Finance Committee Backs Proposed Public Safety/Public Works Complex

Editor’s Note: The following was submitted by Financial Committee Chairman Steve Schoonveld is support of funding a new public safety/public works complex. Letters can be submitted by email to Dan.Libon@patch.com

Right Project, Right Time, Right Choice

The Town of Mansfield has an important financial choice to make during the Special Election on September 15th. The choice is to address or to not address our outstanding infrastructure needs. The choice is to finance our needs when the time is economically right with low-interest rates, competitive construction pricing and when the Town is in a strong financial position, or, to delay and risk incurring additional taxpayer expense of increased construction costs and interest rates .

The choice is to provide our Fire, Police, and Public Works teams with resources to effectively fulfill their responsibilities to every resident of the town.

The Fire Station (80 years old), the DPW Garage (60 years old) and the Police Station (renovation of an old building performed 20 years ago) have all outlived their usefulness and functionality. This is clear and cannot be disputed. A simple visit of the buildings is sufficient to understand the significant need.

The financial considerations are outlined below, and from a fiscal and financial perspective, we believe that now is the time to make this investment. The Finance Committee, the Board of Selectmen and the School Committee all support this project unanimously. As Chair and Vice-Chair of the Finance Committee, we support a yes vote on September 15th for the following 3 reasons:

1. The cost effectiveness of building all 3 buildings together and the advantage of lower borrowing costs make now the right time to fund this project.

The proposal is to build all 3 facilities for a combined $34.9 million dollars. This estimate includes contingencies and escalation costs and an equipped complex that meets modern codes and specifications. The per-square-foot cost of the estimate is in line with recent projects in similar communities. The town has a history of coming in under on similar projects and the work will be closely monitored. The total cost without contingencies is at $31.5 million dollars.

The current interest rate environment is extremely favorable for towns with our credit rating. Recently the Town achieved a credit rating from S&P of an AA+ with a stable outlook. This was achieved for many reasons including our focus on achieving financial discipline within our budgets and adhering to financial objectives. The high credit rating gives the Town an opportunity to borrow at lower costs than other communities. In the near future interest rates are expected to rise, and we have factored in a 0.50% point increase in interest rates versus today’s rate.

Building these facilities separately and a delay of just 5 years in replacing either of these facilities will cost taxpayers 50% more in total costs over the duration of the projects due to the increase in interest rates, the increase in construction costs and the interim cost to upgrade and maintain the structures as building is delayed. In fact, the cost in today’s dollars to separately build the three buildings was a minimum of $8 million more.

It is for these reasons that this is economically the right project at the right time.

2. The Town’s existing debt capacity and the timing of additional infrastructure needs.

Debt exclusions from the school repairs and improvements of about twenty years ago are completely coming off of our tax rolls in 2017. In 2011, an average home assessed at $300,000 paid an annual debt exclusion of $246. That has declined to $45 in 2015 and will be $0 after 2017. This project is expected to bring the debt exclusion tax level for that average home to $180 per year. This is assuming that the full $34.9 million will be necessary to complete the project. If the project is completed without the need for the budgeted contingency funds the average home would have a debt exclusion tax level of $163.

The use of debt exclusions to address significant infrastructure needs is considered a best practice by towns and communities which rating agencies deem to be financially well run. Towns that do not appropriately manage their infrastructure needs and delay much-needed repairs are susceptible to tax overrides and/or cuts in services as they struggle to provide for the needs of the community. This impacts housing values, this impacts tax rates, this impacts services to the community and the community itself.

A study initiated this past Spring by the Finance and School Committees has provided a view of remaining infrastructure needs that the Town faces. This study was similar to the review of the municipal building and road infrastructure needs. The findings from the study show that there are indeed school infrastructure projects to be addressed in the coming 10 to 15 years. The total cost of the projects is $17.5 million based on today’s costs and is split between required ($12.5 million) and recommended ($4.5 million) needs.

More than half of these projects are eligible for available matching funds from the state that will reduce overall costs, and at the current time we are in the process of discussing preparing an RFP for a state specified consultant to prepare our submissions for matching funds. Our diligence on capital improvement projects and the ability to fund them through the use of available free cash puts the Town in a good position to address these needs in a timely manner and without the use of any further debt exclusions.

3. The Town’s financial position and budget flexibility is enhanced.

While there are efficiencies and cost reductions to the budget that will be had with this project, the financial risks to the town are reduced as we enhance services. One clear example of this is within the Police Station. New regulations have been enacted over the past 20 years requiring towns to meet specific standards where we are currently falling short. These are requirements that could not have been anticipated when the current police station was “converted” from a former Town Hall. We will need to rectify these legal issues whether we build a new facility or not. The build out of a new police station offers a second opportunity to the Town in the development of a regional dispatch. The plan is for the current police station facility to be repurposed and renovations to be picked up by state 911 tax funds.

As a to, we have made significant improvements in how we address our financial needs. Budgets are developed collaboratively and with a full understanding of current and long-term needs. Capital projects have been removed from operating budgets so that they can be discussed and prioritized appropriately. And differences of opinion are addressed well in advance of Town Meeting so that consensus and appropriate compromises can be met. Finally, five core principles of financial management have been unanimously agreed upon and are pointing the Town in the right direction over the long-term.

As stated previously, this financial rigor has received recognition by the rating agency S&P and our bond rating has improved with a stable outlook. We are now at a time where we can make investments to build upon our tax base and do so thoughtfully and on our terms as residents. These investments can grow our commercial and industrial tax base and therefore, improve our community while we reduce the burden on residents.

We are confident that this is in the best interest of the Town to maintain the services we provide and from a financial viewpoint when you consider the costs, risks, and opportunity. We are further confident as our colleagues on the Finance Committee, the Selectmen, School Committee members and Planning Board members have all unanimously expressed their support of the project.

We would ask that each voter listens to the facts, review the documents on-line at the Town’s website, ask the tough questions and weigh the financial considerations. We are confident that you will agree with our recommendation and cast a Yes vote on Tuesday, Sept. 15.

Steve Schoonveld, Chairman

Walter Wilk, Vice Chairman