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08/23/2013

Council receives 10-year plan for capital stewardship, related paving plan and study

The Town Council on Aug. 12, 2013 received a $21 million, 10-year "capital stewardship plan" that addresses the needs of aging buildings, vehicles and roadways.

"I do want to emphasize that we're all getting older," said Town Manager Michael McGovern as he presented the plan to the council. "And just as we're getting older our buildings are getting older, the equipment's aging, our roads age, and some of the technology we have becomes more obsolete over time," he said.

Most of the "Facilities 2000" building projects, coordinated by a planning committee in the late 1990s, will be 15 years old at the outset of the plan, and 25 years old by plan's end, McGovern said. These include the police station, Town Center fire station, public works garage and improvement to the Richards Pool.

The plan, a step toward the council's goal of developing a comprehensive plan for town and school capital needs, proposes spending $21 million on improvements ranging from $6.9 million for roadway and drainage needs, to smaller building-repair projects costing less than $10,000.

"That sounds like an awful lot of money, and it is, it's an average of $2.1 million a year, over the 10 years, so, how would we pay for this?" McGovern said.

The plan proposes more than half of the funding, $12.4 million, come from annual capital-improvement budgeting, continuing to add $100,000 to the capital budget each year. Just over a half-million would come from account balances, and the remaining $7.9 million from bonding.

During the same time period the town will be retiring a little less than $7 million in municipal bonds, in addition to the $7 million paid down in the last five years, McGovern said.

Potential tax impact

For a home valued at $320,000, the fiscal 2014 tax bill of $5,200 would increase by $211 in fiscal 2019, the peak year of impact for the plan. "That's 4 percent higher than it is today," McGovern said. The largest single-year increase would be 2.2 percent, from fiscal 2016 to fiscal 2017.

After the peak year, the impact declines so that by fiscal 2024, the impact is $103 more than the current year, "so that 10 years from now taxes will be 2-percent higher than today with implementation of this plan," according to a slide-show McGovern presented with the plan.

McGovern was careful to point out a $5 million "placeholder" for improvements to the Thomas Memorial Library. "I make very clear that no one has said we're spending $5 million on the Thomas Memorial Library," he said. A library planning committee is currently assessing needs for the building and services, after a proposal to bond up to $6 million for the library was defeated at the polls last November.

Planning for pavement

Public Works accounts for 47 percent of the plan's proposal for investment, with 30 percent of the entire package devoted to roads.

At the same meeting, the council received a pavement management study report, and a report of priorities for road and sidewalk improvement for the next five years.

Robert Malley, director of Public Works, called the road-priorities report an "ambitious" plan, one that focuses on collector and feeder streets in Cape Elizabeth. "These are the roads that most people travel on," he said.

"We haven't put one of these together for a long, long time," Malley said of the plan. Although no funding has been approved beyond the current fiscal year, the plan provides a blue-print for road maintenance for the near future.

The pavement management study, conducted by Gorrill Palmer Consulting Engineers, Inc., shows that most residential roads in Cape Elizabeth are in good shape. McGovern and Malley attributed the condition of local roads to improvements made in conjunction with sewer-construction and rehabilitation projects.

Cost estimates from the pavement management study, and from a 2012 study of town and school facilities conducted by Harriman Associates, were used to help prepare the capital stewardship plan.

"I look forward to folks looking at this and using it as a guide as we look at budgeting for the next 10 years," McGovern said.

Next steps

Frank Governali, the town councilor who heads the finance committee, said he was scheduled to meet with School Board Finance Committee Chairman Michael Moore to continue melding municipal capital needs with those of the School Department for a comprehensive capital plan. Councilors said they would like to discuss the combined planning in a workshop this fall.

The schools' portion of the plan, Governali said, would make assumptions about bonding because the School Department does not have authority to bond. "At the end of the day the decision of what you bond versus what you don't bond is a function of trying to minimize the tax impact and position yourself adequately for your debt in the market," Governali said.

The reduction in debt McGovern mentioned as part of the municipal capital plan does not include school debt, he said. The slide-show he presented said $6 million of school debt would be retired in the next 10 years.