Capital Expenditures

1. Capital Expenditures Typical methods for funding capital expenditures: Free Cash Debt Exclusion Capital Exclusion Debt Expense in Operating Budget Purchase from Operating Budget

2. Capital Funding Sources • Free Cash: Funds that have not been spent from previous year budgets, or funds that have come to the town undesignated (excess revenue). These funds are recommended for one time purchases or to fund extraordinary expenses such as snow/ice removal. • Debt Exclusion: Funds acquired through borrowing of money for the purchase of tangible assets. This expense is outside the 2 ½ tax limit and must be approved by town wide vote. • Capital Exclusion: Funds raised for a one time expense. This expense is outside the 2 ½ tax limit and must be approved by a town wide vote. • Debt Expense within Operating Budget: Funds acquired through borrowing and paid for within the operating budget. This is an expense within the 2 ½ tax limit. Town meeting vote approves this borrowing and payment method. This method is not recommended this year as we try to balance FY 2012 budget with existing funding. Purchasing from operating budget would cause the same effect.

3. FY 2012 Capital Funding Plan • This Fiscal Year a plan has been submitted to fund capital expenses through three methods. • Capital Exclusion • Debt Exclusion • Free Cash • Capital Exclusion for Police Vehicle and Equipment • The reason to introduce the Capital Exclusion method is to take advantage of a drop in Debt Exclusion costs for FY 2012 and FY 2013. Due to SBA funding for the Peter Fitzpatrick School, our payments in FY 2012 and FY 2013 are significantly less than previous or future years. Using the one time Capital Exclusion, we can purchase the police vehicle and equipment with very little additional expense to the tax payer. Free Cash has been used for other equipment purchases. • Debt Exclusion Decreases by $ 59,685.00 in FY 2012 • police vehicle and equipment: • $ 70,000, net additional cost on tax levy is $ 10,315 • Equals $ .01 on tax rate or about $ 3.00 for the year ($ 300,000 house assessment)

4. FY 2012 Capital Funding Plan • Debt Exclusion for: • Ambulance $ 165,000 • Highway Sanders $ 36,000 This is the method we used to fund a Fire Truck in FY 2011. Ambulance $ 165,000:first year cost $ 38,775 (principle and interest) This increases tax rate by $ .034 about $10.20 to the tax bill on a house assessed at $ 300,000, for 5 years. Sanders $ 36,000first year $ 8,460. (principle and interest) This increases the tax rate less than 1 cent or about $3.00 to the tax bill on a house assessed at $ 300,000 for 5 years

5. FY 2012 Capital Funding Plan • Use of Existing Free Cash: • Present balance: $ 861,000 (Today) • Proposed use for FY 2012 $ 200,000 • One Police Cruiser $ 35,000 • Replace Highway Doors $ 10,000 • Highway used Vehicles $ 35,000 • Cemetery Truck/Plow $ 43,000 • Trailer Demo $ 5,000 • Reserve for Snow/Ice $ 72,000