
required to the amounts originally appropriated for the costs of debt service (interest and issuance
costs) for water and sewer enterprise fund capital projects, including the fund's share of the new
Public Works Facility. To cover those costs, adjustments to the original appropriations for debt costs
Page 9 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
are proposed in the amounts set forth below. The revised debt service costs will be taken into account
when the FY08 water and sewer rates are set by the Board of Selectmen this fall.
Adjustments to Reserve Funds
Under the state statute governing enterprise funds, G.L. c. 44, § 53F1/2, accumulated surpluses
resulting from the operations of an enterprise fund, referred to as retuned earnings or the reserve
fund, may be used either "for capital expenditures of the enterprise, subject to appropriation, or to
reduce user charges."
For purposes of this fall's water and sewer rate - setting, the Town Manager has proposed to the Board
of Selectmen (acting in its capacity as Water and Sewer Commissioners) the use of $362,570 in water
enterprise retuned earnings to mitigate the FY08 water rates. The effect would be to lower the
projected reserves from the current amount of about $2.5 million to a little over $2 million. With this
draw on retained earnings (down from $500,000 applied last year), no increase in the water rates will
be required this year.
Last year, the Town Manager proposed, and the Board of Selectmen approved, the setting of sewer
rates somewhat higher than was projected to be necessary to meet costs in order to augment the sewer
enterprise fund retained earnings, which were then considered inadequate at about $450,000. This
year, due to favorable operating results and a significant non - recurring increase in cash resulting from
a lien program that increased collections, the retained earnings in the sewer fund increased by nearly
$1.7 million to a total of over $2 million, an amount now considered to be adequate. Accordingly, the
Town Manager has proposed to the Board of Selectmen that they neither add to, nor draw from,
reserves when setting the FY08 sewer rates. Even without a draw on retuned earnings, no increase in
the sewer rates will be required this year.
Data provided to the Board of Selectmen in connection with this year's rate - setting indicates that the
Town's ability to forecast water usage, and thereby to anticipate revenues and reserve levels, has
improved substantially. Following up on a recommendation of the Water and Sewer Rate Study
Committee, the town staff plans to develop a policy that defines the appropriate level of retuned
earnings to be maintained for emergency purposes for both funds. The policy would provide that any
amounts in excess of those levels be used to mitigate future rate increases or finance capital projects.
In order to reconcile the FY2008 enterprise fund appropriations for tax - rate - setting purposes, and to
promote transparency in the setting of the water and sewer enterprise fund budgets, the Special Town
Meeting will be asked to appropriate $362,570 from the water enterprise fund retuned earnings in order
to mitigate FY2008 water rates. The projected changes in water and sewer retained earnings (if the usage
and other assumptions employed to set the rates are home out) are as follows:
Orig. Approp.
Rev'd Approp.
Change
Water
$490,833
$504,246
$13,413
Sewer
$473,256
$482,424
$ 9,168
Adjustments to Reserve Funds
Under the state statute governing enterprise funds, G.L. c. 44, § 53F1/2, accumulated surpluses
resulting from the operations of an enterprise fund, referred to as retuned earnings or the reserve
fund, may be used either "for capital expenditures of the enterprise, subject to appropriation, or to
reduce user charges."
For purposes of this fall's water and sewer rate - setting, the Town Manager has proposed to the Board
of Selectmen (acting in its capacity as Water and Sewer Commissioners) the use of $362,570 in water
enterprise retuned earnings to mitigate the FY08 water rates. The effect would be to lower the
projected reserves from the current amount of about $2.5 million to a little over $2 million. With this
draw on retained earnings (down from $500,000 applied last year), no increase in the water rates will
be required this year.
Last year, the Town Manager proposed, and the Board of Selectmen approved, the setting of sewer
rates somewhat higher than was projected to be necessary to meet costs in order to augment the sewer
enterprise fund retained earnings, which were then considered inadequate at about $450,000. This
year, due to favorable operating results and a significant non - recurring increase in cash resulting from
a lien program that increased collections, the retained earnings in the sewer fund increased by nearly
$1.7 million to a total of over $2 million, an amount now considered to be adequate. Accordingly, the
Town Manager has proposed to the Board of Selectmen that they neither add to, nor draw from,
reserves when setting the FY08 sewer rates. Even without a draw on retuned earnings, no increase in
the sewer rates will be required this year.
Data provided to the Board of Selectmen in connection with this year's rate - setting indicates that the
Town's ability to forecast water usage, and thereby to anticipate revenues and reserve levels, has
improved substantially. Following up on a recommendation of the Water and Sewer Rate Study
Committee, the town staff plans to develop a policy that defines the appropriate level of retuned
earnings to be maintained for emergency purposes for both funds. The policy would provide that any
amounts in excess of those levels be used to mitigate future rate increases or finance capital projects.
