USA > Massachusetts > Middlesex County > Wilmington > Town of Wilmington Annual Report 1958-1959 > Part 25
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It is the objective of a continuing Capital Improvement Budget, in tune with regular annual operational budgets and adjusted to the financial capacity of the community, to serve this important need.
The amount of money available for capital expenditures during any given year is the amount of money remaining after deducting all ordinary municipal operating expenditures from all anticipated receipts, includ- ng those anticipated receipts based upon a predetermined tax rate. This is the sum available to be spent annually to finance interest and principal payments upon borrowed monies, for cash payments for projects financed upon a pay-as-you-go basis, or a combination of both.
It follows that since there is a limit beyond which a tax rate must not go; since there is a limit to other sources of revenue; and since certain fixed charges must be met annually, there results a limit to ex- penditures which may be made for capital improvements regardless of need or desirability. Hence, an order of priority must be assigned to proposed projects.
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1
9 0
This report is an attempt to schedule projects realistically and suggest methods of financing that wil in the end best serve the over-all interests of the Town and its citizens.
Certain general observations and detailed recommendations dealing with each request for capital improvements as anticipated and submitted by each individual responsible department head, board, or commission follow:
To approach a capital improvement program for any community it is necessary to understand the community and its past, present, and future trends, for they point out the direction and pattern of its de - velopment. It is also necessary to understand the financial structure and capacity of the community for prc jects must be scheduled within the financial capacity of the community to pay.
An early conclusion arrived at from the study of Wilmington's capital needs for the next six years and beyond, together with the town's financial resources, its tax base, and rapidly expanding annual budget ary requirements, was that priority must be assigned to the construction needs of the School Department. This is unavoidable as long as Wilmington's school population continues to grow through both the influx of young families into the community and a continued relatively high birth rate.
It is apparent that to meet the unavoidable and extremely costly school construction schedule that lies ahead, other capital improvement requirements must be postponed, abandoned, or provided for by means other than bond issue. Except to meet the basic unembellished requirements for school constructio: the Town certainly should not add to its already top-heavy debt burden -- one that of necessity rather than desirability promises to increase during the next few years.
Every effort should be made to stabilize the town's debt structure and to program for the gradual re duction of its debt service costs at the earliest possible opportunity. This does not mean that existing and future demands for added facilities and improvements must not be met. It does mean that means other tha borrowing must be employed in order to accomplish their fulfillment and that of necessity their fulfillment may be less prompt than many may desire or feel necessary.
It is also apparent that the ever-increasing demands of the School Department for additional annual operational funds will exceed anticipated additional tax receipts resulting from the Town's expanding tax ba and progressively leave other departments and their vital services ever more tightly pressed for needed a propriations if excessive tax rates are to be avoided. Such has been the trend and there appears little like hood for change.
This leads to the fact that the time has arrived when it is necessary for all departments, particular ly the School Department, to make a thorough reappraisal of their present and anticipated operating pro- cedures and objectives in order to initiate savings and so preserve the financial integrity of the Town and the financial investments of its citizens.
In connection with the Town's present debt picture, including the general size of its current debt an increasingly burdensome cost of debt service charges and their drain upon the town's tax levy, it is again stressed that every possible means should be employed to reduce both the debt and annual principal and in. terest payments as soon as possible. Were it possible to eliminate borrowing to an appreciable degree an to shorten the term of borrowing on those bond issues undertaken, tremendous savings on interest costs could be effected.
One approach to this problem and one worthy of serious consideration, would be to reserve a majo: portion of any new added tax revenue from new industries locating in the Town for required capital improv ments. This would mean placing this new revenue in an accumulative stabilization fund from which more costly capital improvements might be financed in whole or in part upon a pay-as-you-go or accumulated reserve basis. Such a procedure would reduce borrowing, shorten the term of bond issues, and so save
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considerable sums otherwise required for interest charges. Considering that over a twenty-year period, with a 4% interest rate, total interest costs for a given project equal 42% of the original cost of the project, borrowing proves extremely expensive. For instance, on each $500, 000 project, interest costs equal $210, 000. £ In other words, by eliminating interest costs, for every three $500, 000 projects undertaken, the Town could save the entire cost of a fourth $500, 000 project and have $130, 000 left over as a down pay- ment on a fifth. The desirability of working towards such an end in the manner described above appears obvious.
