AMHERST — With the vote on a new elementary school project fast approaching, the Amherst Town Council met with the Finance Committee during its March 20 meeting to discuss and approve the order for the debt exclusion on the project.

Before jumping into discussion about the debt exclusion, Finance Director Sean Mangano explained that the wording of the order was broken up because of the complexity of the order.

“It’s a little bit more complicated than most orders, in part because the MSBA provides the language and they have to approve and factor in the grant, but it also has to factor in some prior appropriations so that we get the full cost of the school project into the wording,” he said.

Under the order, the town will be appropriating $97.5 million to construct a new elementary school on the Fort River site at 70 South East St. In order to pay for that appropriation, the town will be borrowing $92.5 million. Along with the borrowing, the project also includes $5 million to be transferred from the town’s stabilization, $700,000 in previously awarded Community Preservation Act funds and $1 million for a previously approved feasibility study, bringing the total cost of the project up to $99.2 million. The building is anticipated to have a useful life span as a school for 50 years.

“The life of the facility has to be at least as long as we borrow for,” Mangano added.

The order also notes that the School Building Committee will oversee the use of funds for the project. The final section of the order also states that the order is contingent upon the upcoming vote on a ballot question to approve the project, slated for the special town election on May 2.

During the discussion Councilor Mandi Jo Hanneke noted that she believed there was an agreement to eventually pay the $5 million taken out from stabilization back through an Eversource rebate, but it was not in the order. She also noted that she was concerned about getting that $5 million back.

“These payments that come back are a new revenue source so we don’t know for sure if there is any special treatment that comes out from the state or federal government, but if it comes through like some other revenue sources, the year we receive it would be basically some sort of miscellaneous revenue that would fall to free cash at the end of the year,” Mangano said.

Mangano added that there is no IRS guideline to say how the funding will be distributed back to the town.

“The early information sounds very promising, but until I see the IRS rules that say there’s no limit on how much you can get in a particular year, I do want to maintain a certain level of caution until we see those rules,” he said.

Mangano also said the town participated in a project scope and budget meeting with the MSBA.

“We went through all the costs of the project, what’s eligible, what’s not, so we have a very solid footing and understanding of the budget for the project,” he said.

Councilor Cathy Schoen, who also serves on the building committee, said the council could issue a statement about what the plan is for the reimbursement of that $5 million.

“It’s not in this wording, but we could as a statement of principal, say that this is what we intend to do with it,” she said.

After hearing concerns from some current and former residents, Councilor Dorothy Pam said she was hoping the project could be done in a way that is equitable and reduce amount of tax increase that would come with the override.

“I’m hearing things from people that I have not heard before. At the Amherst Women’s Club, people came up to at the flower show to say that they know people who are planning to move or have moved because they can’t afford the taxes,” she said.

Councilor Shalini Bahl-Milne said she had also heard from residents who were concerned about the tax increase.

“That’s a huge thing we’ve been hearing everywhere. Instead of focusing on the reserves as a way to bring down the property taxes, some of the things I’ve heard so far from Cathy are the grants for renewable energy, let’s focus on that. Let’s also think about the new development in town that is needed to provide more housing,” she said.

Mangano clarified that on a $53 million borrowing for the debt exclusion, residents would be facing a property tax increase of $388 each year. He explained that that amount comes from a $9 increase per every $1 million spent from reserves.

Hanneke also cautioned against taking additional money out of the town’s reserves for the project after Councilor Ellisha Walker made a motion to appropriate and additional $5 million out of reserves during a prior Finance Committee meeting.

“We worked really hard to get that up to [$15 million] so that in downturns, in COVID situations and in emergencies we don’t have to cut operating too much. I would be hesitant to delve into that for capital, when it’s not intended at this point for capital expenses,” she said.

Hanneke added that one of the plans for the town’s reserves is to eventually build up enough money to pay for a new fire station without borrowing more money.

“Using the reserves in this way appears to potentially be asking the voters for another debt exclusion in order to handle the capital needs in this town. I would be very hesitant to do that at this point,” she said.

After concerns were raised about other projects, including a new DPW building, Mangano said that wouldn’t likely happen until the end of the decade.

Councilor Ana Devlin Gauthier said she was “comfortable with the $5 million,” but said taking more could affect other projects down the line.

“The reality is that this is where we got to, and we can’t keep putting these off and we need to be able to fund these four projects. The amount allocated for this project takes us to basically the limit of our reserves with the debt exclusion, and that’s hoping we don’t hit a downturn,” she said. “It does take away from other things that we have been saving the reserves for if we pull more from that pot for the school.”

Ultimately the order was automatically referred to the Finance Committee’s March 21 meeting.

During the meeting the council approved resolutions proclaiming April Jewish American Heritage month and also proclaiming April Arbor Month.

The Amherst Town Council next met on March 27 to discuss the order again and coverage of that meeting will appear in the April 6 edition of The Reminder.