2014-12-19 / Front Page

Cape council approves project bond

By Duke Harrington
Staff Writer

CAPE ELIZABETH — The Cape Elizabeth Town Council has unanimously approved a plan to borrow $1.75 million for school repairs, but not everyone is happy about it.

A March 3 bond sale will fund five individual projects, including installation of new roofs at all three school buildings in town. Also on tap are electrical system upgrades at the high school and a new rooftop heatingrecovery unit at the middle school.

According to Michael Moore, who is chairman of the school board finance committee, the scheduled work will replace infrastructure that is at least 25 years old, and in some cases closer to 40.

“We wish we could move out roofing projects another 14 years, but unfortunately, as we’ve learned, you can’t,” he said. “There is an impact in not maintaining roofs.”

One person spoke at the town council’s Dec. 8 meeting, during a public hearing on the proposed bond, and even that person agreed the work needs to be done.

“I don’t dispute a single dollar of the $1.7 million,” said Sea View Avenue resident Bill Gross. “What I dispute is the way the school board has chosen to fund it.”

Gross, a retired telecom engineer who ran unsuccessfully for a seat on the school board in 2012 and 2013, said the town could fund the projects without borrowing, simply by re-allocating money now used for debt service as bills are paid off. The only drawback, he said, would be that work would have to be rationed, meaning it would take 14 years, by his estimate, for the school board to complete its 10- year capital improvement plan.

That plan, recently adopted after a three-year study process, calls on $14 million in maintenance and renovation work to school and community services facilities over the next decade. It anticipates $3.7 million in borrowing to pay for the recommended jobs, of which the just-approved $1.7 million is the first installment.

Gross said by borrowing that money, the town would be “wasting” nearly $800,000 in “interest to the bank” over the 20-year life of the bond. However, Town Manager Michael McGovern said the current forecast for March is an interest rate of 2.34 percent. That would cut total interest payments nearly in half, to $445,000, he said.

Gross also faulted the town council for voting to borrow the repair money on its own, without consulting voters.

In 2012, Cape residents overwhelmingly approved (4,157-1,372) a charter change that compels the council to seek public approval for any single capital expenditure that exceeds $1 million, providing the need is not driven by an emergency loss, or by federal or state mandates.

Councilors have argued the cap applies to the project, not the funding package. Thus, it is permissible, they say, to approve borrowing of more than $1 million as a single funding package for multiple unrelated capital projects.

“I don’t like the idea of a $1.7 million bond being broken into multiple projects [such] that each project is below the limit needed to ask permission from the voters,” Gross said. “I know it’s legal to do that, but I don’t like it.”

Councilor James Walsh said the $1.7 million bond passed muster with the town attorney.

“It’s in the purview of the town council to deal with this question and I think we’ve done the appropriate thing by running it by counsel,” he said. “I’m pretty convinced that we’re on sure footing as we move forward.”

“They’re really four separate projects,” McGovern agreed. “Doing electrical work in a school really has nothing to do with doing roof work. Doing heating, ventilation and air conditioning has nothing to do with [the] roof. The charter clearly says separate projects under spending, it has nothing to do with bonding. To say that the citizens somehow ought to vote on this would be a violation of the charter.”

Meanwhile, Walsh said during the school board’s capital improvement planning process, there has been ample opportunity for taxpayers to voice any concern.

“There’s been a pretty solid vetting process as to each and every one of these projects and determining whether they’re needed or not,” he said. “This has been a very transparent process.”

Putting the bond in perspective, Moore predicted it would cost the owners of a median-valued home in Cape an average of 38 cents per week.

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