The Town’s need for a capital plan was on display at the Selectboard meeting on May 27. The Town Manager reported that Norwich will likely need to borrow money to repair the box culvert on Route 132 and to replace an aging dump truck. These expenses are not covered by sufficient reserves in their respective designated funds.
Ad hoc decisions by the Selectboard on the financing of significant expenditures is not a preferred approach. Financial experts suggest instead a capital plan and budget.
It may be time for the Selectboard to act on the Finance Committee’s recommendation to create a committe that could a) assist in creating a ten-year capital plan and b) suggest financing strategies regarding that plan. The recommendation is in the Finance Committee report of January 21, 2020 in the February 12 Selectboard packet.
Dump Truck
At the Selectboard meeting last week, the Board approved the purchase of three trucks. The total amount authorized is over $160,000, which will consume much of the DPW designated fund for equipment.
DPW Director Larry Wiggins made a good case for the truck purchases.
However, he also indicated a dump truck needs replacement next year. The estimated cost for that truck is over $190,000. With inadequate funds in reserve to cover the amount, Town Manager Herb Durfee indicated an option is to borrow money to finance the new dump truck.
In her comments at the meeting, former Selectboard member Linda Cook recognized the cause for the shortfall in the designated fund. She said, “one of the great concerns I have is there no capital budget.” Then asked, “how do we get money in the designated funds to pay for what we need?”
Box culvert
I would also express a similar concern with respect to infrastructure repairs.
At last week’s meeting, the Selectboard gave a preliminary green light to replacing the box culvert that serves as a bridge on Route 132 near Bowen Hill Road. Rough cost estimate: $270,000. The matter has taken on urgency, since the May 13 Selectboard meeting. DPW Director Wiggins says “the bridge needs repair as soon as possible,” citing public safety concerns.
Town Manager Durfee recommended getting a short-term loan to complete the project sooner rather than later. What struck me about the discussion was the willingness, albeit unstated, of most of the Selectboard to incur debt to make the repair. The designated fund for bridge repairs has more than enough funds. Is there a project with first call on those funds? Selectboard member Mary Layton mentioned the bridges on Chapel Hill Road and Elm Street. But, it was not clear whether those projects had first dibs on the money.
Capital Budget
At present, the Town does not have an approved capital budget or plan. The Town Manager proposed a five-year plan in the latter part of the last budget cycle. But, it did not get a full airing. Budget season is a busy time. Not an ideal setting to discuss long range plans to purchase big ticket items or to make major improvements or repairs to infrastructure.
There is merit to to the Finance Committee suggestion that the Town establish a ten-year capital plan and develop strategies to finance that plan. The Vermont Planning Manual discusses the importance of this tool.
One of the best tools available to meet your community vision and objectives is capital planning; that is, how you use limited funds to achieve needed improvements in public facilities and infrastructure. Not all improvements can be funded right now and some may be more critical to meeting your planning goals than others.
[A capital budget] program helps municipalities select, schedule, and finance their public facility improvements. The program sets forth the capital projects to be funded each year, for a period of five or more years, and identifies the anticipated source of funding for each project. The long term capital program informs the annual capital budget. Projects listed on the capital program are likely to be implemented because funding is allocated to make it a reality. While capital planning may seem purely an accounting exercise for municipalities to manage public facilities, it is a powerful implementation tool when used to fund priority projects that move the community closer to the vision in the plan
the Vermont Planning Manual, Module 1 at 77.
A five-year or ten-year capital plan is not going to happen unless the Selectboard makes it a top priority.
I think it needs to be a top priority. This became apparent to me in reviewing the Tracy Hall geothermal project. The Town lacks a capital plan, as well as an infrastructure resiliency plan. Without such plans in place, officials and voters cannot make a reasoned judgment about wants and needs. My concern goes beyond the geothermal project. It is difficult to discuss the merits of, for instance, spending money on a sewer system or affordable housing without a capital plan in place.
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