• Select Board begins review of proposed TIF agreement with Flagship Pioneering for life sciences development at 3000 River Road;
• Issues recommendations on Town Meeting warrant articles and votes to sign Annual Town Meeting Warrant; and
• Receives Presentation on the Town’s Debt Service.

ANDOVER, MA - The Andover Select Board met on Monday, March 27 in the Robb Senior Center’s Lifelong Learning Room. With the 2023 Annual Town Meeting just over a month away, review of articles remained a focus during the meeting, which also saw the Board vote to sign the Town Meeting warrant. The Board also began its review a proposed TIF agreement with a life sciences company seeking to occupy the former Philips Healthcare site, a major item set to come before Town Meeting in May.

Beyond Town Meeting-related business, the Board received a presentation on the Town’s debt service, and considered a request brought forward by the Commission on Diversity, Equity and Inclusion to recognize Indigenous People’s Day, and voted to approve a 5 percent cost of living adjustment for retirees. 

TIF Agreement

The Select Board was introduced to a proposed tax increment financing (TIF) agreement with Flagship Pioneering, a Cambridge-based life sciences company that founded Moderna, along with an extensive portfolio of over 100 other human health and sustainability companies. 

TIF agreements are agreements made between a business and host municipality through which the business is granted a tax exemption that applies to the incremental increase of assessed value of their property. Similar agreements have been used in Andover to attract major companies including Pfizer, Vicor, and Schneider Electric. 

In this case, the TIF agreement would support a proposal by Flagship to occupy and expand the former Philips Healthcare site at 3000 Minuteman Road through a plan being referred to as Project Forefront. According to representatives from the company, the plan would co-locate seven of Flagship’s companies at the site. The project would take place in phases, with construction beginning as early as 2023. Flagship anticipates making a total capital investment of $325 million over ten years to develop more than 400,000 square feet of lab, office, and manufacturing space. The plan would bring more than 600 new jobs to Andover after 10 years, according to company officials. 

Under the terms of the proposed TIF agreement, Flagship would receive incremental property tax relief of 70% annually over 20 years beginning in 2025. The total relief that Flagship is entitled to receive through the TIF is capped at $20,082,243, equal to 6% of the total investment that the company has committed to make at the site. 

Between taxes on the property’s base value, and non-exempt incremental taxes, the Town is projected to collect an estimated $55.6 million in taxes from the site over the 20 years of the agreement. Annual tax collections would increase significantly after 2044 when the exemption expires.  

According to Town Manager Andrew Flanagan, the proposal supports several priorities of the Town. The plan would incentivize investment in a largely vacant property, stimulate job growth, support long term growth of the commercial tax base, and generate revenues in the immediate term. The plan will also create private investment in the Town’s infrastructure, as the terms of the agreement call for Flagship to invest over $3.6 million in upgrades to the water distribution system, a requisite to enable their intended expansion at the site. 

Approval of the TIF agreement is slated to be considered at the 2023 Annual Town Meeting. The Select Board will continue their review of the matter on Wednesday, March 29, when they are set to meet in a joint session with the Finance Committee to consider their recommendation on the warrant article pertaining to the TIF. 

Debt Service Overview
At the request of the Board, Town Manager Andrew Flanagan made a presentation outlining the Town’s current debt service, its impact to average sing family tax bills, and the Town’s debt limit.  

As described in the presentation, all towns have a debt limit established by Chapter 44, Section 10 of Massachusetts General Law. The limit is equal to 5 percent of the full and fair cash value of property in that community. Andover’s debt limit is $510 million, of which the Town has $101 million in qualified debt outstanding, leaving a balance of $409 million in available debt capacity. Certain projects are considered outside of the debt limit, including water and sewer projects, landfill capping, and school projects built in partnership with the Massachusetts School Building Authority (MSBA). Thus, some projects that the Town incurs debt for, including the West Elementary and Shawsheen Preschool project, do not impact the debt limit. 

This factor is pertinent as the Town weighs capital investments to Andover High School. As noted by Flanagan, because the project is not funded by the MSBA, it would not be exempt, and would count against the Town’s debt capacity. While the estimated costs of the project are not yet known, they may may exceed the remaining debt capacity of the Town. Flanagan and CFO Patrick Lawlor identified this unique challenge by working with the Town’s bond counsel and that investigation prompted the Andover High School Building Committee earlier this week to withdraw a Town Meeting warrant article seeking an appropriation for schematic design. 

Andover has generally maintained a rate of debt service (i.e., payments related to principal and interest for borrowing) that is lower than other comparable communities. In 2022, debt service accounted for 6.86 percent of the Town’s budget, well below the average rate of 8.17 among other Massachusetts communities. 

