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10/15/2019 03:15 PMWith several anticipated town and schools projects on the horizon and a library project underway, the town got its first firm look on Oct. 7 at the long-term financial impact if the town proceeds with a $14 million community center and $84 million schools consolidation; the impact of a proposed $98 million schools maintenance plan is not part of this latest report.
Finance Director Stacy Nobitz presented Madison’s 2020-’21 Capital Improvement Program (CIP) budget and expenditure plan to the Board of Selectmen (BOS), specifically detailing the financial effects and projections related to the $14 million Academy School project and the $84 million four-school model project recommended by the Board of Education (BOE) earlier this year.
The school project was approved by the BOE after much debate over how to address the future of Madison’s aging schools. It includes approximately $58 million to build a new elementary school on Green Hill Road, with $20 million for renovations to Polson Middle School, and a little under $7 million to convert Brown Intermediate to a K-5 school.
The Academy School project has enjoyed broad support from the public. Though there are opportunities to offset some of its $14 million cost with grant money, the town doesn’t include any offset in its projections, as there is no guarantee of receiving those grants.
Nobitz said at the Oct. 7 meeting where she presented the data that the BOE has emphasized that even if the four-school model is not approved by voters, there still exists a badly needed $98 million 10-year maintenance plan to address various issues in the district.
This four-school model was one of the cheaper alternative options considered by the BOE, Nobitz told The Source.
The analysis provided by Nobitz showed a significant increase to the town’s annual debt service—the amount Madison must pay back each year on money it has borrowed—as well as increases in taxes, if the town were to approve these two items in a May referendum.
Madison’s CIP debt service would approximately double between 2021 and 2025, from a $3.7 million to $7.7 million if the town approves both projects, according to documents provided by Nobitz.
These projections are based off an assumed 1.75 percent annual increase in the rest of the town’s budget, including all other added debt, operational costs, or salary and health insurance increases, Nobitz said. Nobitz told the BOS at the meeting that number will likely be higher, probably closer to two percent.
The town would also add a corresponding increase in property taxes due to this new debt. Paying for the school project alone, without accounting for any other budget increases or expenses, would result in an average annual increase of $560 over the next 27 years, on a property assessed at $400,000.
Though Nobitz said she has done as much as she can to “smooth” the increases out and prevent large jumps from year to year, some periods would see higher increases than others, with a maximum single-year bump of $871 in 2029-’30.
Separate projections by project management company Colliers International, which designed the $14 million community center project for Academy School, estimated a $90 increase annually for a $400,000 assessment over 20 years, if that project is approved.
There is no simple way to avoid these financial realities, Nobitz told The Source, other than adding more tax-paying properties or cutting operating expenses.
Board Discussion
Members of the BOS offered different reactions to Nobitz’ projections. Selectman Bruce Wilson (R) expressed concern that the town would be pushing against its debt ceiling, which he said could make it difficult to respond to an unanticipated emergency like a hurricane or other weather disaster.
Wilson added that he had “every faith” the BOE had come up with an effective, well-thought out plan, but that the BOS still had to think ahead and make there was a comprehensive plan for future capital projects, including but not limited to the ones currently under consideration.
First Selectman Tom Banisch (R) said he hoped to sit down and have a conversation before the project moves forward. The CIP Committee, which is made up of members of the BOS, BOE, and the Board of Finance, will have to vote to send the project to the BOS for further review.
“Couple things on my mind—these numbers scare me a lot,” Banisch said. “You’re looking at a percentage increase that [is] significant relative to where we are.”
Banisch said that the town’s AAA credit rating could be in danger if Madison increased its debt too much. He also said he wanted to make sure the numbers were publicly available to help inform voters.
“From my perspective, I thought it was important to put these numbers out there for people to see and understand what the schools are asking for. I think it’s important for people in town to have the opportunity to make a decision about [the project],” Banisch said.
Selectman Scott Murphy (D) pushed back against the idea of focusing purely on the numbers, and said the BOS should first sit down and listen to the actual specifics of what the school plan would offer “in fairness and deference to all the hard work that’s been done already on the [BOE].” He also pointed out the town would have to spend money regardless, either on the new model or the maintenance plan.
“The BOS [has] not received an overview presentation of...the four-school model, so it’s premature to react in absence of details and conversation,” he said, adding that he hoped Banisch would provide an alternative solution if he thought the $84 million plan was not viable.
Banisch, Murphy, and Wilson are seeking re-election this November.