Lincoln Finance Committee State of the Town Meeting October 20, - PowerPoint PPT Presentation

Lincoln Finance Committee State of the Town Meeting October 20, 2018

School Building Related FinComm + Town Actions Since June Town of Lincoln Finance Committee ▪ Drafted written management policies to boost that sub-score in S&P credit rating ▪ Budget oversight, Debt Mgt, Emergency Reserves, Financial Forecasting, Fraud, and Post Issuance Compliance ▪ Attended SBC meetings and followed proceedings ▪ Developed a review plan based on relevant parts of MSBA process ▪ Creating a tentative financing plan and schedule ▪ Investigating new Senior Means Tested Tax Exemption Program 2

School Building Financing Issues Town of Lincoln Finance Committee ▪ Looking at ALL available funding sources ▪ Likely: bonding, Stabilization Fund, and Free Cash ▪ Investigating: Solar incentives, CPA, Chap 90, cable fees, Complete Streets, other state funding ▪ Endorsed 3 rd party “PPA” approach for solar install rather than purchasing directly ▪ Working on borrowing schedule proposal ▪ Use Stabilization for lowering amount of borrowing and/or smoothing tax bill increases ▪ Interest rate risk concerns probably argue for “front loading” the borrowing 3

Annual Residential Tax Bill Increase for L3 Building Concept Using FY2018 Valuations and Excluding Stabilization Borrowing Interest Property Value Amount Rate $ 500,000 $ 750,000 $ 997,500 $ 1,250,000 $ 1,500,000 $ 2,000,000 Percentage $ 93,900,000 4% $ 1,276 $ 1,915 $ 2,546 $ 3,191 $ 3,829 $ 5,105 18.8% $ 93,900,000 5% $ 1,435 $ 2,153 $ 2,864 $ 3,589 $ 4,306 $ 5,742 21.1% Median Taxpayer: 2018 Tax Bill of $13,566 Note: This “level debt” approach adds the same fixed amount to your tax bill every year of the 30 year term. 4

Debt Service as % of Operating Budget Borrow $93.9mil in 2019 and $20.4mil in 2024, Excluding Stabilization 16.0% Case 1: 30 year, 4.0% interest rate 14.0% Increase 12.0% due to Case 2: 30 year, 5.0% interest Increase due rate 4-15% School 10.0% to Community Agency Building Range Center 8.0% 6.0% 4.0% 2.0% 0.0% 5

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Estimated Room Available Under 5% Debt Limit Assuming 2% EQV Annual Growth and Excluding Stabilization $60,000,000 Town should have $14.7m Room available if $93.9m $50,000,000 available at March 2019 Town authorized in FY19 Meeting even if we bond entire $93.9mil School Building cost $40,000,000 $30,000,000 $16m Community Center $20,000,000 Cost w/ 5% escalation Community Center should fit $10,000,000 under Debt Limit by 2023 completion of School $0 2019 2020 2021 2022 2023 2024 2025 2026 2027 7 Fiscal Year

Projected Capital Expenditures 2020-2030 ● Focus on items other than school building and community center ● Possible large debt exclusions: ○ FY20 Hartwell roof design+repair ~$659,000 ○ TBD Property acquisitions for conservation ● Smaller possible capital or debt exclusions: ○ FY21 LS roof ~$300,000 (Lincoln portion) ○ FY23 Replace fire engine 1 ~$575,000 ○ FY24+ DPW roof repair ~$250,000 ○ TBD Brooks athletic field renovation ~$400,000

Debt Service as Percent of General Fund Budget 16% 1988: Library Renovation 14% 2006: Fire Truck 12% Bemis Renovation 10% 2011: 2015: Road Improvements Library Fire 1989: 8% Ambulance Suppression Flints Fields Landfill Closure 6% 1996: 4% Public Safety 2012: Building 2% Town Office School Building Renovation 0% 11