In order to reconcile the FY2008 enterprise fund appropriations for tax - rate - setting purposes, and to
promote transparency in the setting of the water and sewer enterprise fund budgets, the Special Town
Meeting will be asked to appropriate $362,570 from the water enterprise fund retuned earnings in order
to mitigate FY2008 water rates. The projected changes in water and sewer retained earnings (if the usage
and other assumptions employed to set the rates are home out) are as follows:
The Committee unanimously supports this article.
Page 10 of 18
6/30/06
6 /30 /07(est.)
Change
Projected 6/30/08
Water
$2
$2
$(362
2 134 085
Sewer
447
$2
0
$2
Total
$2
$4
$(362
4 271 625
The Committee unanimously supports this article.
Page 10 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
Article 5: Municipal
Electric Utilities
Resolution
Funds
Requested
Funding
Source
Committee
Recommendation
None
n/a
Approve (9 -0)
In light of the escalating costs of energy, the potential for rate savings to both the Town and to its
residents from the establishment of a municipal electric company cannot be ignored. Existing laws, which
govern the transfer of the infrastructure of local power distribution, make the establishment of such a
company infeasible. We support this resolution which calls for the removal at the State level of the
barriers to the establishment of a local municipal electric company. If this enabling legislation should
pass, then the Town would have the opportunity to undertake the arduous task of arialyzing the cost and
benefits of the establishment of a "muni" for Lexington.
The Committee unanimously supports this article.
Page 11 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
Appendix A: Schedule for mitigation payments totaling $3.1 million
The table below shows the timing of the mitigation payments that we use to compute net present values.
The timing of the first three columns are more or less specified in the draft agreement, but the State /Shire
obligation is only specified in terms of a FY 2012 deadline.
Page 12 of 18
Shire to
Cary Library
(terms of
agreement)
Shire to
Town
(terms of
agreement)
Patriot
Partners
(terms of
agreement
State /Shire
obligation
Totals
FY09
$50,000
$30,000
$10,000
$600,000
$690,000
FY10
$0
$0
$10,000
$700,000
$710,000
FY11
$50,000
$30,000
$10,000
$700,000
$790,000
FY12
0
0
$10
$600
610 000
FY33
$50
$30
$10
0
90 000
FY14
$0
$0
$10,000
$0
$10,000
FY15
$50,000
$30,000
$10,000
$0
$90,000
FY16
$0
$0
$10,000
$0
$10,000
FY37
$50
$30
$10
0
$90
FY18
0
0
$10
0
$10
FY19
$0
$0
$0
$0
$0
FY20
$0
$0
$0
$0
$0
FY21
$0
$0
$0
$0
$0
FY22
0
0
0
0
0
FY23
0
0
0
0
0
FY24
0
0
0
0
0
FY25
$0
$0
$0
$0
$0
FY26
$0
$0
$0
$0
$0
FY27
0
0
0
0
0
FY28
0
0
0
0
0
TOTAL
254 000
$150,000
$100,000
$2,600,000
$3,100,000
NPV 4%
1246,748
'', $124,0491
$81,109
$2,359,292
$4771,199
NPV 5 0 /4
$197
$118,6511
$77
2 304 657
$2,698,277
Page 12 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
Appendix B: Demonstration of various revenue scenarios for parcels 200, 300, and
400
The following spreadsheets provide estimates of the revenues the Town will receive both from property taxes and
the $3.1 million in mitigation monies over the time period FY09 — FY2008 for parcels 200, 300, and 400 at
Lexington Technology Park. They also provide calculations of net present value (NPV) for FY09 using 4% and 5%
deflators, which are typical of recent trends in the State and Local Government Implicit Price Deflator.
The shaded columns on each page represent the 20 -year scenario that results from approval of the TIF agreement.
The first shaded column (with the double -lined border) mirrors the assumptions about future assessed values and
tax rates made by the Town in its analysis. The other three columns demonstrate the results if the Town's
assumptions about future tax revenues from the three parcels are varied by +/- 20% and by 40 %, that is, if one
assumes the Town has been too pessimistic ( +20 %) or too optimistic ( -20% and -40 %) in its assumptions. On each
page of this appendix, the TIF scenario appears alongside a different "no TIF" scenario. These alternative scenarios
can be described as follows:
• TIF is turned down, but Shire follows the presently projected build -out anyway.
• TIF is turned down; after a one -year delay another tenant comes without a TIF and executes a build -
out plan similar to Shire's full build -out plan.
• TIF is turned down; after a two -year delay another tenant comes without a TIF and executes a
similar build -out plan.
• TIF is turned down; after a four -year delay another tenant comes without a TIF and executes a
similar build -out plan.
• TIF is turned down; no other tenant comes forward to build out parcels 200 and 400 (the worst case
among these scenarios).
Note that in each of the scenarios, Shire's occupation and development of parcel 300 is assumed, since Shire has
indicated that its decision on this parcel has been made and is independent of the decision on the TIF.
In the scenarios where Town Meeting turns down the TIF and we have to wait for another tenant to come along for
parcels 200 and 400, the 20% and 40% discount columns can be used to evaluate the impact if that eventual tenant
builds something in a different commercial class with a lower valuation — i.e., office space instead of
lab /manufacturing space. Since office space valuations are expected to run 35 -40% lower than Shire's expected
commercial classification, the 40% discount column is a reasonable approximation of this difference.
Page 13 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
NOTES: (1) These figures include $280,599, which is the base year (FY09) tax for parcel 400. In the Town's analysis, this is subtracted from the totals since it falls
outside of the term of the TIF agreement for the 400 parcel. However, since our analysis simply attempts to demonstrate the total of tax revenue +
mitigation monies the town will receive under various scenarios in FY09 - FY28, we have included this number in our calculations.
(2) NPV = FY09 net present value
Page 14 of 18
Shire now without TIF, full build -out
Shire
now with
TIF, full build
-out
Estimated Shire
Estimated Shire
Estimated Shire
Estimated Shire
Estimated Shire:
Estimated Shire
Estimated Shire
Estimated Shire
taxes, Town
taxes, inflate
taxes, discount
taxes, discount
taxes, Town
taxes, inflate
taxes, discount
taxes, discount
projections,
projections
projections 20%
projections 40%
projections,
projections 20%
projections 20%
projections 40%
no TIF
20% no TIF
no TIF
no TIF
(net of TIF
net TIF
!( net TIF
net TIF
FY08 Base
$47S
$ 574 , 732
$3S3
$2S7
$
$ 574 732
$383
$ 287 , 366
FY09
$938,484
$1,126,180
$750,787
$563,090
$779,864
$935,837
$623,891
$467,918:
FY10
$1,253,567
$1,504,281
$1,002,854
$752,140
$818,569
$982,283
$654,855
$491,142
FY11
$2,024,078
$2,428,894
$1,619,263
$1,214,447
:$1,635,757
$1,962,908
$1,308,605
$981,454:
FY12
$2,592,935
$3,111,522
$2,074,348
$1,555,761
$1,676,645
$2,011,974
$1,341,316
$1,005,987:
FY13
$2,634,567
$3,161,481
$2,107,654
$1,580,740
:$1,832,2361
$2,198,683
$1,4615,789
$1,099,542:
FY14
$2,700,431
$3,240,518
$2,160,345
$1,620,259
;$1,969,419
$2!,363,302
$1,525,535
$1,181,651:
FY15
$2,767,942
$3,321,531
$2,214,354
$1,660,765
$2,018,654
$2;.422,385
'. $1,614,923
$1,211,192 i
FY16
$2,837,141
$3,404,569
$2,269,713
$1,702,284
$2,165,123
$2,59B,147
$1,732,09B
$1,299,074
FY17
$2,908,069
$3,489,683
$2,326,455
$1,744,842
;$2,317,654
$2!,7B1,184
$1,854,123
$1,390,592:
FY18
$2,980,771
$3,576,925
$2,384,617
$1,788,463
$2,476,458
$2;971,749
$1,981,166
$1,485,875:
FY19
$3,055,290
$3,666,348
$2,444,232
$1,833,174
$2,641,753
$3,170,104
$2,113,403
$1,5B5,052
FY20
$3,131,673
$3,758,007
$2,505,338
$1,879,004
:$2,813,766
$3,376,519
$2,251,013
$1,688,260:
FY21
$3,209,964
$3,851,957
$2,567,972
$1,925,979
.$2,992,728
$3,;591,274
$2,394,183
$1,795,637
FY22
$3,290,214
$3,948,256
$2,632,171
$1,974,128
:$3,067,546
$3,.681,056
$2,454,037
$1,840,528:
FY23
$3,372,469
$4,046,963
$2,697,975
$2,023,481
:$3,144,235
$3,773,082
'. $2,515,388
$1,886,541
FY24
$3,456,781
$4,148,137
$2,765,424
$2,074,068
;$3,246,235
$3,;895,482
$2,596,988
$1,947,741
FY25
$3,543,200
$4,251,840
$2,834,560
$2,125,920
'$3,399,327
$4,079,193
'. $2,719,462
$2,039,596
FY26
$3,631,780
$4,358,136
$2,905,424
$2,179,068
$3,484,310
$4,181,173
$2,787,448
$2,090,586 i
FY27
$3,722,575
$4,467,090
$2,978,060
$2,233,545
:$3,596,611
$4,315,933
$2,877,289
$2,157,967:
FY28
$3,815,639
$4,578,767
$3,052,511
$2,289,383
$3,686,526
$4,423,831
$2,949,221
$2,211,916:
Subtotal (1)
$57,867,571
$69,441,085
$46,294,057
$34,720,542
$49,763,417
$59,715,100
$39,810,733
',$29,858,450
NPV 4% (2)
$37,216,975
$44,660,370
$29,773,580
$22,330,185
$31,249,922
$37,499,907
$24,999,938
$18,749.9535
NPV 5% (2)
$33,650,064
$40,380,077
$26,920,052
$20,190,039
$28,088,204
$33,705,845
$22,470,563
$16,852,923 i
Mitigation $$
$0
$0
$0
$0
$3,100,004
$3,100,000
$3,100,000
$3,100,000 '.
