Town Meeting Amendment Challenges Belmont Center Project Financing Plan

Special Town Meeting just got a whole lot more interesting.

Rather than the option of simply accepting or rejecting the financing plan for the $2.8 million Belmont Center Reconstruction Project, the 290 Town Meeting Members now have an alternative to the town-created “free cash” proposal.

Read the project’s highlights here

James Williams of Glenn Road and Precinct 1 submitted an amendment to the Belmont Center warrant article that will be brought before the Special Town Meeting on Monday, Nov. 17 to bond the entire $2.8 million project using a traditional sale of a bond to be paid out of the general fund.

Under the plan submitted in the article, the town proposes to finance the project in two steps; an initial downpayment from the town’s free cash account – sometimes referred to as the town’s “savings account” – of $1.3 million and then issuing a $1.5 million, 15-year bond which will be paid for over the term of the debt from free cash.

Read about the unique way the town will pay for project here.

“Free cash” is typically actual town receipts in excess of revenue estimates and unspent amounts in departmental budget line-items at the end of the fiscal year, plus the unexpended free cash from the previous year.

Last week, the state’s Department of Revenue certified Belmont’s free cash amount at $7,465,000, an increase of $1.3 million from the previous fiscal year.

For Williams and others who both support and are opposed to the project, using the town’s “savings” to finance a capital project that will benefit the residents over many years is not the proper use of the funds.

“Belmont is arguably in serious financial difficulty due in large part to actions taken or not taken by previous and current administrations,” said Williams in an email to the Belmontonian.
Pointing to areas of financial concern such as the millions owed in health care obligations to retired town employees and the lack of financing standard town amenities such as sidewalks and road, “[basically], we are living beyond our means and we are making commitments we can’t keep,” said Williams.
For Williams and others, using “free” cash would be just another example of fiscal irresponsibility by town officials.
“[T]he only responsible thing to do is to issue debt for the entire amount so the so-called “free cash” can be used for existing obligations and the center can be funded by new money,” said Williams.
“Since the Center is not a ‘must have’ project, it should be voted up or down on this point,” said Williams, who will “stand against” the project unless it was fully funded.

At a warrant briefing earlier this month which reviewed the articles on the Special Town Meeting, town officials said the current plan “strike a balance” in using town’s savings so it can bond a smaller portion of the project.

Belmont Town Administrator David Kale said if the entire project is bonded, the town would pay $320,000 in the first year, as opposed to the $168,000 in the first year under the current proposal.

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