Manchester Finance Committee backs fire engine money and the Essex school, holds off on the senior center

Manchester's Finance Committee voted Thursday to support two of the four money articles headed to the Nov. 16 special town meeting, and it sent the senior center article back for a wording fix before it votes.

What happened

• The committee backed using $710,927 in free cash to finish paying for a new fire engine that is arriving about two years early, plus $300,000 already saved in the town's fire apparatus fund.
• It backed paying $192,605 from water fee collections toward the short term loan for the town's new water meters.
• It voted to recommend Manchester's share of the new Essex Elementary School, about $49.9 million after state aid, which the town's bond adviser figures would cost about $84 a year per $100,000 of assessed value once all the borrowing is in place.
• It did not vote on the senior and community center. Members objected to a draft that let grants count toward the $3 million in donations that must be raised before the town borrows. The committee was told the word "grants" will come out.
• The committee meets again Thursday, Oct. 22. The Select Board sets the final warrant Monday, Oct. 19.

Fire engine: early delivery, bigger bill now

The town ordered the engine years ago and expected to keep saving for it. Instead it is coming early, so the money is needed this winter rather than in a future budget.

Chair Sarah Mellish said the fire apparatus fund holds $300,000 and the town needs $710,927 more. The committee's recommendation is to take that from free cash, the town's certified leftover money from past years.

Free cash was just certified at $3,425,464, Mellish said. With the stabilization fund, the town has $5,195,603 in reserves. Taking out $710,927 leaves almost $4.5 million, which she said is 10.2 percent of the operating budget. The committee's goal is 8 percent, so about $957,000 would still be free for capital requests in the spring.

The fire chief, joining on Zoom, said the same truck ordered today would cost about $1.5 million to $1.6 million with a three year wait. A new engine emissions rule took effect just after the order and would have added about $30,000, he said. The town's Engine 1, a 2011 truck, has rusted frame rails and will move to reserve duty. A spare engine bought from Lynnfield for $100 will be disposed of.

Members asked whether the town can skip its yearly payment into the fire fund for a few years now that the big purchase is done. The chief said the replacement schedule can be adjusted. The committee plans to look at it during the budget season.

Water meters

The town is paying off the water meter project with a short term loan, called a bond anticipation note or BAN, before it takes out long term bonds. Customers pay a water capital fee on their bills through November 2027.

Finance Director Andrea Mainville said the town has already paid $271,000 toward the note from those fees. The committee backed a motion to pay $192,605 more from water retained earnings, where the fee money sits. The long term bond would follow after the fees are collected.

Mainville said the water meters themselves cost about $900,000, and the whole project, with installation and professional services, was about $1.1 million. The fee was set to cover the meter cost, so the balance will come from water revenue.

Senior and community center: the sticking point is one word

The draft article would let the town borrow up to $7.5 million for the center at the former Masonic building, reduced by any gifts, donations or grants. It also says nothing can be borrowed or spent until at least $3 million has been committed from those sources.

Town officials said the Select Board and the center's supporters agree the project will not go out to bid until $3 million is raised. Committee members said the draft did not say that clearly enough. Mellish said the committee had been told the $3 million would come from residents and donors, and that any grant should lower the town's borrowing on top of that, not substitute for donations.

Town Administrator Tony Barletta said the contingency was written to protect the town from borrowing more than $4.5 million, however the money came in. He said taking the word out is not a legal problem. By the end of the discussion the committee was told the word "grants" would come out before the Select Board votes on the warrant Monday. The committee put off its own vote to Oct. 22.

Other points from the discussion:

• Mellish read a debt schedule showing a 20 year bond with payments starting around $405,000 in fiscal 2029 and declining after that.
• A member said that with the purchase, interest and donations counted, the finished building would come to about $10.5 million. No one disputed the figure.
• The project's fundraising lead said the campaign has been talking with anchor donors for six months to a year and aims to reach its goal by next April. A town meeting vote is needed before the Essex County Community Foundation will open the fund that takes the donations.
• A federal grant application for $1 million to $3 million is pending.
• The current price estimate is locked through October 2027, town officials said.
• A member said the town is misusing some of its most valuable land, and questioned putting three offices at the front of the building. Town officials said the design went through the facilities review committee and public input, and moving the kitchen and offices would cost more.

Essex Elementary School: what Manchester would pay

Mellish read the numbers from the district's bond adviser. The state is expected to pay back about 21.4 percent of the $95.3 million project, about $20.8 million, leaving about $74.6 million for the two towns. The split between Manchester and Essex is set by assessed property values in the year the money is appropriated. On the 2026 values, Manchester's share after state aid is $49,947,931.

The district plans to use short term notes first. Part of the long term debt would be issued in fiscal 2030 and all of it by fiscal 2032. At that point, on a level payment schedule, Manchester's cost would be about $84 a year per $100,000 of assessed value, or $840 per $1 million.

With interest, the finance director's schedule puts Manchester's total cost at about $96 million over the life of the debt.

Vice Chair Andy Oldeman, who sits on the Essex School Building Committee, explained why the district did not pick the cheapest option. The state school building authority requires districts to study a code upgrade, a renovation and addition, and new construction. The code upgrade would not meet the state's program, so the state would not help pay for it, he said. The chosen plan was not the most expensive option studied.

One member said he was troubled by the cost. By his math, the high school built about 20 years ago cost roughly $100,000 per student, Memorial School about $170,000 per student, and the Essex school would be about $450,000 per student. Another member said two classrooms per grade is already the smallest a school can be. Oldeman said the state pays a set amount per square foot that is far below what construction actually costs here, and does not cover site work on a sloping, ledgy site.

Town officials said that if voters turn the project down, the district has 120 days to bring it back, and after that it would start the state process over. The district expects to sign its agreement with the state on Dec. 9, which locks in the reimbursement rate.

The committee voted to recommend the article.

Also discussed

• The town's PFAS water treatment project came in at about $15.5 million against $16.5 million approved, Mainville said, and harbor dredging came in at about $3.6 million against a $3.8 million budget. The culvert project goes out to bid next month, with construction waiting until next fall after federal permitting delays.
• Members asked for a look at the town's policy that debt service should not exceed 10 percent of the operating budget, and for the total debt outstanding, before the next meeting.
• Members said the town's 20 year capital plan runs about $200 million to $240 million and is climbing, and that this year's spending is not sustainable.

What was decided

• Fire engine, $710,927 from free cash: recommended.
• Fire engine, $300,000 from the fire apparatus fund: recommended.
• Water meter note, $192,605 from water retained earnings: recommended.
• Essex Elementary School, Manchester's share: recommended.
• Senior and community center, up to $7.5 million: no vote. Deferred to Oct. 22.

The clerk did not announce vote counts on the recording.

What happens next

• Monday, Oct. 19: the Select Board votes on the final warrant.
• Thursday, Oct. 22: the Finance Committee meets again and expects to vote on the senior center article.
• Monday, Nov. 16: special town meeting at Memorial School.

Where to find the records

• Finance Committee agenda, Oct. 15
• Meeting video, posted by the town
• Finance Committee page, where minutes are posted when approved

Earlier coverage: Manchester's Finance Committee takes up four town meeting money articles Thursday (Oct. 14), the preview. Manchester's share of the new Essex school would be about $50 million after state aid (Oct. 9), the joint Select Board and Finance Committee meeting.

How we did this: Cape Ann Current watched the meeting online and checked names against the agenda and the committee's roster on the town website. These are our meeting notes, not the town's minutes.