Table I which follows lists major requirements for capital expenditures for the years ahead. It comprises those additional municipal facilities of a non-repetitious capital nature which it is estimated are beyond the town's present financial capacity to finance directly from its tax levy. It will be noted the cost of school construction totals $6, 593, 000 with only $500, 000 being tentatively listed for other municipal im- provements.
TABLE I
SCHOOLS:
1960
1961
1962
1964
1965
1966
1967 and after
Boutwell School
400,000
Land Acquisition-Schools
140,000
New Intermediate School
1,080,000
New Elementary School
432,000
New Elementary School
432,000
New Intermediate (10)
540,000
New Elementary
432,000
Intermediate
540,000
1968
New Elementary
432,000
1969
Intermediate (add)
540,000
1971
High School (add)
320,000
1973
New Elementary
320,000
1975
Intermediate (add)
540,000
1977
New Elementary
320,000
1979
OTHER:
Water Supply
125,000
New Town Hall
300,000
New Library
200,000
665,000
1,080,000
432,000
432, 000 540, 000 432, 000 3, 512 , 000
The financial impact of the above outlined program is demonstrated by Table II which shows the out - standing bonded debt upon December 31st of each year and demonstrates the anticipated growth in the town's bonded indebtedness in meeting minimum requirements in the immediate future.
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Table III which follows gives a listing of the town's annual debt service costs from 1948 through 195' and a projection of costs through 1967. A steady climb past the $500, 000 mark will be noted. While pro- jections beyond a 6 to 8 year period cannot be forecast with accuracy, from an appraisal of the school study and other anticipated town needs, there is little room for optimism and every reason for future budgetary caution and the employment of rigid financial management controls.
TABLE III
Year
Principal
Interest
Total
1948
20,500
6,401
26,901
1949
23,500
6,201
29,701
1950
32,000
9,702
41,702
1951
48,500
12,775
61,275
1952
48,500
11,665
60,165
1953
48,500
18,420
66,920
1954
81,500
24,666
106, 166
1955
84,500
23,666
108,166
1956
119,500
40,558
160,058
1957
149,500
54,288
203,788
1958
174,500
61,909
236,409
1959
259,000
87,677
346,677
1960
269,000
91,108
25
360,108
1961
315,500
102,332
275
417,832
1962
347,500
136,959
30.3
484,459
1963
363,100
143, 792
33.3
506,892
1964
358,100
132,675
36.6
490, 775
1965
364, 700
138,944
HVIL
503, 644
1966
381,700
149,203
446
530,903
1967
398,300
154, 109
49
552,409
1960
3,207,000
665,000
269,000
3,603,000
1961
3,603,000
1,080,000
315,500
4, 367,500
1962
4,367,500
432,000
347,500
4,452,000
1963
4,452,000
363,100
4,088,900
1964
4,088,900
432,000
358,100
4,162,800
1965
4, 162,800
540,000
364,700
4,338,100
1966
4,338,100
432,000
381,700
4,388,400
1967
4,338,400
398,300
3,990,100
Year
Debt Jan. 1
Borrowed
Paid
Debt Dec. 31
1950
213,000
465,000
32,000
646,000
1951
646,000
48,500
597,500
1952
597, 500
48,500
549,000
1953
549,000
572,000
48,500
1,072,500
1954
1,072,500
60,000
81,500
1,051,000
1955
1,051,000
700,000
84,500
1,666,500
1956
1,666,500
550,000
119,500
2,097,000
1957
2,097,000
175,000
149,500
2,122,500
1958
2,122,500
1,378,000
174,500
3, 326,000
1959
3,326,000
140,000
259,000
3,207,000
TABLE II
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Recommendations Based Upon Department Requests
Public Works:
This department's major request for capital outlay was presented to the Town Meeting last year and fulfilled when the town authorized a bond issue for the construction of a public works garage.