NPV 4% (2)
$0
$0
$0
$0
;$2,771,199
$2,771,199
$2,771,199
$2,771,199:
NPV 5% (2)
$0
$0
$0
$0
$2,698,277
$2,698,277
$2,698,277
$2,698,277 i
Total FY09 -28
$57,867,571
$69,441,085
$46,294057
$34,720,542
52863417
$62 81,6 100
42 910 733
$32,958,050
NPV 4% 2 )
$37,216,975
$44,660,370
$29,773,580
$22,330,185
34 021 121
$40
i 27 771,137
$21,521,152
NPV 5% 2 )
$33,650,064
$40,380,077
$26,920,052
$20,190,039
30 786 481
$36
$25,168,841
i 19 555 200
NOTES: (1) These figures include $280,599, which is the base year (FY09) tax for parcel 400. In the Town's analysis, this is subtracted from the totals since it falls
outside of the term of the TIF agreement for the 400 parcel. However, since our analysis simply attempts to demonstrate the total of tax revenue +
mitigation monies the town will receive under various scenarios in FY09 - FY28, we have included this number in our calculations.
(2) NPV = FY09 net present value
Page 14 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
NOTES: (1) These figures include $280,599, which is the base year (FY09) tax for parcel 400. In the Town's analysis, this is subtracted from the totals since it falls
outside of the term of the TIF agreement for the 400 parcel. However, since our analysis simply attempts to demonstrate the total of tax revenue +
mitigation monies the town will receive under various scenarios in FY09 - FY28, we have included this number in our calculations.
(2) NPV = FY09 net present value
Page 15 of 18
Wait 1 yr for another tenant, no TIF
Shire
now with
TIF, full build
-put
Estimated
Estimated
Estimated taxes,
Estimated taxes,
Estimated Shire'.
Estimated Shire
'.Estimated Shire
Estimated Shire
taxes, Town
taxes, inflate
discount
discount
taxes, Town
taxes, inflate
':taxes, discount
taxes, discount
projections,
projections
projections 20%
projections 40%
projections,
projections 20%
;projections: 20%
projections 40%
no TIF
20% no TIF
no TIF
no TIF
net of TIF
net TIF)
net TIF
net TIF
FY08 Base
$47S
$ 574 , 732
$3S3
$2S7
$ 478 , 942
$574
$383
$2S7
FY09
$938,484
$1,126,180
$750,787
$563,090
$779,864
$935,837
$623,891
$467,918:
FY10
$1,086,599
$1,303,919
$869,279
$651,960
$818,569
$982,283
$654,855
$491,1421
FY11
$1,284,906
$1,541,888
$1,027,925
$770,944
$1,635,757
$1,962,908
$1,308,605
$981,454:
FY12
$2,074,680
$2,489,616
$1,659,744
$1,244,808
;$1,676,645
$2,,011,974
$1,341,316
$1,005,9B7:
FY13
$2,657,759
$3,189,310
$2,126,207
$1,594,655
$1,832,238
$2;.198,683
'. $1,465,789
$1,099,342:
FY14
$2,700,431
$3,240,518
$2,160,345
$1,620,259
$1,9697419
$21,363,302
$1,575,535
$1,1B1.651
FY15
$2,767,942
$3,321,531
$2,214,354
$1,660,765
:$2,018,654
$2.,422,385
$1,614,923
$1,211,192:
FY16
$2,837,141
$3,404,569
$2,269,713
$1,702,284
$2,165,123
$2!,598,147
$1,732,098
$1,299,074<
FY17
$2,908,069
$3,489,683
$2,326,455
$1,744,842
$2,317,654
$2,;781,184
$1,854,123
$1,390,592
FY18
$2,980,771
$3,576,925
$2,384,617
$1,788,463
:$2,476,458
$2!,971,749
$1,981,166
$1,485,875:
FY19
$3,055,290
$3,666,348
$2,444,232
$1,833,174
;$2,641,753
$3,170,104
$2,113,403
$1,585,052
FY20
$3,131,673
$3,758,007
$2,505,338
$1,879,004
'$2,813,766
$3,376,519
'. $2,251,013
$1,688,760:
FY21
$3,209,964
$3,851,957
$2,567,972
$1,925,979
$2,992,728
$3,591,274
$2,394,183
$1,795,1137 i
FY22
$3,290,214
$3,948,256
$2,632,171
$1,974,128
:$3,067,5461
$3,681,056
$2,454,037
$1,840,228:
FY23
$3,372,469
$4,046,963
$2,697,975
$2,023,481
:$3,144,235
$3,773,082
$2,515,388
$1,886,541:
FY24
$3,456,781
$4,148,137
$2,765,424
$2,074,068
$3,246,235
$3,;895,482
$2,596,98B
$1,947,741
FY25
$3,543,200
$4,251,840
$2,834,560
$2,125,920
:$3,399,327
$4,079,193
$2,719,462
$2,039,596
FY26
$3,631,780
$4,358,136
$2,905,424
$2,179,068
;$3,484,310
$4,1B1,173
$2,787,448
$2,090,586:
