By Bob Dorer
At the September 11 Finance Committee meeting, extensive efforts to build a robust, fully integrated, rolling five-year capital plan for the town were outlined by the Town Manager Richard Reed, Superintendent of Schools Jon Sills, and the senior management team for the town: Assistant Town Manager Jessica Porter, Director of Public Works Roy Sorenson, Police Chief Robert Bongiorno, Finance Director Victor Garofalo, Fire Chief David Grunes, Director of Facilities Taissar Alani, and Information Systems Manager Sherwood Ives.
At the outset Garofalo announced that he and Reed had just received news that Standard and Poor’s has reaffirmed the town’s AAA bond rating and, even better, has raised the “AAA good” rating to “AAA strong,” referencing the town’s strong financial management.
Reed described the exhaustive process they used to identify and review the long-term capital needs of the town and its extensive infrastructure. The town is leveraging its investment in capital asset management software (VFA) to help structure and inform the plan. Garofalo proceeded to review many detailed elements, referencing several spreadsheet handouts, which describe in detail the year-to-year capital needs as well as a strategy for funding specific projects using the four bonding options available: non-exempt debt, exempt debt, the Community Preservation Fund, and water/sewer rates. He added that non-borrowing options for funding the identified needs include; water/sewer rates, Community Preservation Funds, and capital articles funded through the tax levy. Roads are typically funded through State Chapter 90 funds and the operating budget.
Throughout the plan, conservative projections were used for income, such as the Community Preservation match from the state. In addition the plan does not assume any state support for school-related projects, although in all likelihood the state will reimburse the town to some extent beyond the annual school aid and the impact aid for Hanscom student. (For more information, see: https://www.thebedfordcitizen.org/2014/09/12/town-boards-celebrate-permanent-funding-for-education-of-hanscom-students/)
Garofalo also summarized a key element of the plan, which is to insure that the ratio of debt to budget is maintained at a level considered prudent. This level is based on previous Finance Committee guidelines, as well as metrics from other towns in Massachusetts considered to be financially healthy and well managed.
One item historically questioned at town meeting, the replacement and purchase of vehicles for the town, elicited some discussion from the committee. Reed noted that DPW Director Roy Sorensen has put together a new vehicle replacement plan to clarify when such purchases are needed. Sorensen noted his plan factors in the projected useful life for vehicles plus revisiting the projection when a planned replacement time arrives. As in the past, all such proposed purchases will also be vetted by the Capital Expenditures Committee.
In general, the Finance Committee welcomed this new approach and noted that they look forward to working together toward the capital budget proposal for the Annual Town Meeting in March 2015. In particular, the committee emphasized that the plan needs to be a living document and will need to be revisited on a regular basis—it should not be perceived as a plan that cannot be adjusted in the years to come.