In addition to the above request, further information was sought from the department as to its pro- gramming of public works activities during the next six years. Except for street and sidewalk construction under the Betterment Act, which would be self-liquidating, the anticipated requirements of the department represent demands for nearly equal amounts each year. This fact, together with the necessity for reserving the town's borrowing capacity to meet school construction requirements, makes it advisable, if not abso- lutely necessary, for the town to fit its public works construction and improvement program into the depart- ment's annual operating budget as available funds allow. Since this has been the practice in the past, no added inconvenience will be experienced.
The dollar measurement of this department's needs for the next six years were submitted as follows:
1959
1960
1961
1962
1963
1964
Chap. 90 Const.
24,000
24,000
24,000
24,000
24,000
24,000
Chap. 81
29,000
30,000
31,000
32,000
33,000
34,000
Chap. 90 Maint.
4,500
4,500
4,500
4,500
4,500
4,500
Drainage
10,000
10,000
10,000
10,000
10,000
10,000
Sidewalk Const.
1,500
2,000
2,000
2,000
2,000
2,000
Street Const.
20,000
20,000
20,000
Equip. Replace.
8,500
18,700
26,700
21,700
9,200
9,200
New Equipment
6,500
12,800
2,500
11,000
Since Chapter 90 Construction and Maintenance and Chapter 81 are continuing programs, these items will not be considered further at this time other than to recommend that the department at this time prepare a six-year schedule of work to be undertaken under this program, street by street, and item by item. By so doing a separation will be made between those projects qualifying for this program and others that may be the sole responsibility of the town and which must be scheduled in accordance with priorities and accomp- lished within budgetary funds available from year to year. By so doing it may well be determined that many current street problems fall within the State-County Aid Program and will be met in due course during the next few years and that the department's major concern may be that of maintenance.
With reference to new equipment and replacement of equipment, a balanced program, to be financed from current appropriations, and coordinated with the requirements of the other departments, should be established.
Health Department:
The Health Department has projected the following capital needs: (1) the construction of a Health Unit at the cost of $25, 000 in 1960; (2) the development of plans for swamp drainage and mosquito control in 1960 without estimate of cost; and (3) a continuous program of swamp drainage starting in 1961 at an estimated cost equal to one dollar on the tax rate. The desirability of these projects is recognized.
Facilities proposed for the Health Unit include a meeting room with seating capacity for fifty; a business office; private conference room; and a laboratory. An overall floor area of 1, 400 sq. ft. is felt necessary.
The request for the construction of a Health Unit brings to the fore the pending necessity of consider - ing the town's requirements for a Town Hall or Municipal Center which are dealt with in this report.
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It would be most undesirable from a long-range point of view and most uneconomical and inefficient to deal with each department's requirements separately and so develop several separate small quarters for various activities rather than consolidating them under one roof. For example, a Town Hall would require a meet- ing room as would the Library and the Health Unit. Under one roof, properly designed, one such room might well serve all three purposes and reduce construction costs two-thirds on just this one item alone.
It is therefore recommended that the construction of a Health Unit be postponed at least for the pre- sent and until such time as the overall necessity for a Municipal Center is determined and consideration is given to the purposes which it will serve over the years.
With reference to the request for the development of plans for swamp drainage and mosquito control and a continuing program of drainage, it is felt that for the most part such a program is at this time beyond the financial capacity of the Town and must of necessity be postponed. It is possible that private develop- ment activities may tend to improve this situation during the years ahead. In the meantime, during the course of normal public works programs some corrective action may be possible. Moreover, considera- tion could be given to joining with other surrounding communities in the formation of a mosquito control project -- in all probability the most practical approach to this particular problem.
Water Department:
The Water Department in Wilmington is a publicly -owned utility. Like privately -owned utility com- panies, it constitutes a business and should be conducted as such without subsidies from the town's tax levy Rather, it might well be claimed that the Department's income should be such that it could and should pay to the Town for tax reduction purposes a sum equal to the tax it would pay were it privately-owned and operated.
As a utility privately owned it would be required to derive sufficient revenue to meet the following requirements:
1. Meet all operating costs
2. Meet the costs of all plant improvements and expansion
either from current income or accumulative reserves
3. Meet all bond and interest payments on existing debt and on all newly created debt where required
4. Provide a depreciation fund for plant replacement, and
5. Produce sufficient revenue to pay taxes to the Town upon
the basis of a fair assessment upon its total value.
