ClintonMass.com - Discussion Forums

One methodology that can be used in evaluating the costs of different projects is the “Net Present Value” approach.  This method takes into account that a dollar is worth more today than it is in the future because of inflation.  Generally if a person would not care if he or she received “X” dollars today or “Y” dollars next year (Y being more than X), it can be said that “X” and “Y” have the same “net present value”.

In evaluating the costs described in the feasibility studies using this approach and assuming an overall inflation rate of 3% in the “net present value” calculation, the total costs of the different options follow.  In this case, a higher net present value means that the option is more expensive.


Option 1 - Utilize 271 Chestnut St. (Clinton Home for the Aged) using two floors of the house for the Senior Center
Total Project cost: $3,986,955
Maintenance costs: $81,050 per year increasing at 2.5% per year for 20 years
“Net Present Value”: $5,490,234.87

Option 2 - Utilize 271 Chestnut St. (Clinton Home for the Aged) using only the first floor of the house but building a connector between the house and the carriage house and using the first floor of the carriage house as well.
Total Project cost: $2,953,625
Maintenance costs: $81,050 per year increasing at 2.5% per year for 20 years
“Net Present Value”: $4,456,904.87

Option 3 – Build a new Senior Center at 239 Chestnut St. (the old Legion Property)
Property cost: $475,000
Total Project cost: $2,186,500 (not including the $475,000 paid for the property already)
Maintenance costs: $50,500 per year increasing at 2.5% per year for 20 years
“Net Present Value”: $3,598,151.88

Option 3a – Utilize 271 Chestnut St. (Clinton Home for the Aged) Move in “as is”
Phase 1 – dining for 50 people
Total project cost: $681,436
Maintenance costs: $68,350 per year increasing at 2.5% per year for 20 years
“Net Present Value”: $1,949,161.82

Option 3b  - Utilize 271 Chestnut St. (Clinton Home for the Aged) and expand to provide dining for 100 people
Total project cost: $2,399,538
Maintenance costs: $81,050 per year increasing at 2.5% per year for 20 years
“Net Present Value”: $3,902,817.84

Assuming that the senior center would operate for 20 years under whatever option was selected; option 3a, moving into the Clinton Home “as is”, would appear to be the least expensive for the town.   If, however, the plan is to expand the Clinton Home to seat 100 people (option 3b) in the future, it would appear that the new center would be less expensive.

Not included in this analysis is any money the Clinton Home Foundation might provide for upkeep/maintenance.

John,
I agree with the approach but not with the input data.

First, the architect has significantly revised downward, the annual maintenance costs based on actual costs over the past decade or so.  The current estimates are closer to $60-65K/year, and when you consider the return from the endowment, the the annual cost to the budget is similar.

Second, the feasibility study was designed to show an apples to apples comparison of two centers with the same amenities but did not consider the existing costs for purchasing the Chestnut Street site ($475K) site or the cash grant from the foundation ($200K), nit to mention the value of the real estate equity gifted to the Town (estimated value $650K-$850K).

Third, the study did not consider the fact that the new center would be too small from the day it opened, while The Home, if expanded as described would far exceed the square footage of a new center.

Finally, the feasibility study also does not include the latest concept, which was developed in a collaborative effort with the architect, for a modest expansion and renovation of The Home to develop a function room in the rear of The Home (to seat ~70 people) with a new kitchen, expanded parking, new accessible bathrooms, and upgraded utilities.  This plan can be completed for remaining $1M and would be larger (and in my opinion more attractive) than the proposed new center.

With these factors in mind. it's clear that our proposal is as functional and easily more cost effective than building a new center.

"Four members resigned after a recent decision by the selectmen and some COA members to pursue the Clinton Home on Church Street for a senior citizens center, rather than building a new center at 239 Chestnut St."

I agree with Tom. Getting some new blood in the organization may be a good thing.

I like the idea of term limits too.