FINANCING

At the May 20, 2019 Annual Town Meeting, the citizens of Charlton approved a warrant article to borrow up to $28.5 Million for the construction of a Public Safety Facility. The vote as passed was not contingent upon the passage of a debt exclusion vote. 

August 13, 2019 a debt exclusion vote on the project was considered by the voters and failed. Following the vote the Board of Selectmen directed the Building Committee to look into the feasibility of a Fire Station only plan. On November 20, 2019 the Building Committee reported back to the Selectmen that the cost to build a new Fire Station and address known deficiencies in the Police Department would cost more in construction and operational costs than a combined Public Safety Facility. At that time, the Board of Selectmen elected to ask the Voters to reconsider a Debt Exclusion Vote while looking at methods to reduce the financial impact on the Charlton residents.

 

On January 15, 2020, $1.4 Million of the authorized $28.5 million was approved to be expended within the Levy Limit to develop construction documents for the building with the goal of providing a true construction cost to the voters at the November ballot.

On October 23, 2020, the Building Committee received a low apparent general construction bid of $22,025,000. This reduced the total Debt Excluded project cost from $27.1 Million to $25.4 Million. Over $300,000 in private donations from the Capital Campaign Committee has further reduced the Debt Excluded project cost to $25.1 Million.

 

On November 3, 2020 Charlton Voters will be asked on the Presidential Ballot to exclude the remaining $25.1 Million project cost from the tax levy. This exclusion amount may be further reduced through private donation, construction savings and funds allocated under the tax levy from the annual operational budget.

 

The Town's Finance Team is currently considering a 30 Year Bond for the financing of the construction project. These options would have the following impacts on residential property assessments:

The below formula shows the financing timeline of other Debt Excluded projects in relation to the proposed Public Safety Building 

Calculate your projected tax impact

Override vs. Debt Exclusion

WHEN THE STATE IMPLEMENTED PROP 2-1/2, IT WAS DETERMINED THAT EXCEPTIONS NEEDED TO BE ALLOWED IN ORDER TO ACCOMMODATE LARGE DEBT PROJECTS, CAPITAL EXPENDITURES AND INCREASES IN OPERATING BUDGETS WITH TOWN VOTER APPROVAL.  THIS WOULD BE ACCOMPLISHED THROUGH OVERRIDES, DEBT EXCLUSIONS AND CAPITAL EXCLUSIONS.


OVERRIDE: Permanent Increase in the Levy Limit.  This is usually done to increase the Operating Budget.  Charlton voted an Override to increase the DCRSD Operating Budget effective Fiscal Year 2019.


DEBT EXCLUSION: Moves the Payment of Debt and Interest to Outside the Levy Limit. Expires when the last Debt and Interest Payment is made.  Charlton has voted several of these Debt Exclusions over the years with a final payment being in FY 2025 for the Town’s Highway Facility.  At which point there will two remaining school debt exclusions-one for DCRSD Athletic Fields and the other for Bay Path Regional Vocational School.


CAPITAL EXCLUSION: Allows for payment of a Capital Item Outside of the Levy Limit.  This is a one-time/one-year exclusion for the purchase of a specific Capital Item.  I am not aware that the Town has ever utilized this method, although other towns in Worcester County have utilized this method.

Debt Exclusion Ballot Question

At the November 3rd election, voters will be asked the following question:

Shall the Town of Charlton be allowed to exempt from the provisions of proposition two and one-half, so-called, the amounts required to pay for the bonds issued in order to pay costs of constructing and equipping a new public safety building and for the payment of all costs incidental and related thereto?


Yes ____ No ____

A YES vote will allow the town to exclude the $27.1 Million project cost from the Tax Levy Limit over the term of the loan.

 

A NO vote will not allow the town to exclude any project cost from the Tax Levy Limit. 

Information Provided by the Charlton Public Safety Building Committee & Tecton Architects