There are other advantages to such an operation. First, the user of the service would pay in direct proportion to the benefits received while the non-user would not be required to subsidize the user. Second], the Town's tax resources would be relieved of meeting operational deficits and so produce a lower tax rate or make additional sums available for other public purposes.
It is recommended that water rates be adjusted so that receipts from this source together with betterments and other service charges would meet the all-inclusive annual operational costs of the depart- ment. This adjustment should take place forthwith in order that projects planned for the department in this report will not in the end effect the financial position of the Town. This is necessary if the Town is to mee the heavy costs of a continuing school construction program and still endeavor to maintain its competitive position, avoid excessive taxation, and make the stabilization of its financial position a possibility in the future. It is estimated that an overall increase of approximately 33% in water rates is required to accom- plish this objective.
With reference to capital needs, the Water Department has listed the following: (1) the provision of a new well field and appurtenances - $150, 000 over the two-year period 1959-1960; (2) main extensions under betterments, $30, 000 for the next six years; and (3) exploration and testing for well fields, general
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improvements to system, and replacement of inadequate mains, $100, 000 spread over the six-year period. With reference to new well field expansion, during 1959 a balance of bond issue money originally made avail- able for the construction of a standpipe was employed in this connection. Permanent financing by bond issue in 1960 for the balance of the cost, estimated at $125, 000, should follow and is so scheduled. As previously pointed out, it is recommended that the interest and principal costs for this project be met ex- clusively from increased departmental receipts.
With reference to the betterment program, it is not possible to determine future demand, and, since such projects are self-liquidating, they have not been projected in this report.
With reference to the request for the expenditure of $100, 000 over the next six years for general im- provements, it is recommended that the cost of this program be financed from the annual operating budget. It is further recommended that a listing of these projects be developed and an order of priorities be estab- lished and the program paced and carried out in accordance with the department's ability to pay from cur - rent revenues.
Fire Department:
The Fire Department has submitted as its capital needs the following: (1) the construction of a new sub-station in North Wilmington at the cost of $20, 000; and (2) a new 750 gallon pumper at a cost of $20, 000. Both projects are requested for scheduling in 1960. (Notation was made that the Department would request an increase of $28, 456 in its annual operational budget in order to maintain and man the new sub-station).
In addition to the capital requests of the Department, a list of present equipment, its age, and con- dition was obtained from the Fire Chief together with a list of what he determined necessary in the foresee- able future in order to further appraise the capital needs of the community.
The needs of the department for the next twenty years as expressed by the Fire Chief are as follows:
1 Ladder Truck
2 Brush Fire Trucks
3 Pumpers (750 gal. cap. )
1 Ambulance
Present equipment in quantity and type, as listed in the table below, meet the above requirements:
Yr. of Purchase Yr. for Replace.
Ladder Truck
1958
1978
International 750 gal. Pumper
1955
1975
Mack 750 gal. Pumper
1940
1965
Chevrolet 500 gal. Pumper
1938
1960
Brush Fire Truck
1957
1972
Brush Fire Truck
1949
1964
Ambulance
1956
1966
It is recommended that the department's requests as presented be dealt with in the following manner: Since it appears at this time that the construction of a new fire station in North Wilmington would not reduce insurance rates and so benefit property owners, it is recommended that for the time being present garaging and manning procedures be continued. It is further recommended that the 1938 Chevrolet 500 gallon Pumper be scheduled for replacement by a 750 gallon Pumper in 1960, cost to be provided from the current tax levy. It is further recommended that the 1949 Brush Fire Truck be scheduled for replacement by the same method in 1964. In the meantime, the question of constructing a new sub-station in North Wilmington should be kept in mind as a future need of the Town. However, before any definite plans are developed, consideration should be given to the fact that with the construction of a new public works garage, certain of the activities of the Water Department should be transferred to this new facility. By so doing, adequate garaging for the North Wilmington fire equipment could well be provided for by the present Water Department facilities with- out incurring costs of new construction.
