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Former Select Board Member Dan Kowalski will ask Annual Town Meeting Monday to amend Article 7 so Andover can’t use additional room in its state-mandated tax levy capacity for capital projects.
If passed, Article 7 would allow Andover to 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.” Kowalski’s amendment would remove the “and capital projects” wording.
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 more than $100 million by the time the bonds expire in 2040. At the time, Kowalski said, he questioned why the Town asked for more authorization than it said it needed for the pension bonds.
“I looked at it as, if they screw up with retirement funding, they have a [pension obligation bond] ‘slush fund’ to tap into,” Kowalski said. “I didn’t foresee them wanting to use that ‘slush fund’ for other things. This is so wrong.”
Kevin Coffey, who campaigned for select board last month on a platform calling for fiscal responsibility, said he also wants the article amended, calling the version on the warrant a “back door” to more spending, debt and tax increases. Coffey fell 86 votes short in his bid to unseat incumbent Laura Gregory.
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The Town’s has about $409 million left of the $510.2 million, state-mandated debt limit — 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.
“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 in a text message when asked about Article 7 last week.
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 on Monday, 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.
The select board and finance committee are recommending Town Meeting approve Article 7. Kowalski was elected to the select board in 2012 and served two terms before not running for reelection in 2018.
“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.
Photo: Shutterstock / Wangkun Jia
This exempt, outside-the-levy, pension obligation bond debt and the associated impact on property taxes was approved specifically to address required funding of our pension obligation, and was a great initiative for getting this done responsibly. But it should not be able to be used for any other purpose. Any other use, including any capital project, should come back separately for new Town Meeting consideration.
In the Town Manager’s video explanation of Article 7, he states that this Article will “ensure that the excess levy capacity … will not be used for unrelated expenses.” Leaving “and capital projects” in the Article is inconsistent with this intention and commitment and so those words should be removed by amendment.
https://youtube.com/clip/UgkxHqR_p8vFP2aVsbfeCSqrsC9EDWvJVGv6