Fiscal Advisory

Committee
Recommendations for Long-
Term Capital Needs
Town of Duxbury
Annual Town Meeting
March 12, 2011

1
Long-Term Capital Review

 Definition of Capital:
• Total purchases that exceed $25K and have
an estimated life of 3 Years or more
 Capital Funding
• Cash Expenditures from the Annual Budget
• Borrowing under the Levy Limit
• Capital Expenditure Exclusion-adds to tax bill
• Debt Exclusion-adds to tax bill
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Capital Expenditure Categories

 Vehicles and Equipment

 Building Maintenance & Office
Equipment
 Building Renovation / Construction

3
Capital Expenditure Categories

 Vehicles and Equipment

• Reviewed inventory of assets – Over 150 Vehicles are
owned and operated by the town.

• Estimated life for accounting and actual use – Actual life

varies for the type of usage

• Estimated replacement cycle

• Expenditures typically from Capital budget and Borrowing

within the Levy Limit

• Recommend replacement of repetitive purchases be moved

to the Operating Budget
4
Vehicles and Equipment
Vehicle

1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-

 Assumes Actual Life – averages four years

longer than accounting life – Total Purchase
value of $6.3MM for all Town owned Vehicles
 Average Expenditure of $650K per year
 To be funded with Cash and Debt within the
Levy limit
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Capital Expenditure Categories

 Building Maintenance and Office

Equipment
• Includes repairs to roof, carpet, flooring, furniture,
computers, copiers, etc.

• Fiscal Advisory and Finance Director are working to

move these expenditures to the Operating Budget

• Establish a Central Maintenance Budget that is shared

among all town departments

6
 Building Maintenance
and Office Equipment
Maintenance

2,000,000
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-

 Actual expenditures from 2003 to 2010

 Annual average going forward - $750K per year
 There is discussion of increasing this expenditure after building projects are
complete to better maintain properties to delay replacement
 Fiscal Advisory recommends this be paid from funds within the Levy Limit –
Operating or Capital Budget

7
Capital Expenditure Categories

 Buildings and Real Estate

• Inventory of Town Owned and Operated Buildings and
Real Estate
• Estimated replacement schedule for the period from
FY2010 to FY2029
• Expenditures will be primarily Debt Exclusions

8
 Buildings and Real Estate

Building

700,000
600,000
500,000
400,000
300,000
200,000
100,000
-

 Actual expenditures from 2003 to 2011

 These are the expenses under the levy limit.
 Fiscal Advisory recommends Building Maintenance be paid from
debt inside the Levy Limit – Operating or Capital Budget
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Capital Expenditures

 Duxbury should set aside $1.5 million per year within

the tax levy for vehicles, equipment, building
maintenance and debt service.
 FY2012 budget (within the levy)
$1300K for Budgeted Capital in FY2011
$ 625K for Debt Service
Total $1.9 million
 Large building and construction projects should be
carried as a debt exclusion.

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 Building Projects
 Crematory Replacement - $2.6 million
Assumes 15 Year borrowing with Level Principal Payments
• Level Principal Payments is the method of financing Duxbury traditionally uses
• Estimated to add ~$41 to Median Tax Bill in FY2013

 Fire Station Renovation - $3.7 million

• $292K Design in FY2011 and $3.7MM in FY2012
• Assumes 15 Year borrowing with Level Principal Payments
• Level Principal Payments is the method of financing Duxbury traditionally uses
• Estimated to add ~$58 to Median Tax Bill in FY2013

 Police Construction – $6.275 million

• Design and Building costs in FY2012.
• Assumes 20 Year borrowing with Level Principal Payments
• Level Principal Payments is the method of financing Duxbury traditionally uses
• Estimated to add ~$85 to Median Tax Bill in FY2013

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Building Projects

 Combined High School and Middle School – Total

Cost of $130 million for new construction
• Finance in FY2014 (adds ~$733 to Median Tax Bill)
• 43% reimbursement from the State due to Model School
Design
• Assumes 25 Year borrowing with Hybrid Debt Service Payments
• Hybrid Debt Service Payments are level payments for the first ten years
• The remaining payments are Level Principal Payments
• Similar to a Home Mortgage payment for ten years
• Level Principal Payments are the method of payment Duxbury traditionally uses
• The change is made to level overall School Debt Service including the Alden/Chandler/PAC borrowing rolling off in
10 years from now.

• Current request of $2.9 million for Design

• Building Funding at Special Town Meeting – Fall 2011

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Future Building Projects

 DPW Building and Yard - $6

million
• This will replace the current facility and the water
department facility and provide a unified DPW work space
with room to store equipment in the garage
• Finance in FY2015+ (adds ~$82 to Median Tax Bill)

 Other long-term projects may

include repairs to the older
buildings, Sea Walls and Powder
Point Bridge renovation.
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Town of Duxbury Debt Service
10,000,000.00
9,000,000.00
8,000,000.00
7,000,000.00
6,000,000.00
5,000,000.00 TOTAL INTEREST
4,000,000.00
TOTAL PRINCIPAL
3,000,000.00
2,000,000.00
1,000,000.00
-
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
2037
Assumes all building projects are approved as proposed
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Town of Duxbury Debt
10,000,000.00

9,000,000.00

8,000,000.00

7,000,000.00

6,000,000.00

5,000,000.00 Total GO P & I

Water Total
4,000,000.00
Total Exempt P& I
3,000,000.00

2,000,000.00

1,000,000.00

-
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
Assumes all project approved as proposed

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Town of Duxbury
Debt Levy Estimates

Based on Current Impact

1,400.00
1,200.00
1,000.00
800.00
600.00
400.00
200.00
-
09
11
13
15
17
19
21
23
25
27
29
31
33
35
37
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Assumes current impact on Median Tax Bill
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Town of Duxbury
Debt Levy Estimates

New Based on Current Impact

1,200.00
1,000.00
800.00
600.00
400.00
200.00
-
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
38
20

Current Impact on Median Tax Bill of proposed new buildings

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Town of Duxbury
Median Tax Levy Estimates
Estimated Tax Levy Based on 2 ½% Growth Rate

14000
12000
10000
8000
6000
4000

2000
0
2011
2013
2015

2017
2019
2021
2023

2025
2027

2029
2031

2033
2035

2037
Current Tax Bill Based on Current Impact CPA

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Capital Planning

 Anticipated Construction Outlay

• Estimated $96 million over the next 10 years
• MSBA reimbursing $55 million of DMS/DHS building

 Cost of Debt Exclusion

• Estimated addition of $1,000 in highest year to Median
tax bill (~17% increase)
• Amount added to tax rate decreases each year as
older projects roll off, interest expense declines

 Debt Exclusion paid off by FY2038 for all

currently anticipated projects
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Assumptions for Plan

 All anticipated projects approved and

completed as presented by the respective
Building Committees
 Borrowing interest rate assumption of 4.25% to
4.83% based on Eastern Bank Presentation
 Average Vehicle Life based on current fleet
(over 150 vehicles):
o Cars - 8 years
o Pickups - 10 years,
o Large Trucks – 15+ years
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Town of Duxbury

Fiscal Advisory Committee

Long-Term Capital Plan –
FY2012

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