Finance Committee delays vote on Our Island Home technical amendment after updated guaranteed maximum price and revised funding plan

The Nantucket Finance Committee on April 10 reviewed a technical amendment to Article 13 of the annual town meeting warrant that updates the financing plan for the Our Island Home skilled nursing replacement project after a guaranteed maximum price (GMP) and subcontract bids were received.

Brian (Town staff) told the committee the updated total project cost is approximately $134,000,000. "The total project cost is $134,000,000," he said. "In Article 13, we're proposing raising $125,392,000." Brian said the technical amendment would change the funding mix to include transfers from enterprise retained earnings and a revised borrowing authorization.

Key funding details presented to the Finance Committee included a proposed $1,500,000 transfer from sewer retained earnings (to reflect employee housing moved near the sewer treatment plant) and a proposed $7,585,000 transfer from Our Island Home retained earnings to cover furniture, fixtures, equipment and potential put-option costs on two cottages. Brian said those transfers reduce the amount the town would need to authorize by borrowing to about $116,307,502 and that the borrowing would require a two-thirds vote at town meeting and a subsequent majority ballot vote.

Town staff and construction advisers said the project delivery method — construction manager at-risk with a GMP — is intended to provide price certainty. John Georgiou (Town Manager) said if the project receives approvals and contracts are executed, activity would begin quickly: "It would be September before you started to see activities happen," he said, describing permitting, submittals and preconstruction work that would start even if visible site work appears later.

Committee members probed tax impacts and annual debt-service estimates. Brian said updated estimates show an increased average annual tax impact for the typical year-round single-family home (eligible for the residential exemption) rising from about $2.81 to about $3.04 per year; he also estimated an incremental first-year increase in the town’s projected deficit of roughly $750,000 because of the altered financing structure.

Members discussed contingency allowances included in the GMP and schedule risks. Select Board member Dawn (on the call) and town staff emphasized the project contains contingency and tariff allowances; Dawn noted the construction manager-at-risk process yields firm trade pricing and reduced re-bid risk compared with earlier estimate-based delivery methods. Construction advisers said portions of the project — notably modular housing for displaced tenants — would be prefabricated offshore and barged to the island in order to limit on-island schedule risk.

Committee members also asked about alternatives and a possible plan B if voters reject the proposal. Libby (Town staff) said the town has evaluated alternatives such as on-site rebuild and smaller-house options and that none were feasible at scale; she added that the state has been monitoring the town’s remediation efforts and that, if no replacement is approved, the facility could be at risk of closure in coming years. Dawn said, "the facility is closed by 2030," summarizing state expectations discussed in the meeting.

After discussion the committee considered a motion to adopt the technical amendment but members then moved to postpone consideration to allow a fuller committee to participate. Peter moved to postpone consideration to a date certain and the committee approved a postponement; Finance Committee Chair Denise said the group will reconvene on Thursday, May 1 and specifically scheduled the island-home discussion for 3:00 p.m. that day so members who missed the April 10 meeting can participate.

Ending: The Finance Committee did not make a recommendation on Article 13 at the April 10 meeting; it deferred a final vote until a reconvened session on May 1 to allow broader committee participation and to give members more time to review the updated GMP, funding transfers and debt-service estimates.