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Roofs Will Have an Average Net Cost Per Household of $30 Per Year with L-S Debt Closing Out
Two proposed school roof projects in Sudbury have been at the center of a debate about optimal funding sources for the projects. But the debate about the funding sources appears to have been rendered moot in the Monday, November 24 meeting of the Sudbury Finance Committee.
The Town of Sudbury administration has opted to pursue a debt exclusion. That’s a temporary tax increase to borrow for the portion of the project that isn’t reimbursed by the Massachusetts School Building Authority. However, a private resident has been lobbying boards and committees to consider dipping into free cash and the overlay surplus, then funding the remainder with in-levy debt, and theoretically avoiding a tax increase.
Those arguments were dismantled by Sudbury’s Assistant Town Manager and Finance Director, Victor Garofalo, during the November 24 meeting of the Sudbury Finance Committee. Garofalo explained why the funding proposal was ill-informed, and potentially unlawful. Though Town leadership remains open to potentially using free cash on the roofs at the Annual Town Meeting in May… once they have made decisions on the capital projects that will be presented at Annual Town Meeting.
On dipping into the overlay surplus, Garofalo noted:
“With regards to the overlay surplus, under the law, Mass General Law, Chapter 59, Section 25, only the Board of Assessors can release overlay, which they have not done. So, while this, you know, is a valid use of an expenditure, that has not happened. So Town Meeting could not take a position on any excess overlay until the assessors have formally voted the release of the excess overlay. So while that motion could be made, it would be deemed, you know, not within the four corners and would not be allowed, because assessors have not taken a position on them.”
He added that the Town administration has already presented a plan to draw down the overlay surplus: “So we have a plan in place to be able to draw down on this overlay balance, and we’ve had those discussions with the Select Board. We actually had the discussion with our Director of Assessing. And we’ve also, I think, had those discussions with you. So we have a plan in place to use the overlay.”
Garofalo concluded “If we were to use the overlay surplus and release it, then the amount of money that we would need for our overlay in the future would be a lot higher, thereby increasing our deficit balance that we have going forward.”
“So, the argument that there is somehow, excess levy capacity there is a complete fallacy.”
Sudbury Town Manager Andy Sheehan
On using in-levy debt, Garofalo noted:
“With regards to the unused levy, we do not have an unused levy.” He added “So there is no unused levy capacity. I think the email also says that we should be able to fund this within the levy capacity, and as we’ve indicated to you, that is not possible.”
Town Manager Andy Sheehan added later in the conversation:
“For your consideration with respect to available levy capacity. The school committee is meeting tonight, meeting currently, I don’t know where they are on their agenda, but they’re going to have a budget update, and they’re going to be talking about a [Fiscal Year 2027] deficit in excess of a million and a half dollars. So… If we had any levy capacity last Tuesday when I presented the financial condition to the town, we do not have any today as a result of what the superintendent and the business manager are presenting this evening. So, the argument that there is somehow, excess levy capacity there is a complete fallacy.”
On using debt to pay for the project, Garofalo noted:
“The bonding of this project, as we’ve mentioned this before, the taxpayers of today should not bear the full cost of this project for the taxpayers of the future that have full use of a 20-year roof project at the schools. So, what [the resident email is] asking for the taxpayers today to do is to front the full 100% of the project. As opposed to borrowing this, and any future taxpayers will be subject to that payment.”
On bottom-line cost to tax payers:
With regard to the bottom line cost to taxpayers if the town takes the approach recommended by the administration, Garofalo explained “The cost, we talked about this last week, is $90 per year on a $1.1M average home. But we have about $50 coming off the books from the L-S project. So the net cost is about $30 to the average taxpayer for the next 20 years.”
The full discussion can be viewed at 45:50 in the below video: