Andover’s Annual Town Meeting begins on May 1 and will continue on subsequent nights until all 41 articles on the 2023 warrant have been addressed. Andover News will publish explainers on key articles between now and the end of April, and publish a Town Meeting Cheat Sheet during the last week of April for those who plan to attend. Additional Town Meeting resources and information are at the bottom of this article.

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If Annual Town Meeting passes Article 7 next month, Andover would ask the state legislature to let it use excess levy capacity “solely for the purposes of paying pension obligation bond service, funding post-employment benefits liabilities, and funding capital projects.”

It’s the last “funding capital projects” phrase that could allow the Town to use the excess levy capacity for more than pension expenses — including offsetting the cost of building a new school.

The town’s current, state-mandated debt limit of $510.2 million, with approximately $409 million in available debt capacity, is causing problems as the Town looks for ways to pay for a new Andover High School, Preliminary estimates put the cost of a new school at $480.9 million.

In a text message exchange Thursday, Town Manager Andrew Flanagan said the excess levy, if approved, “would be applicable to any capital project that would typically be funded through the [Capital Improvement Program]”. The CIP covers improvements and maintenance to town and school properties, and those projects would also need to be approved by Town Meeting.

This years $24.5 million CIP, which Town Meeting will consider in Article 5 next month, includes $11.3 million in exempt tax revenue, some of which goes towards paying off bonds for the Bancroft and West Elementary School building projects.

“Theoretically, it could be used to offset how much debt that would need to be excluded for a school project, but it’s not sufficient to fund a school project,” Flanagan said.

The select board and finance committee are recommending Town Meeting approval of Article 7.

“This is a fiscally responsible measure that will create safeguards to ensure that the excess levy capacity stemming from the pension obligation plan is not used for unrelated expenses and will preserve flexibility for the Town to respond to unanticipated challenges that may occur between now and 2040,” Flanagan said in a video posted on the Town’s Facebook page Tuesday.

In addition to the $11.3 million in exempt tax revenue previously approved by Town Meeting, the CIP for the fiscal year beginning July 1 asks to borrow $4.9 million, including $1.1 million for major school projects. Those projects include $600,000 for a turf field at Bancroft Elementary School and repairs and maintenance at Andover High School, South Elementary School and West Middle School. The remainder of the $4.9 million would go to replacing a fire engine and public works vehicles, improvements at town parks and playgrounds and improvements at Old Town Hall and Memorial Hall Library.

Andover filed special legislation and issued pension obligation bonds in 2021 to free up excess levy capacity, a move that the Town says will save taxpayers over $100 million by the time the bonds expire in 2040.

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Share Your Thoughts!
4 thoughts on “Article 7 Could ‘Theoretically’ Be Used To Offset New School Cost”
  1. Let’s plan to amend this. Strike “any capital projects” and require that the levy amount “freed up” by the POB be used ONLY to retire (a) POB debt, as a first priority, or (b) once the POB debt is entirely discharged, other debt incurred in 2022 or earlier.

  2. In April 2021 I wrote a letter to the editor of the Townsman stating my concern that the excess levy capacity from the proposed Pension Obligation Bond exemption could be used to raise taxes for things other than our pension obligations. After this letter was published I was contacted by Town Manager and assured that the POB exemption would be used only for pension funding. As a result, I voted at Town Meeting to approve the POB bonds. Now two years later Town Manager is proposing to use some of this excess levy capacity for capital projects, not pensions. This is exactly what I was afraid would happen. Very disappointing.

    1. Will you be at Town Meeting? I hope you’ll bring that letter from the TM with you and speak against this article, unless amended to remove “and capital projects”.

  3. “This is a fiscally responsible measure that will create safeguards to ensure that the excess levy capacity stemming from the pension obligation plan is not used for unrelated expenses …,” the Town Manager’s words in his video, are simply untrue as the article has been proposed (by the Town Manager himself). With the words “and capital projects” in the article, the excess levy capacity could be used for any capital project and any capital project is unrelated to the Pension Obligation Bond!

    Where and exactly how much is the “excess levy capacity” in the FY 2024 that we are to vote on at Town Meeting? The FinCom report recently distributed does not adequately explain this.

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