Future spending takes shape in capital improvement plans

Building the town budget — part two

WOODBRIDGE - The annual town budget is made up of three main components; the operating budget, debt service and the capital improvement plan. These three elements combine to set town spending levels and determine how much money the town will have to collect in revenue to function in the coming year.

The mill rate, or factor by which tax assessments will be calculated for the fiscal year in order to meet the town's revenue requirement, is determined once the budget is approved and all variables are set for the year. This happens immediately after the Annual Town Meeting, scheduled this year for Monday evening, May 20.

The capital improvement plan covers the expenses associated with projects to maintain, repair or upgrade town-owned buildings and land. This includes Town Hall, the Center Building, the Town Library, Beecher Road School North and South and the FireHouse, as well as various playing fields, the fitness trail at FitzGerald Field and the tennis courts. Equipment and vehicles owned by the town are also covered in this portion of the budget; public works trucks and equipment, fire engines, rescue tools and others.

The Boards of Selectmen and Finance are currently in the process of reviewing each town department's capital budget request for the new fiscal year (FY) 2002-03, which begins on July 1. Jan. 15 has been set as a tentative deadline for final capital plan submissions from each department, and the BOF hopes to set this portion of the budget by the end of the month, before moving on to examine components of the operating budget. In the meantime, a look at last year's capital budget plan provides a glimpse at the process and it's ramifications.

In last year's capital plan for example, money was earmarked to replace the leaking Beecher South roof and the damaged plywood fascia where the roof and exterior wall meet. A combined total of $551,000 was estimated for this project in the FY 01-02 budget adopted last May. At the time, there was already a total of $96,000 in reserve from previous years for the re-roofing portion of the job. The remainder — estimated last year at an additional $100,000 for the fascia work and $355,000 for the roof — appeared as line items in the Capital Improvement portion of the budget.

A careful look at budget documents however reveals that these figures are not rendered in bold-faced type to indicate that they have also been incorporated somewhere in the Operating Budget for that year, as some capital improvements are. Therefore the re-roofing and fascia repair costs essentially exist only as estimates on paper — "projects under consideration for public funding"— for the purposes of the 01-02 budget, and these funds are not actually encumbered in any concrete sense.

The plan, clearly detailed in footnotes to the Capital Improvement portion of the budget, actually calls for this and other projects to be funded with a bond when the project itself receives the green light from the town Boards. This bond must then be approved in the course of a Special Town Meeting before the project can begin.

Indications are that as plans for this re-roofing and fascia project at Beecher South are reaching a final stage, announcement of a Special Town Meeting to approve funding may be called within the next month. If such bonding is approved, work is expected to begin this spring and be complete by the opening of school this September.

The cost of this bond would then be factored into the town's budget under the category of Debt Service Payments in whichever year payment begins.

So what does it mean when projects appear in the town's Annual Budget under the Capital Improvement Plan? Inclusion here serves as acknowledgement on the part of the Boards of Selectmen and Finance that certain big-ticket capital expenses are on the horizon. But unless a line item in this portion of the budget appears in bold face come May 20, actual dollars are not involved until project specific funding is approved. This can come in the form of bonding, state or federal funding, or donations from other sources such as the Town's Open Space Acquisition Fund.

By creating the Capital Improvement Plan, which takes a six year view of the future, the town gets a handle on future debt service costs, but does not necessarily commit funds to any given project in the future.

The planning for these capital projects is done in tandem with the work of the town's Long Range Planning committee, which meets throughout the year to forecast future needs. The timing of plans for such projects as a new firehouse, a substantial addition to Beecher South or any plans for facility expansion at Amity, among other projects, are weighed and evaluated before making an appearance in the Annual Budget under the Capital Improvement Plan heading.

But only when funding is specifically approved in either the operating portion of the annual budget — or later through bonding, grants or donation — does a project move forward to become reality.