FY27
$3,722,575
$4,467,090
$2,978,060
$2,233,545
$3,596,611
$4,315,933
$2,877,289
$2,157,9671
FY28
$3,815,639
$4,578,767
$3,052,511
$2,289,383
$3,686,526
$4,423,831
$2,949,221
$2,211,516:
Subtotal (1)
$56,466,367
$67,759,641
$45,173,094
$33,879,820
$49,763,417
$59,715,100
$39,810,733
',$29,858,450
NPV 4% (2)
$35,981,537
$43,177,845
$28,785,230
$21,588,922
$31,249,923
$37,499,907
$24,999,938
$18,749.953 i
NPV 5% (2)
$32,451,896
$38,942,276
$25,961,517
$19,471,138
$28,088,204
$33,705,845
$22,470,563
$16,852,923 i
Mitigation $$
$0
$0
$0
$0
$3,100,000
$3,100,000
$3,100,000
$3,100,000
NPV 4% (2)
$0
$0
$0
$0
$2,771,199
$2,771,199
$2,771,199
$2,771,199 4
NPV 5% (2)
$0
$0
$0
$0
. '$2,698,277
$2,698,277
'. $2,698,277
'. $2,698,277:
Total FY09 -211
$56,466,367
$67,759,641
$45,173094
$33,879,820
$52,863,417
$42,910,733
$32,958,050
NPV 4% 2
$35,981,537
$43,177,845
$28,785,230
$21,588,922
$34.021,121
271 106
i 27 771 137
i 21 521 152
NPV 5% 2
32 451 896
38 942 276
25 961 517
19 471 138
30 786 481
404 122
$25J68
i 19 551 200 3
NOTES: (1) These figures include $280,599, which is the base year (FY09) tax for parcel 400. In the Town's analysis, this is subtracted from the totals since it falls
outside of the term of the TIF agreement for the 400 parcel. However, since our analysis simply attempts to demonstrate the total of tax revenue +
mitigation monies the town will receive under various scenarios in FY09 - FY28, we have included this number in our calculations.
(2) NPV = FY09 net present value
Page 15 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
NOTES: (1) These figures include $280,599, which is the base year (FY09) tax for parcel 400. In the Town's analysis, this is subtracted from the totals since it falls
outside of the term of the TIF agreement for the 400 parcel. However, since our analysis simply attempts to demonstrate the total of tax revenue +
mitigation monies the town will receive under various scenarios in FY09 - FY28, we have included this number in our calculations.
(2) NPV = FY09 net present value
Page 16 of 18
Wait 2 yrs for another tenant, no TIF
Shire
now with
TIF, full build
-out
Estimated
Estimated
Estimated taxes,
Estimated taxes,
Estimated Shire'.
Estimated Shire
Estimated Shire
Estimated Shire
taxes, Town
taxes, inflate
discount
discount
taxes, Town
taxes, inflate
taxes, discount
taxes, discount:
projections,
projections
projections 20%
projections 40%
projections,
projections
projections 20%
projections 40%
no TIF
20% no TIF
no TIF
no TIF
(net of TIF
20% net TIF
net TIF`
net TIF)
FY08 Base
$47S
$ 574 , 732
$3S3
$2S7
$ 476,943 '.
574 732
$ 363,154
$287
FY09
$938,484
$1,126,180
$750,787
$563,090
$779,864'
$935,837
$623 „891
$467;918
FY10
$1,086,599
$1,303,919
$869,279
$651,960
$818,569'.
$982,283
$654,855
$491,142
FY11
$1,113,764
$1,336,517
$891,011
$668,259
$1,635,757'.
$1,962,908
$1,308'.,605
$981,454
FY12
$1,312,855
$1,575,426
$1,050,284
$787,713
$1,676,645'.
$2,011,974
$1,341,316
$1,005;987
FY13
$2,103,789
$2,524,547
$1,683,031
$1,262,274
.$1,832,236'.
$2, €98,683
$1,465,789
$1,099;342
FY14
$2,687,920
$3,225,503
$2,150,336
$1,612,752
$1,969,419'.
$2,063,302
$1,575,535
$1,181,651
FY15
$2,731,332
$3,277,598
$2,185,065
$1,638,799
$2,018,654'.
$2,422,385
$1,614,923
$1,211,192
FY16
$2,799,615
$3,359,538
$2,239,692
$1,679,769
$2,165,123'.
$2,598,147
$1,732,098
$1,299;074
FY17
$2,869,605
$3,443,527
$2,295,684
$1,721,763
$2,317,654'.
$2,781,184
$1,854,123
$1,390,592
FY18
$2,941,346
$3,529,615
$2,353,076
$1,764,807
$2,476,458'.
$2,571,749
$1,981'.,166
$1,485,875
FY19
$3,014,879
$3,617,855
$2,411,903
$1,808,928
$2,641,753'.
$3,170,104
$2,113,403
$1,585;052
FY20
$3,090,251
$3,708,301
$2,472,201
$1,854,151
$2,813,766'.
