Low Interest Rates Have Braintree Investing Aggressively in Infrastructure

Braintree is preparing to take out $8.5 million in loans to pay for road resurfacing, school security, the East Braintree Fire Station project and more, taking advantage of favorable interest rates and potential revenue from a proposed meals tax.

"We are being more aggressive in our capital expenditures than we would be otherwise because of the rates," Chief of Staff and Operations Peter Morin told the Committee on Ways & Means as it examined Mayor Joseph Sullivan's capital spending proposal Tuesday night as part of its ongoing budget review.

The Town Council will likely vote on the entire budget at the end of May.

Responding to earlier concerns raised by Committee Chair Paul "Dan" Clifford, Morin also said that the mayor's office will work following the current budget process to develop a longer-term capital spending plan.

During a meeting last month, committee members voted to request that the capital planning process, which involves taking out millions of dollars in bonds each year to pay for roads, vehicles and other tangible assets, be more detailed, wider-ranging and meet the requirements of the Town Charter.

Morin said that he accepted the committee chair's comments as constructive criticism and that the mayor hopes to provide a more developed plan, possibly a three-year document in the near future.

"Really?" Clifford said.

"Well, that wasn't my first reaction," Morin said, laughing.

"Sometimes we scratch our heads and say, 'Where's the big picture,'" Clifford said.

The plan presented Tuesday night – officially the fiscal year 2013 capital plan, even though the committee was reviewing the fiscal year 2014 budget – includes a wide range of spending, including $1.7 million for the ongoing 100 Roads Program, $700,000 for school improvements, $279,000 for school security, $300,000 for resurfacing the East Middle School parking lot, $268,000 for fire building upgrades and $140,000 for the police station.

State lawmakers voted in an expanded Chapter 90 transportation spending plan this year, providing Braintree with nearly $1.5 million, up half a million dollars over last year.

Morin said the mayor will likely return to the council with more road projects based on the higher state number, which came in after the town's budget was developed.

Last year, also taking advantage of low interest rates and an increased bond rating, the town took out $11.75 million in capital loans. The lower amount this year does not reflect a less favorable market, Morin said, but rather how much the town can realistically accomplish within spending deadlines.

The town must use the money it borrows on its capital projects within two years or it faces penalties from the IRS, Town Auditor Eric Kinsherf said.

Later this month Ways & Means will also take up a proposed meals tax that could generate as much as $900,000 for the town annually, according to the state Department of Revenue. Sullivan budgeted $700,000 for the upcoming fiscal year from the tax and targeted it to capital spending.

Committee members voted unanimously Tuesday night to favorably recommend the spending measure to the full council.

Other capital spending items include $265,000 for two dump trucks and a plow for the DPW grounds and highway departments, $100,000 for library repairs, $172,000 for three police SUVs, and $3.5 million for water distribution improvements that Morin said will be coordinated with 100 Roads Program work.