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Library Department:
The Library Department, projecting a population of $15, 000 by 1964, estimates that its present faci lities should be expanded by two and one -half to three times at a cost of not less than $200, 000. In their proposed project report, 1964 has been designated as the year for action. Plans for this capital improve - ment have not progressed beyond a tentative determination of need.
It is recommended that in 1963 or 1964 a nominal sum be appropriated from the tax levy for the pur pose of employing the services of a practical library consultant experienced in the field of library operatior or that the Planning Board add the library question to its future Title VII planning studies for the purpose of determining the realistic library service requirements of the Town together with space needed. This ser- vice should not cost in excess of $1, 500 or $2, 000. The product of such a survey would be invaluable in the furtherance of plans for actual future construction.
It is further recommended that plans for the future construction of library facilities be coordinated and incorporated with plans for the new Municipal Center referred to in this report, should it be determine that the need for such a facility is a necessary capital improvement to be scheduled for the future. In any event, the scheduling of the library project must of necessity be projected beyond the year 1965.
Municipal Center:
The future need for the expansion of the facilities of the Town's municipal building has not been sub- mitted as a pending capital project. It would appear, however, that while the Town has demonstrated con- siderable ingenuity in adapting its present building to meet expanding requirements, it today falls far short of meeting reasonable standards. It is felt that the construction of a new town hall will soon become an urgent need.
The consideration of this problem is fundamental to the consideration of other requests being made at this time such as health facilities, a new library, and facilities for the Engineering Department in a new public works building. It would be unfortunate for the Town to deal with these problems piece-meal and so disperse its departments by providing numerous small separate facilities rather than consolidating them under one roof where coordination would be possible, and the scheduled use of joint facilities might elimin- ate costly duplication.
While it is not anticipated that the Town will construct a new Municipal Center within the next two 01 three years, it is a certainty that Wilmington will hopelessly outgrow its present building within a short time. Now is the proper time to consider this problem.
Without having made a study of the problem, it is felt that it would be desirable to locate the offices of all municipal departments in such a building and to incorporate into the building, or in conjunction with i the facilities of the Library.
It is recommended that serious thought and preliminary plans and estimates be developed for the project within the next two or three years in order that the Town may be prepared to act when the time comes -- and so that the Town may be in a position to act wisely upon requests for additional departmental facilities that should be located under its roof.
Planning Board:
The Planning Board has submitted the following proposed capital project: an expenditure of $5, 000 in 1960 to complete its planning program, and a contract entered into with the Massachusetts Department o Commerce whereby under Title VII an equal sum of money has been made available as a matching fund by the Federal Government. Upon the basis of past accomplishments of the Board in the planning field and the resulting benefit to the Town and its future, it is recommended that the Board's program be continued, the sum requested to be appropriated from the current tax levy. With reference to planning and development,
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no requests for capital outlay were submitted by the Urban Renewal Authority. Urban Renewal could and should play an important roll as an aid in the future development of the town. It is felt that in promoting the town's overall planning and development program that it would prove a most helpful technique if planning for urban renewal was integrated with the overall planning and development of the town and undertaken by the town's planning agency.
Park and Recreation:
In its capacity as the Town's Park Commission, the Planning Board has requested the following capi - tal projects: (1) a land-taking for Silver Lake Beach; (2) a land-taking for Fosters Pond Beach; and (3) the provision for added parking facilities at Silver Lake. No estimates or plans have been advanced for these projects. The current planning contract calls for a complete study of the future recreational needs of the Town, and this study has now been completed.
Recreation facilities are usually one of the first items eliminated from a capital budget program since there are always items that appear more urgent. From a comprehensive view, however, the attrac- tiveness of a community and the provision for various types of recreation facilities partially fulfill the ameni - ties desired by the townspeople and at the same time contribute to the maintenance of property values. Wilmington still has resources available to fulfill its recreational needs. With current development trends, these resources will not be available in the future when they will be more urgently needed than today. High land costs and intense development will eliminate the opportunity for site acquisition with natural features available. The retention by the Town of all tax title properties as specified in the "Final Community Faci - lities Study and Plan" is a necessity for effectuation of the program. It is, therefore, recommended that scheduling of the recreation projects determined desirable be established and incorporated in the Capital Budget when it is reviewed for 1961.
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