Article 5 on the upcoming special Town Meeting asks voters to approve $110M for construction of a new middle school on Old Marlboro Road.
Because it is a debt exclusion article, outside the limits set by Prop 2 ½, the measure needs a two-thirds affirmative vote at the Jan. 19 meeting, and a follow-up simple majority at a ballot vote in mid-February.
In January 2022, a small percent of the voting population approved a budget of $102.8 million to build the new school. But estimates over the spring and summer swelled the cost to $108M, and the Select Board voted last fall to ask the town for $110 million.
New estimates, at the 90 percent completion stage, will be unveiled before Jan. 19 and could be higher than the amount approved for the meeting.
Estimates from June 2022 put the construction cost at $86.1M, exceeding the January vote last year by approximately $5.3M “because of significant inflation in material and labor prices,” according to the Fincom. That is the primary source of the $7.2M increase that will be put before the voters.
“This increase of $7.2M will be funded, as was the original amount, through borrowing that is outside the levy limit,” the Fincom report says.
According to the Fincom, the debt associated with the elementary schools will be paid off in FY2030, and the high school debut will be paid off in FY2039. The middle school construction is the most expensive project ever undertaken by the town.
“Therefore, the new debt associated with the Middle School project would be incurred while the town is still paying off debt associated with other school building projects,” the report, sent to all households in town, stated. “Because excluded debt is financed through increases in property taxes, this has an obvious impact on taxpayers.”
The Fincom says the tax hike to pay off the debt is attributed to four factors: including the cost of design and construction; the interest rate for paying off the bonds; the time to pay back, whether 15, 20 or 30 years; and whether periodic payments are level debt or level principal.
Interest rates for borrowing shot up with the pandemic, going from 2.75 percent for 25 years to approximately 5.25 percent for the same time period.
The Fincom outlines that the “level debt” payment system for the current project can be similar to a home mortgage, meaning the amount of the payments would be “lower in the early years and relatively consistent from year-to-year.”
But the impact on taxpayers “will be larger” than the projected $902 for 25 years on the median value property of $971,000 with the recent revaluation.
The current tax associated with the middle school on the median value home of $1,169,500 is now $1,148 annually on a 25-year repayment schedule.
According to the Fincom, the debt associated with the elementary schools will be paid off in FY2030, and for the high school, FY39. Also $12 million has already been borrowed for middle school construction.
Mitigating the impact
The Fincom said the establishment of a stabilization fund in 2020 could tamp down the impact of tax increases once the project is underway. The stabilization fund directs budget surplus, or taxes collected but not spent, to be used to mitigate increases. Two million was allocated in 2020 and $1.5M was added in subsequent years.
If the vote fails
The Fincom notes that if voters do not approve the increase in Article 5, the budget would revert to the previously approved $102.8 million. The Middle School Building Committee said a no vote would mean a 6-9-month redesign delay, and further price hikes. The committee “believes” that would mean cutting an estimated $11.5 million from the current design. The committee has not offered a design option to meet the lower amount.
Key Dates and Events for the Concord Middle School Building Project:
| Information Sessions Hosted by the Concord Middle School Building Committee | Thursday, Jan 5, 2023, at 7 p.m. Zoom Meeting ID: 962 7329 9483 Passcode: 141129 Monday, Jan 9, 2023, at 7 p.m. Zoom Meeting ID: 975 6857 8967 Passcode: 948723 Wednesday, Jan 11, 2023, at 10:15 a.m. Fowler Library Tuesday, Jan 17, 2023, at 12 p.m. Zoom Meeting ID: 968 9317 4463 Passcode: 977904 |
| Additional Info Session For Council on Aging Members | Thursday, Jan 12, at 11 a.m. Harvey Wheeler Building |
| Special Town Meeting | January 19, 2023, at 7 p.m. |
| Concord-Carlisle High School Special Election | February 16, 2023 |
More Details:
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