$3,476,519
$2,251,013
$1,688;260
FY21
$3,167,507
$3,801,009
$2,534,006
$1,900,504
$2,992,728'.
$3,591,274
$2,394,183
$1,795,637
FY22
$3,246,695
$3,896,034
$2,597,356
$1,948,017
$3,067,546'.
$3,581,056
$2,454,037
$1,840,528
FY23
$3,327,863
$3,993,435
$2,662,290
$1,996,718
$3,144,235'.
$3,773,082
$2,515,388
$1,886;541
FY24
$3,411,059
$4,093,271
$2,728,847
$2,046,635
$3,246,235'.
$3,095,482
$2,595,988
$1,947,741
FY25
$3,496,336
$4,195,603
$2,797,068
$2,097,801
$3,399,327'.
$4,079,193
$2,719 „462
$2,039,596
FY26
$3,583,744
$4,300,493
$2,866,995
$2,150,246
$3,484,310'.
$4,181,173
$2,787,448
$2,090;586
FY27
$3,673,338
$4,408,005
$2,938,670
$2,204,003
.$3,596,611'.
$4,415,933
$2,877,289
$2,157;967
FY28
$3,765,171
$4,518,205
$3,012,137
$2,259,103
$3,686,526'.
$4,423,831
$2,949'.,221
$2,211,916
Subtotal (1)
$54,362,152
$65,234,582
$43,489,721
$32,617,291
$49,763,417:
$59,716,100
$39,810;.733
', $29,858,050 '.
NPV 4% (2)
$34,357,966
$41,229,560
$27,486,373
$20,614,780
$31,249,922'.
$37,499,907
$24,999,938
$18,749,953
NPV 5% (2)
$30,920,998
$37,105,198
$24,736,798
$18,552,599
$28,088,204'.
$33,705,845
$22,4701,563
$16,852,923
Mitigation $$
$O
$O
$O
$O
$3,100,000'.
$3,100,000
$3,100,000
$3,100,000
NPV 4% (2)
$0
$0
$0
$0
$2,771,199'.
$2,771,199
$2,771,199
$2,771;199 '.
NPV 5% (2)
$0
$0
$0
$0
$2,698,277'.
$2,698,277
$2,698,,277
$2,698,.277
Total FY09 -28
$54,362,152
$65,234,582
$43,489721
$32,617,291
$52,863,417 .:
$62,816,100
$42,910 '
$32,958
NPV 4% 2
$34,357,966
$41,229,560
$27,486,373
$20,614,780
$34,021 121 ;
40 271 106
$27,771,137
$21,521,152
NPV 5% 2 )
$30,920,998
$37,105,198
$24,736,798
18 552 599
30 786 481;
36 404 122
$25,168,841
$1%551,200 :
NOTES: (1) These figures include $280,599, which is the base year (FY09) tax for parcel 400. In the Town's analysis, this is subtracted from the totals since it falls
outside of the term of the TIF agreement for the 400 parcel. However, since our analysis simply attempts to demonstrate the total of tax revenue +
mitigation monies the town will receive under various scenarios in FY09 - FY28, we have included this number in our calculations.
(2) NPV = FY09 net present value
Page 16 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
NOTES: (1) These figures include $280,599, which is the base year (FY09) tax for parcel 400. In the Town's analysis, this is subtracted from the totals since it falls
outside of the term of the TIF agreement for the 400 parcel. However, since our analysis simply attempts to demonstrate the total of tax revenue +
mitigation monies the town will receive under various scenarios in FY09 - FY28, we have included this number in our calculations.
(2) NPV = FY09 net present value
Page 17 of 18
Wait 4 yrs for another tenant, no TIF
Shire
now with
TIF,
full build-out
Estimated
Estimated
Estimated taxes,
Estimated taxes,
Estimated Shire'.
