Belchertown City Hall 04.10.2023
BELCHERTOWN — After years of approving capital projects as soon as money became available, leaving critical infrastructure work piling up and deteriorating buildings waiting to be repaired, the Town of Belchertown this week adopted its first town capital planning policy.
The aim of the new directive is to coordinate investment projects in a proactive and fiscally responsible manner from the 2026 financial year, which begins on 1 July 2025.
The document approved by the Select Board on Monday calls for the creation of a new Capital Improvement Planning Committee, an advisory body that will review capital project requests and work with the board to select the capital projects to fund. The new policy also sets criteria for a capital project and deadlines for capital requests.
“This represents a significant shift in the way the city manages its finances. We now place a priority on investing in the things that keep government running,” said Select Board Chairman Edward Boscher.
The policy defines a capital project as an asset or project that has a cost of more than $20,000 and a lifespan of at least five years, such as vehicles, new construction, and major renovations to existing infrastructure. Capital equipment in the technology sector can cost between $10,000 and $20,000. All departments, including the school department, must submit capital expenditure applications for the following fiscal year by September 30 of each year.
The Capital Improvement Planning Committee reviews each request and then summarizes the information in a capital planning report, which is reviewed by the Select Board and Finance Committee. The Advisory Committee is made up of five residents with asset management knowledge in capital areas such as construction, engineering, facilities management and fleet management. This committee then prioritizes the capital requests and sends a list of capital projects to the Select Board and Finance Committee for review.
“I think I would welcome a committee to review capital requests without financial constraints,” said City Administrator Steve Williams.
“They can create an objective, needs-based priority list and present it to their Select Board and to me and the Finance Committee so that we can say, this is the amount we can afford this year.”
Applications for capital projects are reviewed based on 12 criteria, ranging from eliminating a threat to public safety, preserving existing infrastructure, stabilizing or reducing operating costs, protecting and increasing property value, replacing an old structure, complying with state and federal laws or regulations, and supporting the city’s goals and plans.
During the meeting, board members Nicole Miner and Lesa Lessard Pearson expressed concern that the committee would prioritize certain metrics and neglect projects that may not have as immediate an impact on residents’ financial health or public safety as other projects.
“I want to make sure that all of these criteria are met so that social, cultural, historical, economic and aesthetic values are not continually ignored and we do not focus on just one goal,” Pearson said.
To fund the Capital Improvement Program, the city must allocate a minimum percentage of its annual operating budget to capital expenditures. Williams told the panel he had considered allocating 1% of the city’s budget, or $550,000, but concluded that figure was too ambitious for a municipality still struggling with a structural deficit.
“It’s almost as if we need another year or two to address the structural deficit and then we can really start aggressively financing capital,” Williams said.
Instead, the Select Board has set a goal of setting aside 0.5%, or $225,000, for capital expenditures. This money for the first year would come from free cash, stabilization funds, and the operating budget. In subsequent years, the board would slowly reduce contributions from free cash and stabilization funds as the township achieves financial stabilization. Once the 0.5% goal is reached, the Select Board can raise the minimum percentage.
“In healthy communities, there is actually an ongoing debt repayment plan, sort of specifically for these types of programs,” Boscher said. “This is part of the policy that could be a game changer for the future of Belchertown: How much are we going to borrow on an ongoing basis to support capital planning?”
The Select Committee met with the Finance Committee on Tuesday evening to further discuss the plan. Both Williams and Boscher pointed out the big changes this arrangement will bring to Belchertown’s financial planning.
“We’re trying something that’s new for Belchertown. I understand that. To me, this is not a new concept,” Boscher said. “It’s a huge step forward.”
Emilee Klein can be reached at [email protected].
