January 16, 2013LITTLETON — Last week's bond hearing led several residents to express concerns about adding to Littleton's debt load. Four draft warrant articles with a total cost of nearly $700,000 were discussed at the hearing. Residents informed the Selectmen that adding to the debt burden may not be the best approach.
About 30 people attended Thursday night's hearing. Warrant articles for the street sweeper, pellet boiler, refurbishment of Engine 6, and road maintenance are currently items that would be financed.
Information at the hearing showed that, even with no new loans, Littleton would not borrow less than $1 million until 2016. Even with no new borrowing, the town would have a debt service of $709,000 in 2020.
If the four warrant articles all passed with borrowing, the town's debt due would increase more than $244,000 in 2013. During the meeting, Chairman of the Select Board Marghie Seymour said that the town was looking for funding options during the budget process. She said low interest rates are one reason for the level of suggested borrowing. "The cost of borrowing money is extremely low right now," she said.
The Energy Conservation Committee, which developed the pellet boiler article, may have started the trend against adding debt this year. Recently, the committee suggested that the pellet boiler be paid for upfront, rather than through a loan. One reason is that a bonded warrant article requires a 60 percent affirmative vote.
The committee was concerned that this would decrease chance of passage for the heating system, which is projected to pay for itself in about eight or nine years. The suggested new heating system would be hooked into the town garage and fire station. Up to $130,000 would be authorized for the system under the warrant article.
At the hearing, Ron Bolt, a member of the committee, provided additional reasons for the move against borrowing. A loan for the pellet boiler would add $6,000 to the total cost due to interest payments, he said.
Bolt also worried about the current level of town borrowing. "We're spending over $1 million a year" with borrowed money, Bolt added. "I would strongly encourage the board to reconsider this as a bonded item," Bolt said to the selectmen.
Town Manager Fred Moody said that the $130,000 boiler cost would have a tax impact of 17 cents this year if it was paid for without borrowing. A three-year loan lowers the 2013 hit to six cents, but adds interest payments as Bolt informed the hearing attendees.
The trend against borrowing continued as other warrant articles were discussed. Fire Chief Joe Mercieri hoped to avoid the 60 percent vote requirement for the upgrade to Engine 6. "This is a public safety item," he said.
The bumper-to-bumper refurbishment should add as many as 12 years to the engine's life, Mercieri added. "That would be an outstanding payback for the taxpayers," he concluded.
Tony Ilacqua supported Mercieri's idea. Avoiding more debt would save money and not add to the town's interest payments, he said.
Rusty Bulis added his voice to the anti-borrowing group. "We are encumbering future budgets," with more borrowing, he suggested. The Engine 6 cost "should just come right out of the budget," Bulis concluded.
The warrant article for roads would add most to the tax rate if the town did not borrow the money for the $259,000 price tag. A thirty-four cent increase to the rate would happen in 2013without borrowing. The improvements would be made to North Skinny Ridge Road, Reidy Way, and Riverside Drive.
Although he shared speakers' aversion to borrowing, Mike Dickerman issued one note of caution about the larger upfront costs without loans. Voters may decide to not fund worthy items if the tax rate goes up too much this year. Dickerman hoped to avoid town layoffs or other budget cutting that may be required if voters decide to cut spending in response.
Littleton's Deliberative Session is scheduled for February 5th. This meeting allows voters to debate and adopt amendments to each warrant article. March 12 is town meeting day, where voters will decide the fate of the warrant articles, as well as town and school district budgets.