AN INDY INVESTIGATION: MILLIONS OF DOLLARS APPROPRIATED FOR CAPITAL IMPROVEMENTS REMAIN UNSPENT

Millions of dollars in capital projects and equipment approved by Town Meeting remain unspent. Reports obtained by the Indy show that significant funds previously appropriated for capital improvements remain on the books. Most of the items are from Fiscal Year 2016 (FY 16) or later, although some go back as far as 2002.

Each spring, representatives from the Town Council (formerly the Select Board), Finance Committee, School Committee, and Jones Library Board of Trustees form a Joint Capital Planning Committee (JCPC) to consider capital requests from town departments and create a capital improvement plan. When the budget is approved by the legislative body, it includes the capital improvement plan that addresses buildings, facilities and equipment. This process has not typically included a detailed review of funds left over from earlier years.  

The subject of unspent capital recently arose when the School District proposed re-purposing $90,000 of funds left over from previous appropriations to purchase a new school bus. 

A review by the Indy of the capital requests for the elementary schools from FY17, FY18, and FY19 that have an open fund balance reveals more than $830,000 remaining unspent. Approximately half of this was appropriated for elementary school building maintenance and interior upgrades. Many of those budget lines show expenditures against them, indicating some work has been done but the cost may have been lower than originally appropriated or perhaps the work is not completed. Capital improvements to the Wildwood and Fort River schools have been complicated in recent years due to uncertainty over the fate of those buildings.

One example of an ‘interior upgrades’ item is from April 2017 when the elementary school district requested $50,000 to “replace carpet, paint walls, replace doors, and make major repairs throughout the year at schools, many required for health and safety of students and staff.”  According to the schools’ expenditure tracking report provided by the Finance Director on August 9, 2019, the $50,000 remains unspent.

In April 2018, $30,000 was appropriated to repair leaks in the Fort River school roof. The leaks were a topic of discussion at a Town Council meeting in April 2019 as the Council discussed applying to the state for funding to replace Fort River and Wildwood schools. As of August 9, 2019 – more than a year after these repairs were authorized by Town Meeting – no expenditures were recorded against it.

On the Town side, the general dimensions of the unspent capital appropriations and that manner in which those funds or debt obligations are structured was confirmed via email by Town Comptroller, Sonia Aldrich. The report obtained by the Indy was not final as Aldrich’s department was still processing FY19 transactions. For transactions recorded prior to August 1, 2019 however, approximately $9.6 million appropriated for capital improvements remains unspent. Some is left over from projects that came in lower than expected, for example $136,353 remains on a $500,000 appropriation for replacement of the boilers at Wildwood school, while other projects have not begun, for example the North Common and Main Street Parking Lot project. 

For larger projects, typically the Town would borrow rather than use cash capital, and would not borrow until the project begins. Of the almost $1 million in Town funds appropriated for road repairs and $100,000 for sidewalks in FY19, almost all has been spent.

In 2012, Town Meeting authorized borrowing $4 million to upgrade the Centennial Water Treatment Plant, $94,953.66 of which is remaining. The Finance Committee has not mentioned the leftover funds during their discussions about funding a re-design of that plant, currently estimated at $692,000. Re-purposing the 2012 funds could reduce the amount that would have to be borrowed in the future.

Other areas of town that have had funding allocated but no expenditures yet recorded include the Munson Library in South Amherst and the Mill River Recreation Area.

For the Munson Library, none of the ten projects listed in the capital report, with a combined cost of $183,159, show any funds spent against them. The oldest of these dates from 2002. The most expensive project, approved by Town Meeting in April 2018 was for a hall air handling unit “to improve environmental conditions for library materials and users.” (This was clarified at Town Meeting to be an air-sourced heat pump.)

Mill River Recreation Area has been allocated over $200,000 for improving the basketball, baseball, and pool facilities and, according to the Town’s expenditures report of transactions recorded prior to August 1, 2019, none of those funds have been spent.

Re-purposing unspent capital appropriations is possible, according to Aldrich, with the process starting with the Town Manager who would make a recommendation to Town Council.  The Council would then, most likely, refer the matter to the Finance Committee for its recommendation before taking any action.

The relatively large volume of unspent capital expenditures may be an under-appreciated fiscal resource as the town faces the challenge of funding four major capital projects in the near future, and highlights the importance of strong oversight by the Finance Committee, JCPC, and Town Council.