CIP Meeting Minutes
12/28/17
Members Present: Karen Hambleton, Michael James, Jim Bibbo, Jason Allen, Claire James
Meeting was called to order at 6:00pm
Town Hall Financing Discussion
Michael James stated that after reading the memorandum provided by Frank J. Barrett, the architect currently working on the project, that he is in favor of the second option (i.e. – mothballing the building for the short term and adopting a savings plan for future repair).
Karen Hambleton recapped Mr. Barrett’s suggested options:
- 950K for full Town Hall overhaul, (presumably financed via bond)
- 125K-150K to mothball the building (this would be additional to what we have on-hand to spend) and create future savings plan to repair.
Other comments related to the project and the financing thereof, included the following:
- Karen informed the committee that every 50K allotted to the project would add approximately.25 cents to the tax rate. So 200K would be approximately another dollar added to the tax rate if that is the amount decided upon to be saved annually until repair work can be done.
- Karen explained that the remaining 509K on hand will allow for Town Hall structural objectives to be completed (i.e. – finish foundation, frame in back corner of bldg., put in structural steel and button up against the weather) but it’s not enough to move back in.
- Jason Allen commented that the annual 20K heating bill estimate sounded very high, especially for an unoccupied building. This could use further looking into.
- Michael, Jason, Claire and Jim debated the merits of financing via a bond. Jim stated that to our advantage, interest rates are still low. Jason expressed his opinion that the interest the town will incur for a 950K bond, even given a low interest rate, will put the town in an unfavorable position. Claire stated that the town is currently holding a debt of 380K worth of interest payments. A bond for 950K would push that debt to anywhere from $750,000 – $1,000,000. If a portion of the 950K was invested annually until the project could be completed, the town could have a significant surplus of money, as opposed to mounting debt. Mike expressed his opinion that there is no urgency to move into the building at this point but that the town should save for the remainder of the restoration in a financially prudent manner.
- Jim discussed putting two articles before the voters – one for a bond and one for a savings plan over the next few years. Jason commented that there should be an option to mothball it, in case both options are not passed by the voters. Jim Bibbo talked about pursuing grants to minimize the total bond payment. He also stated that the Select Board has not yet voted on how to put forth proposals to the voters. It could be a bond, but it also could be a course of savings over a few years.
- Karen mentioned that the school tax savings has already been spoken for in 2017. Jim asked what the tax rate is for June. Karen said it’s half the tax assessment for the year but there is no tax rate per se for that month (June). The upshot is we cannot use this money to offset Town Hall expenses. It is already spoken for.
- Michael asked the committee for a vote re financing the Town Hall via bonding as an option. The vote result: 3 – No, 2 – abstain.
- Michael proposed a second vote to mothball building and come up with savings plan for financing which would not require a bond. The vote result: 3- yes, 1- no, 1- abstain. He then advised that he will crunch the numbers to come up with a proposal for a savings plan for Town Hall.
- Jim stated that he was concerned that the town will not receive grant money with a savings option, which is why he was opposed to mothballing the building. Michael asked for clarification on this and why we would lose grant opportunities with a mothball/savings plan. Jim responded that if we mothball, this is not considered saving money for the project. And if we apply for a grant when our savings plan is 8 years out, then we will likely be denied. Claire suggested maybe we apply for a grant at a later point in time – closer to the end of the savings plan, as the savings plan would not be too far out at that point and closer to completion. Jim also said that he is in favor of at least two warrants articles to give the voters a choice.
Other Items of Discussion:
CIP and past results
Karen asked how closely the Select Board has followed CIP in past years. Claire responded that in years past it was followed to an extent but that recent years have been spotty. There has been some success but it requires regular oversight/updating, which is time consuming and all volunteer based. Its success depends on regular updating and actual adherence to the plan, as would any savings based plan. Karen pointed out that to get buy in for the CIP, we have to sell why planning is the way to go. Interest is a talking point, but not enough. Claire agreed and mentioned that there will be presentations given to his effect (to the town residents) prior to the upcoming town meeting. Residents’ understanding of the importance of a CIP is key.
School Board Capital Reserve Fund
Jim mentioned that the school cap reserve fund has accumulated 2 million in reserves over a 15 year period. So capital reserves can in fact make a significant difference. Claire suggested getting someone from the school board who was involved in that to speak to the efficacy of the CIP. Claire asked how much the school project was. Karen said it should be in the school report.
Town Hall Maintenance Plan
Jason talked about creating a maintenance plan for the Town Hall. Michael responded that that there are “general building” trusts that we have right now but that he would need to double check the wording attached to these to see if they could be used for maintenance purposes. Karen commented that one is for emergency usage and one is for repairs, to her recollection – but that neither of these are maintenance. Michael will go back and double check this wording. Michael also said that he thinks the way Sutton does their warrant article for their trust accounts is the way to go. (i.e.- putting all cap reserve requests on one warrant article, as opposed to separate articles.) Karen stated in past years we did this but not last year.
BNSYS (Bradford Newbury Sutton Youth Sports) Trust and town trusts in general
Michael suggested that a trust be established for the BNSYS group. On the topic of trust funds in general, Karen expressed concern that we set ourselves up for continued success should the current Trustees of the Trust Funds not occupy their positions in the future. Michael responded that the trustees have been taking steps to shore up the structure of the town’s investments, in order to make things more organized. Karen also asked if the voters can see how the town is investing its money, as currently (other than trustee public meetings) there is no way for voters to get this info. Michael agreed that it’s a great idea to set up future info sessions on this for the voters, to help them understand how our investments are working for us.
Difference between cap reserve and trust accounts
Michael will call the Secretary of State to confirm the difference between cap reserve and trust accounts, and whether that money can be moved to another purpose if either of those accounts close.
Cemetery Trust Funds
There was some discussion about the cemetery funds and using that money to offset future cemetery related expenses. (The town allocates 20K approx to fund cemetery operating expense.) Michael responded that these funds cannot be used to offset cemetery related expenses this year but can possibly be used the following year to do so.
Meeting adjourned 7:24 pm. No new meeting date was scheduled. Once Michael sends new CIP numbers to include Town Hall, we can set a meeting date if further discussion is needed.