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Andover News readers have submitted several letters in the past few days expressing views on the upcoming special town meeting, where two key articles related to the proposal to building a new Andover High School will be deliberated. If passed, Article 7A will set aside $1.3 million for a detailed design of the proposed school, while 7B would authorize spending $500,000 to develop an interim plan.
Jamie Kitces: Interim Approach Won’t Protect Bond Rating
Numerous people have expressed concern about the impact of building a new Andover High School on the Town’s bond rating. I believe these concerns are well founded, but they must be placed in context. The Town Manager has stated that any exempt borrowing of much more than $50 million would trigger a downgrade from the Town’s current AAA rating to AA+ and increase borrowing costs by approximately 0.25%. Importantly, this likely will be the case for the foreseeable future for any borrowing of this magnitude. A major factor is that one of the Town’s largest current sources of debt – that from the pension obligation bond (POB) approved by Town Meeting in June of 2021 – will not be retired until 2040. As a result, we may need to wait until then to do any significant additional borrowing without triggering a downgrade. This is an unfortunate situation, but it is the reality we face.
The interim approach which has been put forward (Article 7B) and which initially may sound appealing would need to both stay below $50 million and serve the educational needs of our students for perhaps another generation to not trigger a ratings downgrade. This is not remotely realistic. As a result, Town Meeting attendees will need to consider the impact of a ratings downgrade among a host of other factors. In my view, the needs of our students, the enhancement of property values, and the overall well-being of our town merit a Yes vote on Article 7A at the November 20th Special Town Meeting.
Windy Catino: Waiting To Build AHS Is Fiscally Irresponsible
Although most people in Andover agree that a new high school is needed, the timing of the project is suddenly controversial. Certain groups and a few elected officials are trying to cloak a delay in the AHS project in a false veil of “fiscal responsibility”. This false narrative is refuted by the facts. The Town Manager’s 9.27 report to the Quad Board meeting clearly states:1) “the total project cost increases significantly over time”; 2) the report does not address “potential impacts to [the] education plan”; and 3) “the modeling does not consider the impact of a bond rating downgrade” if the project is delayed.
Much of the report is premised on receipt of MSBA funding, which is a fantasy. Andover has requested funding 9 times from 2008-2021 and each request was rejected. Even if MSBA funding were finally approved, the earliest a new AHS would be complete is 2033. Instead of costing $452-480M today, the estimated cost of a new high school increases from: $450-521M (if completed in 2033) to $569-719M (if completed in 2039). The tax impact of waiting also increases from about $2k per average household now to as high as $3,267 if we wait until 2039, depending on various factors, and contingent on MSBA funding covering 17-23% of the cost. The impact to taxpayers will be higher if MSBA funding is not approved.
There is simply no scenario where waiting costs less. Therefore, it is irresponsible to delay the AHS project even one year, let alone another decade (when the Town’s massive pension debt is finally under control). The price tag increases each year, with construction costs rising 7.5% on average annually. So do not be fooled by the false notion that we should wait to build until we can “afford it.” If we wait – and waste $50M+ on band aid, interim solutions – the impact to education, tax payers, property values, and the cost of the Town’s debt will be massive. Please vote Yes to Article 7A.
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