Estimated Shire
Estimated Shire
Estimated Shire
taxes, Town
taxes, inflate
discount
discount
taxes, Town
taxes, inflate
taxes, discount
taxes, discount
projections,
projections
projections 20%
projections 40%
projections,
projections
projections 20%
projections 40%
no TIF
20% no TIF
no TIF
no TIF
(net TIF
20% (net TIF)
(net TIF
net TIFF
FY08 Base
$47S
574 732
$ 3S3 , 154
$2S7
$478,943
$ 574,732
383154
287.366
FY09
$938,484
$1,126,180
$750,787
$563,090
$779,864
$935,837
$623,891
$467,918 :
FY10
$1,086,599
$1,303,919
$869,279
$651,960
$818,565
$982,283
$654,855
$491,142
FY11
$1,113,764
$1,336,517
$891,011
$668,259
$1,635,757
$1,962,908
$1,308,605
$981,454
FY12
$1,141,608
$1,369,930
$913,287
$684,965
:$1,676,645
$2,011,974
$1,341,316
$1,005,987
FY13
$1,170,149
$1,404,178
$936,119
$716,166
$1,832,236
$2,198,683
$1,465,789
$1,099,342
FY14
$1,370,651
$1,644,782
$1,096,521
$838,690
$1,969,419
$2,363,302
$1,575,535
$1,181;651
FY15
$2,163,043
$2,595,651
$1,730,434
$1,314,532
$2,018,654
$2,422,385
$1,614,923
$1,211;192
FY16
$2,748,663
$3,298,395
$2,198,930
$1,666,322
:$2,165,123
$2,598,147
$1,732,098
$1,299,074
FY17
$2,793,593
$3,352,312
$2,234,874
$1,693,708
;$2,317,654
$2,781,184
$1,854,123
$1,390;592
FY18
$2,863,433
$3,436,119
$2,290,746
$1,736,051
$2,476,458
$2,971,749
$1,981,166
$1,485;875
FY19
$2,935,019
$3,522,022
$2,348,015
$1,779,452
:$2,641,753
$3,170,104
$2,113,403
$1,585,052
FY20
$3,008,394
$3,610,073
$2,406,715
$1,823,938
$2,813,766
$3,376,519
$2,251,013
$1,688,260
FY21
$3,083,604
$3,700,325
$2,466,883
$1,869,537
:$2,992,724
$3,591,274
$2,394,183
$1,795;637
FY22
$3,160,694
$3,792,833
$2,528,555
$1,916,275
$3,067,545
$3,681,056
$2,454,037
$1,840;528 '.
FY23
$3,239,711
$3,887,654
$2,591,769
$1,964,182
:$3,144,235
$3,773,082
$2,515,388
$1,886,541
FY24
$3,320,704
$3,984,845
$2,656,563
$2,013,287
'$3,246,235
$3,895,482
$2,5901,988
$1,947;741 '.
FY25
$3,403,722
$4,084,466
$2,722,977
$2,063,619
$3,399,327
$4,079,193
$2,719,462
$2,039;596
FY26
$3,488,815
$4,186,578
$2,791,052
$2,115,209
:$3,484,310
$4,181,173
$2,787,448
$2,090,586
FY27
$3,576,035
$4,291,242
$2,860,828
$2,168,089
;$3,596,611
$4,315,933
$2,877,289
$2,157;967
FY28
$3,665,436
$4,398,523
$2,932,349
$2,222,292
$3,686,526
$4,423,831
$2,949,221
$2,211,916
Subtotal (1)
$50,272,120
$60,326,544
$40,217,696
$30,469,622
$49,763,417
$59,716,100
$39,810,733
$29,858,050
NPV 4% (2)
$31,341,667
$37,610,000
$25,073,333
$18,991,451
$131,249,922
$37,499,907
$24,999,938
$18,749,953
NPV 5% (2)
$28,110,478
$33,732,574
$22,488,382
$17,032,273
$',28,088,204
$33,705,845
$22,476,563
$16,852,923
Mitigation $$
$0
$0
$0
$0
$3,100,000
$3,100,000
$3,100,000
$3,100,000
NPV 4% (2)
$0
$0
$0
$0
:$2,771,194
$2,771,199
$2,771,199
$2,771,199
NPV 5% (2)
$0
$0
$0
$0
.$2,698,277
$2,698,277
$2,698,277
$2,698,.277 '.
Total FY09 -28
$50,272,120
$60,326,544
$40,217696
$30,469,622
$52,863,417
`16 100
42 910 733
32 958 050
NPV 4% 2
31 341 667
37 610 000
25 073 333
18 991 451
34 021 121
71 106
[ R62,
27 771 137
21 52Y 152
NPV 5% 2
28 110 478
33 732 574
22 488 382
17 032 273
30 786 481
04 122
$25,168,841
$1%551
NOTES: (1) These figures include $280,599, which is the base year (FY09) tax for parcel 400. In the Town's analysis, this is subtracted from the totals since it falls
outside of the term of the TIF agreement for the 400 parcel. However, since our analysis simply attempts to demonstrate the total of tax revenue +
mitigation monies the town will receive under various scenarios in FY09 - FY28, we have included this number in our calculations.
(2) NPV = FY09 net present value
Page 17 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
NOTES: (1) These figures include $280,599, which is the base year (FY09) tax for parcel 400. In the Town's analysis, this is subtracted from the totals since it falls
outside of the term of the TIF agreement for the 400 parcel. However, since our analysis simply attempts to demonstrate the total of tax revenue +
mitigation monies the town will receive under various scenarios in FY09 - FY28, we have included this number in our calculations.