Debt service accounted for 2.8 percent of the average single family tax bill in 2022. This increased to 9.6 percent due to the Town’s issuance of pension obligation bonds, which shifted the Town’s pension liability to debt service, increasing its overall indebtedness but reducing the retirement appropriation as a percentage of tax bills. A further increase will be seen in FY 2024 as authorized debt for the West Elementary and Shawsheen Preschool project moves closer to being integrated into tax bills, increasing the rate to 13 percent of the average tax bill. 

The Town’s existing debt service is comprised of exempt debt (excluded from the limited of Proposition 2 ½ by a referendum vote), which applies to large capital projects including Bancroft Elementary, Wood Hill/High Plain, and the Public Safety Center. Non-exempt debt is largely accounted for by projects funded through the Town’s Capital Improvement Plan (CIP). Pension Obligation Bond debt service is split across exempt and non-exempt debt service. 

Flanagan emphasized that the Town continues to take a measured approach in its debt usage – a strategy that has helped the Town maintain a AAA bond rating. 

Review of Warrant Articles

The Select Board voted to recommend approval of nine Town Meeting warrant articles brought forward by Town staff:

• Overlay Surplus Transfer – Provides funding for the townwide revaluation of property.
• Unpaid Bills – Authorizes payments for obligations incurred in a prior fiscal years. 
• Water Treatment Plant – Authorizes the appropriation of $300,000 for maintenance projects at the Town’s Water Treatment Plant to be paid out of the Water Enterprise Fund.
• Adoption of an Enterprise Fund For the Chandler Road Recreation Area – Establishes an enterprise fund that could be used to consolidate revenue from potential revenue-generating recreational programs being considered at the Park Property site on Chandler Road. This article does not appropriate funding for activities at the property.
• Ledge Road Landfill – Authorizes general fund borrowing to complete capping of Ledge Road Landfill. An estimated $2.5 million will be needed for the project. A more precise number will be known before Town Meeting after bids close for the project in the coming weeks.
• Lewis Street – Authorizes the taking by eminent domain of a section of Lewis Street, required for the discontinuance associated with the redevelopment of Old Town Yard.
• Zoning Bylaw Recodification – Implements a series of minor changes to the Town’s Zoning Bylaw, intended to make the document more clear, easy-to-follow, and effective in managing growth in the community.
• Town Bylaw Amendment - Stormwater Management and Erosion Control – Updates certain definitions, does not make substantive changes to the bylaw.

Four private warrant articles brought forward by petition of residents were considered by the Board. The Board voted to recommend disapproval of an article that would disallow the issuance of land use variances in Andover, and an article that would require the randomization of the order that articles appear on each Town Meeting’s warrant.

The Board voted to recommend approval of a sustainability resolution supported by Andover WECAN, a sustainability advocacy group. The resolution calls for Andover to commit to a series of actions aimed at improving the community’s sustainability, including the adoption of a Climate Action Plan. It also recommended approval of a private warrant brought by a resident of Hacienda Way, which would )a) authorize the Town’s taking of the street by eminent domain and (b) provide an appropriation to make necessary roadway repairs and improvements.  

The Select Board’s recommendations on all warrant articles will be published in the Finance Committee Report, mailed to Town residents prior to Town Meeting.

Town Meeting Warrant

The Select Board voted to sign the warrant for the 2023 Annual Town Meeting, set to begin on Monday, May 1 at 7:00 PM. The Annual Town Meeting will be held at the Collins Center for the Performing Arts at Andover High School, 100 Shawsheen Road. The warrant includes 41 articles, and can be viewed in its entirety online at andoverma.gov/townmeeting.

Other Actions

• The Board considered a request from the DEI Commission to recognize Indigenous People’s Day on the second Monday of October in place of Columbus Day. Ravi Chopra, Benjamin Hoerner, and Ismael Rodriguez presented the proposal on behalf of the Commission, citing the importance of acknowledging the history of the Pennacook People who lived in and around Andover for thousands of years prior to English settlement. The Select Board requested that the Town Manager develop a process that will allow residents to weigh in on this matter, with the goal of bringing a proposal to Town Meeting in 2024.
• The Select Board approved a 5% cost of living adjustment (COLA) for retirees for FY 2023. A special act passed by the Massachusetts Legislature in 2022 authorized local retirement boards to increase benefits for retirees by 5%, with approval required by the Retirement Board and the Select Board. The increase was previously approved by the Retirement Board in a 3-2 vote in December.

 The full meeting can be viewed online through AndoverTV.

The Select Board will meet next in a joint session with the Finance Committee to consider its recommendation on the proposed TIF agreement with Flagship Pioneering on Wednesday, March 29 at 7:30 PM.