Capital Planning Committee

Report of the Capital Planning Committee April / May 2008

Excerpt from the report:

To the Voters and Taxpayers of Merrimac,

The Capital Planning Committee (CPC) makes recommendations only on items that have a life duration of at least five years and an initial cost of $5,000 or more. As specified in the Town’s By-laws, our priorities for recommending capital expenditures are based on the following criteria in the order given:

  1. Necessary to respond to state or federal mandate
  2. Public health and safety consideration
  3. Operational necessity

The CPC considers the availability of funding for capital purchases/projects from four primary sources – user fee revenues, certified Free Cash, transfers from the Stabilization Fund, or borrowing for major expenditures within the Town’s debt service capacity – when applying the above criteria in making its recommendations.

This year certified Free Cash is sufficient to cover several capital items. CPC recommends that $68,000 be expended from Free Cash for capital items for Town departments and $68,500 for capital items for the Sweetsir and Donaghue school buildings. It is recommended that the remainder of Free Cash be transferred to the Stabilization Fund. The unused funds from the construction bond for the new library are recommended to be used to fund replacement of the roof at the Donaghue School. These funds can be used in this manner according to state law.

It should be noted that the Town is assuming responsibility for capital improvements at the elementary schools in accordance with the Pentucket Regional District agreement. The agreement states that member towns are responsible for costs associated with remodeling and extraordinary repair of elementary school buildings if the capital item meets the requirements for ten-year bonding.

In addition to making recommendations to Town Meeting for the upcoming fiscal year’s requests, CPC is responsible for examining departments’ capital requests for the next five years and projecting what revenues will be available to fund those purchases/ projects. The attached spreadsheets report the capital expenditures that have been voted by the Town since FY ‘03, and what the departments have requested through FY ’12.

Finally, this year CPC has placed an article on the warrant requesting that the Town By-laws governing its responsibilities be amended to raise the minimum amount for qualifying capital items to $10,000 and to otherwise update the language to reflect current circumstances.

Respectfully submitted by the Town of Merrimac Capital Planning Committee,

posted: April 26, 2008