(2) NPV = FY09 net present value
Page 18 of 18
Shire in 300, no other tenant, no TIF
Shire
now with
TIF, full build
-out
Estimated Shire
Estimated Shire
Estimated Shire
Estimated Shire
Estimated Shire
Estimated Shire
Estimated Shire
Estimated Shire
taxes, Town
taxes, inflate
taxes, discount
taxes, discount
taxers, Town
taxes, inflate
taxes, discount
taxes, discount
projections,
projections
projections 20%
projections 40%
projections,
projections
projections 20%
projections 40%
no TIF
20% no TIF
no TIF
no TIF
(net of TIF
20% (net TIF)
;net TIF'
net TIF'
FY08 Base
$47S
$ 574 , 732
$3S3
$2S7 , 366
$478
$574
3$3154
$287 , 366
FY09
$938,484
$1,126,180
$750,787
$563,090
$779,864
$935,837
$623,891
$467,,918
FY10
$1,086,599
$1,303,919
$869,279
$651,960
'.. $818,569
$982,283
$654,855
$491,142
FY11
$1,113,764
$1,336,517
$891,011
$668,259
$1,635,757
$1,962,908
$1,308,605
$981,454
FY12
$1,141,608
$1,369,930
$913,287
$684,965
:$1,676,645
$2,011,974
$1,341,316
$1,005,987
FY13
$1,170,149
$1,404,178
$936,119
$702,089
.$1,832,236
$2,198,683
$1,465,789
$1,0991,342
FY14
$1,199,402
$1,439,283
$959,522
$719,641
$1,969,419
$2,363,302
$1,575,535
$1,181,651
FY15
$1,229,387
$1,475,265
$983,510
$737,632
$2,018,654
$2,422,385
$1,614,923
$1,211,192
FY16
$1,260,122
$1,512,146
$1,008,098
$756,073
:$2,165,123
$2,598,147
$1,732,098
$1,299„074
FY17
$1,291,625
$1,549,950
$1,033,300
$774,975
$2,317,654
$2,781,184
$1,854,123
$1,390,592
FY18
$1,323,916
$1,588,699
$1,059,133
$794,349
$2,476,458
$2,971,749
$1,981,166
$1,485,875
FY19
$1,357,014
$1,628,416
$1,085,611
$814,208
$2,641,753
$3,170,104
$2,113,403
$1,585,052
FY20
$1,390,939
$1,669,127
$1,112,751
$834,563
$2,813,766
$3,376,519
$2,251,013
$1,688,260
FY21
$1,425,712
$1,710,855
$1,140,570
$855,427
:$2,992,728
$3,591,274
$2,394,183
$1,795,637
FY22
$1,461,355
$1,753,626
$1,169,084
$876,813
.$3,067,546
$3,681,056
$2,454,037
$1,840,528
FY23
$1,497,889
$1,797,467
$1,198,311
$898,733
:$3,144,235
$3,773,082
$2,515,388
$1,886!,,541
FY24
$1,535,336
$1,842,404
$1,228,269
$921,202
$3,246,235
$3,895,482
$2,595,988
$1,947 „741
FY25
$1,573,720
$1,888,464
$1,258,976
$944,232
:$3,399,327
$4,079,193
$2,719,462
$2,039,596'..
FY26
$1,613,063
$1,935,675
$1,290,450
$967,838
;$3,484,310
$4,181,173
$2,787,448
$2,090 „586
FY27
$1,653,389
$1,984,067
$1,322,711
$992,034
$3,596,611
$4,315,933
$2,877,289
$2,157,967
FY28
$1,694,724
$2,033,669
$1,355,779
$1,016,834
:$3,686,526
$4,423,831
$2,949,221
$2,211,916
Subtotal (1)
$26,958,197
$32,349,836
$21,566,558
$16,174,918
$49,763,417
$59,716,100
$39,810,733
$29,858,050
NPV 4% (2)
$17,703,776
$21,244,531
$14,163,020
$10,622,265
$,31,249,922
$37,499,907
$24,999,938
$18,749, „953
NPV 5% (2)
$16,100,381
$19,320,458
$12,880,305
$9,660,229
$,28,088,204
$33,705,845
$22,470,563
$16,852,923
Mitigation $$
$0
$0
$0
$0
$3,100,000
$3,160,000
$3,100,000
$3,100;000
NPV 4% (2)
$0
$0
$0
$0
.$2,771,194
$2,771,199
$2,771,199
$2,771,199
NPV 5% (2)
$0
$0
$0
$0
.$2,698,277
$2,698,277
$2,698,277
$2,698'.,277
Total FY 09 -28
$26,958,197
$32,349,836
$21,566558
$16,174,918
$52,863,417
:••.16 100
$42,910,733
$32,958
NPV 4% 2
17 703 776
21 244 531
14 163 020
10 622 265
34 021 121
40271,106
R�
$27,771,137 '.
$21,521,152
NPV 5% 2
$16,100,381
$19,320,458
$12,880,305
9 660 229
30 786 481
$25,168,841
19 551 "200 i
NOTES: (1) These figures include $280,599, which is the base year (FY09) tax for parcel 400. In the Town's analysis, this is subtracted from the totals since it falls
outside of the term of the TIF agreement for the 400 parcel. However, since our analysis simply attempts to demonstrate the total of tax revenue +
mitigation monies the town will receive under various scenarios in FY09 - FY28, we have included this number in our calculations.
(2) NPV = FY09 net present value
Page 18 of 18
APPROPRIATION COMMITTEE REPORT, OCTOBER 9, 2007 TO STM
Page 19 of 18