Opinion: Finance Committee Drops the Ball on Due Diligence
Photo: Pix4Free (CC BY-SA 3.0 DEED)
This week, the Finance Committee voted to recommend that the Town take on $46 million of debt for the Jones Library demolition-expansion project. That vote’s outcome was long a foregone conclusion, divorced from sober, fiscal analysis and steeped in promises and magical thinking.
Back in April of this year, when the Town Council voted to authorize borrowing for the elementary school project, there was much wringing of hands over committing $5 million of capital reserves to lower the borrowing and therefore the tax impact on residents. Councilors reluctantly agreed only when promised that most of that money would be replenished through federal and utility rebates. An effort by Councilor Ellisha Walker to dedicate another $5 million to decrease the burden on taxpayers was not supported, with councilors exclaiming that these funds were needed to pay for a fire station.
Gone is the promise to save those (reserve) funds for the fire station. They have finally said out loud what we have long suspected – when the debt from the library project drains the capital budget, they are perfectly content to tap into the reserves to cover the shortfall, and the fire station can just keep waiting.
Fast forward to now and a vote on authorizing debt for the Jones Library project and those same councilors are singing a very different tune. For the first time at a public meeting, Council President Lynn Griesemer, Finance Committee Chair Andy Steinberg, and Town Manager Paul Bockelman this week all suggested spending those same capital reserves — that just a few months ago were not to be touched — to relieve pressure from the high cost of the library project. Gone is the promise to save those funds for the fire station. They have finally said out loud what we have long suspected – when the debt from the library project drains the capital budget, they are perfectly content to tap into the reserves to cover the shortfall, and the fire station can just keep waiting.
The Finance Committee’s role is to provide a critical and unbiased assessment of the financial impact of a council decision. Yet Griesemer originally planned a vote to authorize $46 million in debt just a week after notifying the council. Bockelman likewise advised the council to proceed without providing even the most basic analysis of its impact on the town. It was only after three Councilors (Cathy Schoen, Ellisha Walker, and Pam Rooney) requested more information that some material was provided, but even that was tainted by using the most optimistic assumptions. Other critical requests were simply ignored. Despite being asked multiple times, Bockelman still has not produced details of the impact of taking on this debt on the 5-10 year capital plan, on the immense backlog of road and sidewalk repairs, or on the timeline for replacing the DPW and fire station.
It has been clear that there is nothing the Amherst Forward-aligned Finance Committee members could learn that would lead them to vote no on anything about the library project. They didn’t want to know the downsides of moving forward with this project. They are unconcerned by funds being more than $7 million short of a cost estimate that has a very good chance of itself being well shy of actual bids. Their lack of critical questioning makes it clear that it really doesn’t matter to them how much it costs, how much risk it entails, or what impacts it would have on other town needs. They want this library project, no matter what.
Suggestions by Schoen to tighten and clarify the legal contract between the town and the Library to better protect the town were first dismissed as unnecessary. Only after repeated mentions of the weaknesses in the agreement was a motion passed to ask the Town Manager to negotiate changes and bring it back to the Town Council. It is yet to be seen what he will negotiate with the Library Trustees but the full Council vote is still on the agenda in a few days. We will soon know if the people we have elected to act in the best interest of the town will honor that responsibility, or if they will allow an overly large and expensive “want” to push essential public safety to the back of the line.
Maria Kopicki is a resident of Amherst’s District 5.
Thank you, Maria, for this lucid account of financial “thinking” that does not sound lucid, or diligent, at all. On the contrary, it seems clear that neither the finance committee nor Town Council as of yet has all the data needed to make an intelligent decision about this benighted project, and that, as to additional factors, their blinders are firmly on.
Evidently the finance committee failed to advert to Jeff Lee’s invaluable research on Massachusetts Historic Rehabilitation Tax Credits (MHRTC). Well over a million dollars in MHRTC have been part of the budget for this demolition/expansion project from the beginning. As Jeff reports elsewhere in this issue, however, “Only two library projects have received such credits in the history of the MHRTC program, and these have involved minimal disruption to historic features.” See “Library Project Fundraisers To Pay Themselves $1 Million Through 2027.” No guarantee there!
When state money is to be spent buildings that are on the State Register of Historic Places, state law mandates that the project plans be submitted to the Massachusetts Historic Commission (MHC) for historic preservation review before plans are finalized. This project, as several of us have discussed extensively, involves so much permanent destruction to the Jones Library’s irreplaceable historic features, internal and external, that the Library Trustees have evidently been afraid to submit their plans to the MHC. The Town and Trustees are thereby risking a lawsuit from the Commonwealth for breach of their $13.8 million grant contract with the Massachusetts Board of Library Commissioners (MBLC). The finance committee apparently failed to consider this, too.
The sanction for breach of Amherst’s MBLC contract would ordinarily be to receive no additional grant funding, and to return the millions of dollars in grant funds that Amherst has already received — with interest. If that wrecking ball has already demolished the Library’s brick 1993 addition, Amherst will be in a world of hurt. There’s an awful lot of pie in this sky. From both its appointed and elected officials, Amherst deserves better.