Westborough selectmen will continue to explore “underride” option

By Keith Regan, Contributing Writer

Westborough large web iconWestborough – The Westborough Board of Selectmen will continue to explore the option of proposing a Proposition 2- 1/2 “underride” to voters in the future, with some board members expressing concerns that the town's relatively robust $6.7 million in untaxed levy capacity could prove tempting to special interests.

A Prop 2- 1/2 underride would permanently reduce the town's overall tax levy limit, but not lower property taxes or affect town budgets in the near term. By tapping excess levy capacity, a community can boost taxes more than 2- 1/2 percent in any given year without an override vote.

Reprising and updating a presentation he first gave in 2011, Town Manager Jim Malloy laid out a number of statistics on underride and override usage around the state, noting that of the 18 underrides put to voters, 15 have passed. In seven of those communities that passed the measures, an override later was staged to restore tax levy capacity.

Locally, Upton has passed an underride, but has also had more than 20 override votes since 1983, Malloy said. Westborough, meanwhile, is one of 40 communities statewide that has never had a Proposition 2- ? operating override vote.

This year, Hopkinton is putting forth an underride proposal to remove $1.2 million in levy capacity.

Malloy said he believes Westborough's excess levy provides flexibility – a small-scale capital project could be paid off in one year, for instance, with no interest expenses – and also could help it save money when it finances long-term capital projects already under way, including the fire station and town hall renovation.

“We will meet with S&P and Moody's on our bond rating and, with the resources available and our financial management policies, we might be able to get our bond rating raised again,” he said, adding that a half-percentage point reduction in the town's borrowing rate could save it more than $2 million on $40 million in long-term borrowing.

Selectman Leigh Emery said she was “very deeply concerned” about reducing the town's tax capacity.

“I believe the excess is a good security blanket,” she added.

But Selectmen Denny Drewry and Ian Johnson – who originally raised the idea last month shortly after Town Meeting – both said they would like to see the board continue to explore the idea.

“If that capacity is not there, it becomes a lot more difficult for someone to try to grab it,” Drewry said.

Short URL: http://www.communityadvocate.com/?p=47639

Posted by on Apr 10 2014. Filed under Byline Stories, This Just In, Westborough. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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