Opinion: Finance Committee Squanders Opportunity to Shed Light on Financial Status of Jones Building Project

On September 3, the Finance Committee finally had the library demolition/expansion project on its agenda with the promise of a financial update. What we got instead was regurgitated and incomplete “information” from the library team and avoidance of several uncomfortable truths.

What WAS presented?

The town’s Finance Director provided a document with data she said she received from the library. That document stated that $7.05 million had been “secured” by the library. However, this figure includes 

• ~$2.1 million in federal grants (from the National Endowment for the Humanities [NEH] and the Department of Housing and Urban Development [HUD]) that are very much at risk pending historical and environmental review
• ~$2 million in pledges to the community campaign (rather than received funds)
•  ~$300,000 in pledges from foundations/corporations (not received funds)

In addition, the document failed to note that 

• $1.8 million of Historic Tax Credits were twice rejected by the Massachusetts Historical Commission (in 2023 and again in 2024)
• >$400,000 in fundraising expenses have been incurred which will come out of the amount available for the project itself

The document goes on to estimate that under the library’s financial vision, ~$7 million remains to be raised for a $46.1 million project. It does not consider that the single bid received in April was for nearly $7 million more than that. The net effect is that the amount of fundraising still required is probably somewhere between $13 and $18 million. Should the project move forward and fundraising continue to falter, the responsibility for closing that gap would fall on the town.

Funding Reported to the Finance Committee Compared to Reality.

FUNDING	REPORTED	REALITY
Town of Amherst	$15,751,810	$15,751,810
Community Preservation Act (CPA) funds	$1,000,000	$1,000,000
MBLC	$13,871,314	$13,871,314
MBLC pandemic escalation increase	$1,694,158	$1,694,158
Historical Tax Credits	No report given	$0	$1.8M rejected by MA Historic Commission
Massachusetts Cultural Facilities Fund Grant	$200,000	$200,000
Massachusetts Office Travel & Tourism Grant	$50,000	$50,000
Community Campaign	$4,283,821	$2,299,742	received
Community Campaign		$1,984,079	pledged
Foundation & Corporate Funding	$406,500	$96,000	received
Foundation & Corporate Funding		$310,500	pledged
Expenses		-$430,487
HUD Economic Development Initiative Grant	$1,110,661	?	pending review
National Endowment for the Humanities Grant	$1,000,000	?	pending review
Total secured funding	$39,368,264	$34,532,537
Funding included but not yet received		$4,835,727
Need to raise for $46,139,800 Total Project Cost	$6,771,536	$11,607,263
Need to raise if bid similar to one in April 2024	$13,271,536	$18,107,263
Figures are from the Capital Campaign Report of 8/1/24 (see p.14 of this document)

What was NOT presented?

In addition to the omissions noted above, the committee also completely avoided any discussion of the “value engineering” being conducted in an attempt to bridge the ~$7M gap between the amount of currently-authorized funding and the bid received in April. 

Here is what has been happening on that front:

• The initial $2.9M in reductions have since been roughly cut in half
• Cost escalation between bidding events was estimated at around $1M
• $7M (bid in excess of budget) – $1.5M (cuts) + $1M (escalation) + $0.5M (additional designer fees) = the same $7M gap between authorized borrowing and bid

One of the arguments put forward to try bidding again was there wasn’t enough interest from general contractors, the theory being that less contractor interest translates into higher bids. But the project has actually garnered fewer applications from the industry this time around. With fewer potential general contractor bidders now than the first time, and a value engineering exercise that has not done anything to bridge the $7M gap, it is unlikely that any future bid received will improve on the previous one.

Also not discussed at the meeting is the failure of the library to meet its promised payment scheduled to the town. The library still owes the town $900,000 of the $2M it was supposed to pay by January 30, 2024. If the library has truly received more than $2.3M in donations, it should at least pay the town the $2M it said it would. The town has not (publicly) called in this marker and the library has offered no explanation for its failure to pay. Meanwhile, fundraising since April 2024 has netted an average of less than $40,000 per month, showing actual losses in two of those months. 

The Finance Committee spent a grand total of 16.5 minutes on the library building project with tens of millions of dollars on the line. This included several minutes of some members talking about how Library Trustees are elected officials and hence should not be questioned by the Finance Committee. It appeared that only one committee member (District One Councilor Cathy Schoen) had done their homework and could speak knowledgeably about the finances of the project. Neither Town Manager Paul Bockelman, nor Capital Projects Manager and Owners Project Manager Bob Peirent, nor anyone from the library team even bothered to show up. 

Not exactly a confidence-inspiring performance by the group tasked with protecting the town’s financial well-being.

Maria Kopicki is a resident of Amherst’s District 5