Guest columnist Toni Cunningham: Amherst may not be able to afford 4 major capital projects

  • Jones Library JERREY ROBERTS

Friday, March 29, 2019

The five-member Finance Committee of the Amherst Town Council recently learned that the town cannot afford all four major capital projects as proposed.

Despite optimism expressed by the town manager and Select Board in recent years, the fiscal reality of the town renders the proposed projects unaffordable. Estimates from feasibility studies priced the Department of Public Works building at $38 million, a South Amherst fire station at $24 million, and the Jones Library renovation and expansion at $36 million.

In his presentation to the Finance Committee on March 12, Capital Projects Manager Sean Mangano listed multiple options for the fourth major capital project — addressing Wildwood and Fort River elementary schools — the least expensive of which is $82 million for a single, new 600-student K-5 school, with sixth grade moving into the middle school.

When the cost of each project estimate is escalated to the most likely year of construction, the total principal cost is over $200 million. Assuming state grants are received for the library and school, the net cost to the town would be about $150 million. This far exceeds the town’s maximum debt capacity, which Mangano estimates at $105 million after accounting for current debt commitments.

State law limits a town’s debt capacity to 5 percent of equalized valuation, which is the estimated value of all taxable property in the town.

In order to fit all four projects well under the debt ceiling, the projects would need to be scaled back or spaced out more. Using an interactive planning tool, Mangano demonstrated different combinations of projects, costs and timelines. One such combination reduced the DPW project budget to a 2025 cost of $30 million, the fire station to a 2027 cost of $20 million and the library to a 2023 cost of $10 million. If the library were to be limited to a budget of $10 million, it would likely mean dropping the expansion plans and instead repairing the existing building.

According to Mangano, the town’s ongoing capital needs also come out of the same pot of money. This includes roads, sidewalks, building maintenance and equipment, as well as a growing number of other smaller projects including the North Amherst intersection, the North Common, the high school athletic fields, the Station Road bridge and new sidewalk projects.

Using the tool, Mangano ran models that reduced funding for ongoing capital to test against available funding and debt capacity restrictions. If the ongoing capital allocation were cut in half, it could hinder the town’s ability to maintain infrastructure, undertake other projects, or deal with emergency situations.

At a town budget forum on March 7, Town Manager Paul Bockelman highlighted roads, sidewalks and crosswalks as priorities, as well as the four major projects, although no cost estimates were discussed. The intention of the sparsely-attended forum was to hear from the community what their priorities are with the budget. An online form has been created for residents to share their budget priorities with the Town: http://tinyurl.com/BudgetFeedbackForm.

Mangano’s model included debt exclusions for the school and library, which would result in property tax increases exceeding $500 on the average home. Mangano will make his interactive tool available to Finance Committee members first and subsequently to the public so that anyone can explore scenarios for funding the major capital projects.

Toni Cunningham is a resident of District 1 in Amherst and a former Precinct 3 Town Meeting representative.