Friday, September 19, 2003
We can't buy it all Finance Committee analyzes town's debt capacity
The Carlisle Finance Committee (FinCom) urged greater planning for future large capital expenses at the Board of Selectmen's September 9 meeting. FinCom Chair Lisa Jensen-Fellows presented a FinCom study that modeled the impact of new debt on the town's budget over the next dozen years.
The good news is that the town currently has a falling level of debt service as past building projects and land acquisitions are being paid off. Debt service has fallen to less than 6% of the town budget. (The reason tax bills haven't declined is that yearly operating expenses have continued to rise each year by 3 to 4%.)
The bad news from the FinCom is that the town cannot fully fund all proposed future building projects without large tax hikes. Even if the debt service were allowed to rise to 13.5% of the budget, the town will be able to take on at most $25 million in debt over the next 15 years. This is much less than the roughly $40 million required to fully fund renovation proposals at the Carlisle Public School and the Concord-Carlisle High School. Also, Carlisle faces additional capital expenses such as the school's waste-water treatment plant, replacement of aging fire, police and DPW equipment, and possible land acquisition requests. The town can handle more borrowing if it is spread out over time, and the consensus was that breaking large projects into phases would lessen the impact on the tax rate.
Jensen-Fellows noted that the numbers are approximate. Any financial predictions include assumptions about interest rates, population growth, state reimbursement for school building projects, and other details which will change as more information becomes available.
The Selectmen agreed with the FinCom that the town faced limits on its ability to support large capital outlays, and that it was important for town departments and committees to be aware of the debt limits when designing new projects.
© 2003 The