From the PowerPoint presentation on the Town’s website, the video tour of the Palmer and Oxford Police Stations produced by M-Pact, and the recent Springfield TV news stories, it is clear that Palmer’s current 3600 square foot police station is grossly inadequate and presents a significant liability to the Town, our public safety employees and our residents.
The question then becomes – is the proposed $7.4 million for a new facility constructed on Town-owned land behind the Town Hall the best solution, and can the Town afford it?
In 2001 voters were asked to approve a debt exclusion for a 21,864 square foot three story station designed by a different architect that was estimated to cost $6.3 million. Using Engineering News Record’s Building Cost Index, that facility would cost $9.2 million today. The current design of 22,546 square feet (15,010 SF on the main level and 6,536 SF in a partial basement) using economical wood frame and block construction with a low maintenance brick veneer, is estimated to cost $7.4 million.
The 2001 project was projected to have an impact of $1.21 per thousand dollars valuation on the tax rate in the first year of the borrowing and $0.62 per thousand in the 20th year. Depending on the interest rate we obtain, the current project will have a first year tax impact of between $0.66 and $0.74 per thousand, and a 20th year impact of between $0.36 and $0.41. This means that for every $100,000 in property valuation the 2001 project would have added $121.00 to the annual tax bill in the first year compared to $66.00 to $74.00 with the current project. Clearly the current project is more affordable.
There have been questions raised as to whether an addition to the Town Hall would be more cost effective. Due to the cost of bringing the 1964 building up to current seismic standards for a public safety building, upgrading the sprinkler and fire alarm system, adding security between the police lobby and the Town Offices and the cost of relocating the Police Department during construction, this option is estimated to cost $8,253,940 – over $800,000 more than the proposed new construction project.
Another proposal was to renovate the entire Town Hall into a Police Station. The Town Hall contains approximately 14,310 square feet. Our architect estimates that the utilization of an existing building results in a 10 to 15% reduction in program space efficiency, so the town Hall could provide between 12,400 to 13,000 SF, requiring an addition of approximately 10,000 SF resulting in a probable cost of $9.2 million. In addition we would have to find over 10,000 SF of additional space for the Town Offices which could cost in the range of $4 million exclusive of land acquisition costs for a total project cost of over $13 million.
The question has been raised as to whether there is grant funding available for the project. Unfortunately there are no Federal or State funds available for bricks and mortar for Police Stations. Both Holden and Paxton received $300,000 to $400,000 in Federal funds for assistance in upgrading communications and computer equipment for their new facilities, and if the debt exclusion question passes and the project moves forward we will apply for a similar grant.
There has also been a question asked as to why we need to exclude this debt from proposition two and a half. The legislation that created this limitation on the amount of a tax increase communities could vote each year recognized that major capital expenditures such as new buildings could not be funded within the Town’s operating budget, so it allows communities to exclude this debt from the limitations of Proposition two and a half. This is not a permanent override, and the actual amount we are allowed to add to our tax limit drops each year until the debt is paid off.
Since the money for capital projects comes from private investors purchasing tax exempt municipal bonds, the debt exclusion vote assures these investors that the municipality will have the authority and the capability to pay off these bonds regardless of the demands of the operating budget. Without this debt exclusion process municipal borrowing rates would be much higher, adding hundreds of thousands of dollars to interest costs.
If the Town’s tax base increased substantially, for example from a casino or another major commercial or industrial property coming to town, the additional tax revenue not going toward increased services could be applied to this debt thus reducing or eliminating the debt exclusion surcharge.
The $7.4 million estimate of probable cost for the project is conservative, and it is possible that in a competitive bidding atmosphere we could receive bids that are below this figure. During the past few years several municipal building projects have come in significantly lower than the architects’ estimates, but of course we cannot guarantee that this will be the case with our project. If the debt exclusion passes our plan would be to complete the construction drawings and specifications in December and advertise the project in January in order to try to obtain the most competitive bids.
I hope the voters of Palmer will give careful consideration to this much-needed project, and whether you support it or not that you will make your voice heard by voting on June 12th.
Palmer Town Manager