2017 December Debt Exclusion

On December 4, 2017, Lexington voters will weigh whether the town of Lexington can exclude from Proposition 2 1/2 expenditures for three capital projects .

Taxpayers should ask a few questions about these projects:

  • Are these projects in the interest of the town?
  • Does execution of these projects displace other projects or priorities which have higher importance?
  • Is financing through debt exclusion rather than through the existing tax levy in the interest of the town?

The election will ask taxpayers whether to exclude the debt service for three projects from the Proposition 2 1/2 levy limit.

Project Exclusion Amount (million) Total Cost (million) Total Cost per Household* Total Household Cost / Year**
Hastings School*** $49 mm $49 mm $4,250 $213
Fire Station**** $22 mm $27 mm $2,342 $117
Preschool***** $15 mm $23 mm $1,995 $100
Three Projects Totalled $86 mm $99 mm $8,586 $429

*Straight average, based on 11,531 households. A small % is shouldered by commercial & industrial property.
**Cost per year over 20 years
***The Hastings project has a total cost of $65.3 million; the amount shown above is net of projected MSBA reimbursement since that is most relevant for Lexington taxpayers.
****The fire station required the purchase of the former Liberty Mutual property for $4.5 million as a swing space. This land may subsequently be used for an envisioned police station swing space. Ultimate disposition of this land has not been determined.
*****The preschool required the purchase of the former Armenian Sisters Academy on Pelham Road for $8 million. The Selectmen envision developing further community center assets on this site.

The menu pages on this website provide additional context for evaluating these debt exclusions. Detailed information on the value these projects have for the community should be obtained from town documents.

Project proponents will likely challenge the amounts presented here as “overstated”. We think budgetary actions hide the total cost of projects. For example:

  1. Land costs for the preschool and fire station were absorbed in the operating budget to present a smaller amount for debt exclusion.  However, we feel that these are part of the full project costs, especially as land can be disposed and value recovered if projects were not pursued.
  2. The town retained tax revenue from prior years in a capital stabilization fund, which can then be used to smooth the tax increase.  In effect, taxpayers have already contributed $24.8 million towards these projects.  Again, if the projects were not pursued, these stabilization funds could be used to offset other projects, or the town could tax at less than maximum level.  Treating these funds as unrelated to the project reduces transparency.  In fact, taxpayers have no control over whether town meeting actually allocates stabilization funds to reduce tax increases, or whether these millions will again be used to reduce apparent cost of future projects.

The town manager has put out revised town impact figures
for the debt exclusion. These figures do not include the cost of land and the $24.8 million capital stabilization fund pre-collected from taxpayers. As a result, the projected cost reaches a maximum of $374 per year in Fiscal Year 2023 rather than the $429 cost figure shown above.

Thinking About Voting

How we think about voting is simply summed up by this little table:

Don’t Exclude Exclude
Bad Project Vote No Vote No
Good Project Vote No Vote Yes

First, each project should be evaluated on its merits. Is it a good value for the town? Does it solve an important problem? Would newcomers to the town be pleased that their taxes will be somewhat higher knowing that this project has been completed? Does the project raise the value of your home?

Second, if you think a project is a good one, should it be excluded from the Proposition 2 1/2 debt limit. This factors equally into voting, because you can support accomplishing a project but not want it excluded from debt. This page provides more details about debt limits and overrides if you would like to better understand these terms. At a high level, if you think a project is good but should not be treated as excluded debt, you are basically saying that you think the town can afford the project within its current tax levy.

These are subtle distinctions. If you believe a project should be supported but not excluded from override limits, we would encourage you to email Lexington’s selectmen and tell them your views. If you do not hit send on that email, don’t be surprised if someone else interprets your debt exclusion vote differently from you. Voice and participation matter.

More information on what a debt exclusion is and how this is different from an operational override.

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