Report from the Finance Committee Meeting on 9/7/16 (M. Kopicki)
The Finance Committee spent about 1½ hours discussing how to explain the financial implications of the elementary school building project to the townspeople before they are asked to cast their votes on the debt exclusion ballot in November. A draft statement has been prepared and they are continuing to work on it with the intention of it being published in the local paper, with supplemental materials to be posted on the town’s website.
The major issue they are trying to address is how to explain the impact on an individual taxpayer. They pointed out that the town’s share of the $67 million project would require about $33 million of debt plus $25.5 million of interest for a grand total of over $58 million dollars in actual cost to the Town as a whole. These figures are based on their best guess that the debt structure would be a 25-year bond with level principal at 5% interest. This means that the annual property tax burden would start high and decrease little by little every year until the debt was paid off.
The Finance Committee discussed the relative impacts of 20, 25 and 30 year bonds – the shorter the length of the bond, the lower the total cost including interest but the higher the yearly impact. They also talked about the fact that using average yearly costs does not accurately describe what people will pay each year and that people would not be pleased to find out that the actual costs are much higher for the first 12 years of the debt.
There was a lot of discussion about the other three major capital projects and the implications for the Town’s ability to fund them if the voters approved the debt exclusion.
They also addressed the issue of what happens if the ballot measure is voted down.
Having spoken directly to the MSBA, members of the committee pointed out that this does not mean that the Town is walking away from state funding but that there are alternatives and options that can be pursued in that event.
The document they are preparing will likely not be published until after the Project Scope and Budget has been approved by the MSBA at the end of September.
In the meantime, to better understand what the debt exclusion would mean for you, visit the debt calculator through our website (it shows how much additional property tax you would pay each year based on the assessed value of your home).
See video of the meeting for MaryLou Theilman discussion of contacting the MSBA, or other issues.
(or click here: https://amherstmedia.org/content/finance-committee-meeting-9-7-16 )
Update: The statement on “The Override: Its Meaning and Financial Implications” is available.