The New Paltz Central School District will ask voters on Tuesday, March 24 to approve a $52.9 million capital improvement bond to update and repair the aging infrastructure of the schools. The proposal is the same one that was rejected by a small margin of voters last October. In the weeks that followed, in order to determine why the bond issue failed at the polls, the New Paltz Board of Education solicited feedback from the community. They arrived at the conclusion that the bond issue didn’t pass because of a lack of understanding within the community about the project, misinformation that was circulated at the last minute by anonymous sources and some apprehension about the board’s process in coming to the $52.9 million price tag. The board came back to the table in November and voted unanimously to stand by their original decision and put the same bond up for another vote on January 27. That vote had to be cancelled and rescheduled due to the anticipated severity of a snowstorm (that ended up not quite materializing), but now the rescheduled date to vote is upon us: Tuesday, March 24 from 6 a.m. to 9 p.m. at New Paltz High School, 130 South Putt Corners Road. Voting hours have been extended this time to include the early morning hours, in order to allow people to vote on their way to work.
Summary of the work
Current conditions at all four schools include antiquated infrastructure, lack of network capacity to support modern technology, health and safety concerns and inefficient or undersized facilities that interfere with the education of the students. Some of the infrastructure has already exceeded its life expectancy and some systems are so old that replacement parts to make repairs are no longer available.
Much of the work needs to be done at the middle school, including roof replacement, adding federally required handicapped accessibility and necessary upgrades to electrical, heating and ventilation systems. In developing the project, the board considered various options of consolidation that would have eliminated the need to do anything at the middle school. But in the end, and taking into consideration a report by Louis Rodriguez of The Palombo Group, the district’s construction management firm — who said the middle school is “a solid building” that could have its “useful life extended by decades” with upgrades to its systems and infrastructure — the board stayed with the current four-school model. Their position is that it is the most economical and practical solution, given that consolidation would have raised the tax levy as much as six percent higher.
A complete list of the work proposed can be found on the district website at www.newpaltz.k12.ny.us/project under the link “Project Scope of Work.”
Financials of the project, with something new
If the bond issue is passed, the project cannot exceed $52.9 million. And since the last vote, there has arisen a new opportunity to reduce the long-term financial impact on taxpayers. According to Richard Linden, assistant superintendent for business, the New Paltz district has been able to refinance approximately $9 million of existing debt, resulting in a reduction of the interest rate on that existing debt from more than four percent to approximately 1.65 percent. By taking advantage of this refinancing opportunity, all existing bonds will be paid off in four years instead of seven, saving the district $960,000 in interest costs. The board approved the refinancing on Wednesday, February 18 at their regular meeting.
The early repayment of existing debt also means the acceleration of payments on the new bond for the proposed capital project. The tax levy increase is still anticipated to be $20 per $100,000 of assessed value over the course of the bond, but the length of the repayment schedule would decrease, generating long-term savings to the taxpayer. Using a conservative 3.5 percent interest rate, said Linden, repayment could occur two years sooner than was projected in January, shortening the bond schedule from 20 years to 18 years.
This reduces the total cost of debt for the new project (principal plus interest) from $72.6 million to $70.8 million, resulting in a savings of $1.8 million in interest expenses. Although current municipal bond interest rates are significantly lower at this time, the board used a 3.5 percent interest rate in its estimates in order to be conservative. Should the interest rate ultimately be as low as the current NYSED-published 2.25 percent, the bond repayment schedule would be further decreased to 16 years, resulting in a total cost of debt for the new project (principal plus interest) to equal $63.6 million; a net additional savings of $7.2 million.
The overall financial strategy will remain the same as originally put forth last October: utilize state aid, the capital reserve and the tax levy while factoring in retiring debt. Bonds would be secured as needed at the completion of work, and during the anticipated four-year construction period, the district will cover expenses through the use of short-term, low-interest Bond Anticipation Notes (BANs). The district will wait until the conclusion of the project to issue the actual bonds when the final cost is known.
The increase of $20 annually per $100,000 of assessed home value equates to an additional one percent increase in the tax levy (over the regular operating budget in 2015-2016) that would remain unchanged until the bonds are paid off. For example, a homeowner with property assessed at $300,000 will have a net increase in their taxes for the year of $60.
What’s next if passed
If the community approves the project on March 24, design work would begin immediately in order to acquire State Education Department approvals as soon as possible. The project will be phased so students would not be relocated to another building during construction. The district estimates that the major construction would begin in the 2016-2017 school year and be completed by the 2018-2019 school year.
Anybody who voted by absentee ballot in January will need to resubmit an application and complete a new ballot. When a vote is cancelled, state law requires that sealed absentee ballots must be kept on file for 30 days and then destroyed.
Applications for an absentee ballot are available online at www.newpaltz.k12.ny.us/absentee. The application must be brought to the district clerk by Monday, March 23 to obtain the ballot, and the completed absentee ballot must be received in the district office at 1 Eugene L. Brown Drive by 5 p.m. on Tuesday, March 24. More information is available by calling the district clerk at (845) 256-4031.
Questions about the project may be directed to (845) 256-4010 or e-mailed to the Board of Education at firstname.lastname@example.org. Calls about absentee ballots may be directed to the district clerk at (845) 256-4031. More information can be found on the district website at www.newpaltz.k12.ny.us.