Local Government

Daily Buzz | Upcoming Building Projects Will Cost $100M+

But how will they be funded?

Nicci Kadilak

— 4 min read
Daily Buzz | Upcoming Building Projects Will Cost $100M+

Good Morning, Burlington!

We had our days mixed up yesterday and didn’t feature a photo from the talented Phyllis Neufeld. Here’s a make-up!

There have been two editions of the library’s Cookbook Book Club now, and the next is coming up in a few weeks. But the unique thing about Cookbook Book Club is that attendees actually make and bring a recipe from the book for everyone to try. Stop by the library and pick up this month’s cookbook today, so you’ll have enough time to read through and try some recipes before the meeting on April 5.

Upcoming Building Projects Will Cost $100M+

The Town of Burlington has several very large building projects on the horizon. A new Fox Hill School will cost about $100 million, with the town’s share falling around $62 million assuming the state subsidizes the project. A new police station will cost between $40 and 50 million. Both of these projects are on the town’s agenda in the very near future. Soon to follow will be a new or renovated high school, which is likely to cost more than the other two projects combined. But how will the town pay for these projects, and how will it affect you as a resident?

There are a few different ways to fund projects like these:

  • The cost could be fit into the operating budget. Several capital projects over the last 10 years (Fire Station 2 and the DPW garage, for example) are being paid for out of the town’s regular budget. This means residential tax increases stay within the allowed range for the state.

  • The cost could be funded by a tax override. This is a question, voted on by a simple majority of voters at an election, that allows a tax increase over and above the 2.5% increase allowed by the state. There are two different kinds of overrides:

    • A Proposition 2 1/2 override allows for a permanent increase in taxes.

    • A debt exclusion (or 2 1/2 exclusion) allows for a temporary increase in taxes until borrowing for a capital expense falls off the debt schedule. In other words, taxes go up until the project is paid off.

Here in Burlington, officials at the town level have discussed various iterations of the above plans, from trying to fit as much as possible into the operating budget and free cash to placing the projects on a debt exclusion.

Since Burlington has historically kept taxes low for homeowners, the town does have some wiggle room to increase taxes but stay under the state’s threshold; this could allow the town to move forward with both projects regardless of whether or not a debt exclusion is approved by residents. Without tax increases, however, this strategy would accelerate the rate at which Burlington meets the 2 1/2% threshold we’ve managed to stay under each year. And, if that happens, the town will have to take a hard look at services and make some sacrifices with respect to what services are offered—especially those offered at no cost to residents—or face a 2 1/2 Override.

A debt exclusion would exclude the amount of the project from the 2 1/2% increase threshold and keep our operating budget working as normal. This would function as a temporary add-on to residential property tax bills until the borrowing is paid off.

It’s worth noting, though, that whether the projects can be fit into the regular operating budget or voters approve a debt exclusion, property taxes are likely to still increase by around the same amount—which, for the Fox Hill and police station combined, will be about $350 per year on the median home value.

Town Meeting must approve the borrowing for these projects by a 2/3 majority. If the town decides to fund one or more of them through a debt exclusion, the Select Board will need vote to put it on a town-wide ballot, which would be administered either at the presidential election in November or a special election at a different time. And, to make things more complicated, the town has 120 days after the MSBA approves the Fox Hill project (likely this August) to make all that happen or risk losing the state reimbursement for the project.

These are complicated matters, and the town will be taking a long view of what each option would mean for the town, keeping in mind other likely projects that are on the horizon. The Buzz will keep you updated as the funding strategy comes into focus.

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That’s all for today. Have a lovely Monday!

Nicci

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