Friday, October 29, 2004
Long-term capital planning comes to Carlisle
How should new school buildings be planned and financed to avoid excessive tax increases in coming years? How much money do Town Hall and the schools need yearly to avoid falling behind in maintenance and technology? How feasible are additional land purchases? These are the types of questions the Long-Term Capital Requirements Committee (Long-Term Caps) will be grappling with in the next months as it develops a new planning tool for analyzing town capital requirements.
Representatives from the Board of Selectmen, FinCom, Carlisle School, Long-Term Capital Requirements Committee, and town departments were on hand October 22 to learn about a new approach to scheduling and financing the town's capital requirements. (Representatives from Concord-Carlisle High School, though invited, did not attend.) According to presenter Lisa Jensen-Fellows, former chair of the FinCom, the need for a new planning tool has been evident for some time, and is particularly critical as the town looks forward to major capital investments. The new Capital Improvement Plan is a collaborative planning tool — "not a Soviet-style central plan" — that will look at major capital needs and financial resources over a rolling five- to ten-year period.
Providing financial information
According to Jensen-Fellows, one goal of the new plan is to help departments understand financial limits "so you don't spend six months and $15,000 in consultant fees only to have us say, 'No, we couldn't possibly do that.'" In the past, the Long-Term Caps collected requests from departments and put them on a schedule with no priorities or discussion. Each year, some would get funded and some would get pushed off. Department managers could not plan ahead, as decisions were year-to-year. When an idea for an investment was presented, "[the FinCom] had no idea of the town's debt level, the debt ceiling, or what other needs were going forward," says Jensen-Fellows.
Scheduling according to priority
She points out that town priorities, including education, conservation, public safety and town services will drive the model. "There are large [school building] projects desired, anticipated, and expected," and in the area of land acquisition, "there is a large body of opinion we need to do more." Capital assets must be maintained, upgraded and replaced in a timely manner and the funding requested under Warrant Articles "probably needs to be higher." In addition, a cushion should be provided for unexpected items such as the HVAC repairs at Town Hall.
Once each investment is assigned a priority, the model will look at cash availability to analyze which projects should get funded when. The model is dynamic, so different assumptions (ie: for interest rates or state funding) can be tested. Although the plan will change as priorities change, it will provide a reasonably predictable schedule against which department managers can plan.
Another advantage of the longer planning horizon, according to Selectman chair Tim Hult, is that it enables town managers to "think about options for getting more money into the capital plan where needed." Carlisle School Superintendent Marie Doyle responded incredulously, "So if I came to you for $25,000 in computers it's likely to get funded?" Jensen Fellows said the plan will take in to account "our recognition that technology has been underfunded at the school," which is "woefully behind" state recommended standards.
Some "good news"
Using some conservative assumptions, such as that state reimbursement for school building projects will be zero within the timeframe of the model, Jensen-Fellows presented a "strawman" analysis. Assuming $2 million invested in the town, $20 million for expansion at the Carlisle school, and a 30% share of a $45 million project at CCHS, the model predicted a tax increase of 4.4% per year. She called this "good news," adding, "That's a lot of investment, and 4.4% doesn't seem too outrageous." Hult cautioned that with tax rates already "20 to 40% higher than other towns, there not a lot of room at the top." But, he added, "Townspeople must recognize that if we want two-acre zoning, 30% of land in conservation, and the best schools in the state, it ain't free."
FinCom chair David Trask said the model should be used to manage the debt load and avoid a few years of "horrendous taxes" due to overlapping projects. For example, Carlisle would probably prefer to fund the high school project before the 2011 start targeted by the Concord FinCom. But flexibility may be limited; Hult noted Carlisle is working with Concord to move this up but "Concord has $200 million of buildings to build (elementary and high schools), and we must be sensitive to that."
According to Jensen-Fellows, the Capital Improvement Plan Committee will present a plan at Spring Town Meeting with the goal of "building awareness and working to consensus." New School Committee member Wendell Sykes noted that, in the past, Town Meeting financial discussions too often fostered extreme positions: "The sky is falling in the school department, while taxes are skyrocketing in the finance committee." He believes the capital plan "gives us a chance to finally have a sensible discussion."
© 2004 The