The Board of Selectmen is asking voters to approve a debt exclusion override, which is a temporary increase in taxes to pay for a specific debt – typically a capital expense such as a building renovation or repair. It is not permanent. When the project has been paid for, the temporary increase will be revoked and taxes reduced. See, e.g., http://www.mass.gov/dor/docs/dls/publ/misc/levylimits.pdf
The borrowing for all three projects will likely be undertaken with payments due beginning the fiscal year ending June 30, 2017.
Estimated Annual Tax Impact For All Three Projects:
An extra $0.13 for each $1,000 value of your home:
|House Value||Extra Annual Tax For All 3 Projects|
|$500,000||$65 ($500 x $0.13)|
|$750,000||$97.50 ($750 x. $0.13)|
|$872,100 (current average house value)||$113 ($872 x. $0.13)|
Estimated Annual Tax Impact Per Project:
|Project Name||Approximate Annual Impact for House Valued at $872,100||June 9 Ballot|
|Environmental Remediation||$35||Question #1|
|Ball field Synthetic Turf Upgrade & Lighting Conduits||$14||Question #2*|
$13,100,000 million of borrowing
4% interest rate (based on current interest rates)
15, 25 and 30 year terms (30 for culvert; 25 for remediation; 15 for turf)
“level service” borrowing terms**
Depending on variation in these terms, which will be determined at the time of borrowing, the tax impact could be slightly more or less. Terms of bonding must be approved by the Board of Selectmen, who are advised by the Town Manager, Treasurer and its financial advisors.
* Executing the ball field synthetic turf upgrade contemplated by Question 2 is conditional on passage of Question 1.
**“Level service” borrowing means that principal and interest payments are structured to be equal for each year of the term. This contrasts with “equal principal” structure, in which payments are structured so that an equal amount of principal (and resulting interest) is paid in each year. This approach pays down debt faster, and so results in lower overall cost to the town and taxpayers as a whole. It would increase payments above the estimates above somewhat in the short run, but payments would decrease over time to be less than the estimated annual amounts above.