EagleTribune.com, North Andover, MA

January 10, 2013

Andover's Bancroft budget gap at $5.7 million

No vote at Special Town Meeting could mean $7 million deficit

By Dustin Luca
dluca@eagletribune.com

---- — ANDOVER — Special Town Meeting voters will face raising $5.7 million to put the Bancroft Elementary School construction project back on target. If they say no, the town will ask again in April, this time for $7 million instead.

The School Building Committee finalized the budget shortfall yesterday at $5,814,029, which includes $4.3 million in bids coming in higher than expected due to cost inflation while the project was delayed by neighbors’ litigation for close to a year. The dollar amount will drop $100,000 due to remediation costs that were deemed unnecessary after the committee’s vote, according to Tom Deso, chairman of the committee.

Rejecting the measure will bring it back to voters at Annual Town Meeting in April, according to Deso. After contract bids expire on March 1 and go back out, the town’s expecting rebidding on the project to come in just north of $1 million higher than before. With other costs, the April vote would be for $6,982,029.

What remains to be seen is how the vote will be handled by the town. Officials are working with the state’s Department of Revenue to establish how much of the vote will be contingent on a fresh “exempt debt” ballot vote, assuming one is necessary.

The town took a similar vote in 2011 to fund the project on exempt debt, or borrowing paid for by raising taxes beyond Proposition 2 1/2 tax levy limits.

The DOR allows additional money raised for a project to be non-contingent, effectively allowing the prior debt exclusion vote to cover future exempt debt — but only to a certain point, according to Finance Director Donna Walsh.

Around 7 percent of a project cost increase can be covered by a non-contingent vote at Town Meeting due to construction inflation, Walsh said. The shortfall facing the school, however, far exceeds that at around 12 percent of the project’s final cost.

If a new ballot election is necessary, it will be held on Feb. 26, Deso said. Contract bids expire on March 1, so a debt exemption vote then would give officials enough time to award contracts before old bids expire.

The $5.8 million number was voted prior to test results for a presence of mercury at the existing building coming in to the board. As part of the existing building’s demolition, the committee must have the structure tested for hazardous chemicals, according to Deso.

“This is all encapsulated. Nothing is exposed,” he said. “If there are things there, then when the contractors go in to demolish the building, they have to take precautions and do special removal and special disposal to take that into account.”

Hours after the vote, test results on the toxic chemical came back negative, meaning the $5.8 million amount will be amended down to $5,714,029 before a final vote, Deso said.

The town approved the $44 million project at a Special Election in 2010 and then by ballot a month later. As design work on the project moved forward, residents living nearby appealed the project. That launched a nearly year-long delay to the project as appeals and court litigation moved forward. All litigation was settled last August, but officials knew by then that the project would then be out of touch with the $44 million appropriation.

Deso said he feels “very positive” going into Special Town Meeting that the project will be back on target by the end of February.

“I think the townspeople will understand the need for this,” he said. “The foundation is in. The concrete is in. The steel is going up. The cost of taking the building apart and reclaiming is substantial, and we still have to build a school.”