When a special town meeting convenes later this year, it will be asked to approve $1.3 million for a detailed design of a new Andover High School — a design many backers say will give the project’s true cost and its impact on Town finances. Killing the project now, they say, would be killing it before all the facts are known and considered.
Opponents, meanwhile, say even $1.3 million is too much for a project that should be a nonstarter, given that shorter-term options, the impact on the Town’s debt profile and the consequences of what would be Andover’s first ever bond rating downgrade have not been considered.
And that means the special town meeting will be more than just a seemingly routine approval of $1.3 million for the detailed schematic design.
If the select board calls a special town meeting, it will be a referendum on the entire $451.5 million project.
Read all our coverage on the proposal for a new AHS
“I’m not saying it should be” a referendum, Finance Committee Chair Paula Colby-Clements when the board began analyzed a series of detailed financial models Wednesday. But “based on the feedback we’re getting from the community, they’re asking questions about the larger project even though we haven’t even completed schematic design.”
It was the finance committee’s first meeting since a joint meeting with the select board and school and AHS building committees last week, where Town Manager Andrew Flanagan and CFO Patrick Lawlor presented detailed financial models of different school financing scenarios. While the select board, and the school and building committees will likely recommend special town meeting approve moving forward with the schematic design, the finances committee’s view of the project is, for the moment, more ambiguous.
“I would suggest that, actually, the question of schematic design is very subservient to the question of should the project continue. The reason being, if we believe the project should continue, then it is a no-brainer that schematic design must be done,” finance committee member Andy McBrien said. “You can’t build a school without a design. [But if] our recommendation would be that the project should not continue, we don’t need schematic design.”
Perry: Improved Debt Profile Would Make Project More Affordable
The committee unpacked arguments by project proponents that waiting to build the project would make it even more expensive, even if the Town could obtain state funding down the road, pay off enough debt to maintain its bond rating, or both.
“I was looking to renovate my kitchen five years ago, but I had two children in college, so my debt profile was pretty high. I’m now renovating my kitchen five years later. The cost is higher, but my debt profile is lower, so it’s more affordable,” Vice Chair Kim Perry said. “Ten years from now it could be more affordable to do even though it’s more expensive to build it….It might be more expensive, but it’s more affordable and that needs to be understood.”
Borrowing for the project would lower the Town’s bond rating to AA+ from AAA, increasing the interest Andover would pay to borrow other capital projects in the future. Finance committee members also raised concerns about what impact a lower bond rating would have on Andover’s ability to attract businesses.
“I’ll give an example,” Town Manager Andrew Flanagan said in response to the bond rating questions. “When we were negotiating the [tax increment financing deal] with [Phillips], they were considering Andover versus St. Louis. When I went into a room with their executives, I pitched us as a triple-A community with strong financial management.
“To what extent that wweighed in their decision. I have no idea.”
We should keep in mind that funding the schematic design will not require exempt borrowing. It therefore will require only simple majority approval at Town Meeting. On the other hand, funding a new school will require exempt borrowing and therefore will require a 2/3 vote of approval at Town Meeting.