Why the Selectmen are Asking for a Bond Now

Projects complete in one year at $500,000 savings

February 19, 2014 • Saved under Town Meeting
By Andover Board of Selectmen

1. Oil Products: Costs of oil-based products are increasing every year, as does the price of paving.

2. Road Conditions: Deferring road/bridge improvement equals more deterioration and increased project costs.

3. Paving Costs: Current practice of paving approximately one mile of road per year is the most expensive option and the least cost effective way to improve paved roads. Bundling several years of paving projects reduces mobilization charges, material costs, and reduces the cost per mile of paving between 25% and 35%.

4. Bundling Projects: Pike Industries has confirmed an estimated saving of 25% to 35% when we bundle multiple projects together.

5. Bridges: Steve Liaikos, senior DOT Bridge Engineer, the Board of Selectmen, and the Road Agent visited bridges that require replacement (Kearsarge Mountain Road, Mountain Brook on Elbow Pond Road, and Hall Farm Road) and the Gale Road bridge, which needs to be removed before collapse. No State aid is available for these projects.

6. Interest Rates: Interest rates are at an historic low, so it’s an opportune time to borrow money.

Plan A

Use a bond to complete multiple projects in a single year.

Amount raised by taxes:

  • 2014: $158,000
  • 2015: $158,000
  • 2016: $158,000
  • 2017: $158,000
  • 2018: $158,000
  • 2019: $158,000
  • 2020: $158,000

Bond paid off in seven years. Total cost: $1,106,000

Cost of Projects with Bond: $1,106,000 

  • Projects completed in one year, at 2014 prices.
  • Catch up on all the road and bridge work that has been deferred over the years.
  • Move forward with road maintenance and bridge protection.
  • No significant increase to the budget.
  • Hire an expert “clerk of the works” to bid projects, supervise, oversee project budget.
  • “Non-lapsing appropriation” (five years, or until work is done, whichever comes first).
  • In two years, put finish coat on paving projects.

Plan B

Complete the same projects, but over 10 years

Amount raised by taxes:

  • 2014 $100,000
  • 2015 $130,000
  • 2016 $150,000
  • 2017 $180,000
  • 2018 $210,000
  • etc.

Cost of Projects without Bond: $1,678,000   

  • Projects completed over the next 10 years
  • Increased scope of projects due to deterioration over time
  • Inflationary cost increases
  • Mobilization costs every year
  • No discount from bundling projects