Mike Sullivan email to Patch explains cost of two overrides


The average cost of a house in Medfield, according to the Assessor’s office is $564,400. The first full year of the debt service on a $10 million bond issue for the town garage is estimated at $900,000 ($500,000 principal and $400,000 interest) This would result in a $0.40 increase in the tax rate which would amount to an increase of $225.76 on the average home. Anyone who want to figure it on their own home can just divide their property valuation by 1,000. and multiply that amount by $0.40. For example, for a house assessed for $500,000 the tax impact would be $500,000/1,000 or 500 X $0.40 = $200. This would decrease by a small amount each successive year, because the interest payment would be decreasing and after the bonds were paid off (twenty years) it would disappear from the tax levy.

The budget operating override is estimated at $500,000. This would result in $0.22 increase in the fy12 tax rate which would amount to an increase of $124.17 on the average home($564,400). Anyone who wants to figure it on their own home can just divide their property valuation by 1,000. and multiply that amount by $0.22. For example, for a house assessed for $500,000 the tax impact would be $500,000/1,000 or 500 x $0.22 = $110. The last operating override was approved by the voters in 2008 for use in fy2009. The amount of that operating override was $850,000. There were no operating overrides voted in 2009 or 2010.  Unlike a debt exclusion override, which disappears when the bonds are paid off, an operating override becomes part of the tax levy base.

The debt service payments on existing town debt have been going down for several years and will continue to go down. At peak in fy2005 the Town’s debt annual debt service payments were $7,399,265. For next year, fy12, the Town’s annual debt service payments will be $5,685,266. This is a decrease of $1,713,999 or 23.2%.  In five more years the this figure will go down to $4,095,788, a further decrease of $1,589,478 or 21.5%, as the bonds on the library, town hall, 92 high school renovation and other capital projects are paid off. In addition, the Town has more than $20 million in School Building Assistance reimbursements and sewer betterment assessment revenues, with which to pay off this debt. As of June 30, 2011 the outstanding principal on Town debt will be $40,308,906 and the outstanding interest will be $9,718,089 for a total outstanding principal and interest of $50,026,995. Principal is being paid off at a rate of just over $4,000,000/year.   As a result, the Town is in a good position address its future capital needs.

Time to go home. Mike Sullivan

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