Peterborough’s fire station and municipal campus project is taking a step back, after town officials discovered that securing a bond for the project’s initially presented cost would put the town over its state-mandated debt limit.
“We have to pump the brakes on this project,” said Town Administrator Nicole MacStay. “We will not be able to bring it forward, at least not this year, and not in this form.”
The project, which was presented to the town Budget Committee and Select Board two weeks ago for their vote to recommend or not as part of the process of constructing the Town Meeting warrant, called for $23 million to build a new fire station on Elm Street. This project has been in the works since the early 2000s, and is considered a desperate need by the department, according to Fire Chief Ed Walker, due to the substandard conditions of the current fire station on Summer Street.
Now, the project will shift to a phased approach. The Budget Committee and Select Board voted Tuesday night to move forward with a revised plan, which calls for $2 million to be bonded with the intention of working through preliminary engineering, permitting and design for the project.
“Everything we need to put it in front of voters,” MacStay said. “It would get us a plan, in the end, which we really need.”
The downside of the phased approach, MacStay said, would be the fact that expenses would go up over time.
“This does, of course, have the long-term effect of costing more,” she said, due to general increases in market prices for project materials, as often happens with municipal projects, as well as the current rapid inflation that made the initial estimates for project difficult to pin down.
Additionally, MacStay said the town had hoped to lock in a good interest rate for the $23 million, something that will not be a guarantee for each portion of the project as it moves in phases.
MacStay said during the meeting that the issue with the debt limit was discovered Tuesday morning, just hours before she and Walker were set to present the project to the boards a second time after they had voted two weeks earlier to delay their vote on whether to recommend the article until they could learn more about it.
MacStay explained that the state would not allow the town to have more debt than $27 million, or 3% of the town’s total valuation. The town currently has $6 million in outstanding debt, and a $23 million bond would put it over the limit by $2 million. This issue was discovered when town officials began the process of putting together the applications necessary for the bond and did the necessary calculations.
“We have all felt that we can’t afford that number, and the State of New Hampshire is now telling us that we can’t afford this number,” said Budget Committee member Mandy Sliver.
There was some hesitation on the part of the Budget Committee, including member Rich Clark, who said, “I’m having a problem with $2 million to continue down this road.”
Walker pointed out that a similar amount was spent during the early phases of constructing the new Peterborough Town Library, and that it was money that would be spent regardless, as the project is still in such early phases and this cost was built into the previous plan.
“This would come off of whatever cost is the total cost of building,” he said.
Walker added that he felt that the town and the boards were responding to the project in negative terms, and blaming the Fire Department for “asking for too much.”
“It is not the fire chief or the Fire Department asking for this,” he said. “It is the community, having gone through very established, systematic processes to determine what the needs are for the Fire Department.”
Walker pointed to people trying to compare the department’s needs to other towns, in relation to square footage and programmatic needs, and said that although there are towns of similar size to Peterborough that have smaller stations than the plan for this one, the department does not only serve Peterborough, but in fact serves 13,000 people in 75 square miles through the ambulance service.
“We are not your typical community of 6,500 in the State of New Hampshire,” he said, adding that not many townspeople have come to the station to get a sense of the department’s needs. “It is very challenging for us, members of the community and members of the department, who have worked on this in some cases 25 years, to continually hear ‘Why do you need this? Why do you need this? Why do you need this?’ It is becoming very troubling, particularly for those folks sitting behind me and the other 60 people I work with to continue to feel like we are as public servants here being discounted.”
MacStay characterized the department’s needs as “dire,” something that Budget Committee and Select Board members agreed with as they voted to move forward.
Selectman Bill Taylor said he believed this could be a good outcome for the project in the end, as having a design on paper, something “shovel-ready,” would allow the town to more easily seek outside funding.
“I think we can look at this as a good thing,” he said. “We have a chance to take a step back, pump the brakes, take a clear look and move forward with something everyone can eat.”
These considerations would be part of the next phase of the project, as the town had not looked into funding sources before this change became necessary.
Because the request for $23 million is already on the warrant, MacStay said it would have to be amended to the $2 million figure. She said she believed this was allowed, but had not had a chance to clarify this with the town’s bond counselor, and would have to do so before the selectmen signed the final warrant. If the change is not allowed, then the article will come off the warrant entirely and the whole project will be put on hold for at least a year.
The Budget Committee and Select Board voted to recommend the rest of the town’s warrant articles, including the $13.6 million operating budget, with the exception of a petitioned article asking for $31,000 to support the Economic Development Authority’s efforts to promote the town on social media.
Once finalized, the full warrant will be posted in coming weeks and the town’s deliberative session will be held April 5.