Answering some questions about the proposed capital project
As the Walton Central School District continues to prepare for a vote on a proposed capital project, many questions have come in from the community regarding different facets of the project.
With that in mind, WCS wanted to answer some of these questions, which we have done below.
Despite a final decision not being made by the Board of Education, the district is still holding a community informational meeting at 6 p.m. Thursday, February 26 in the high school cafeteria. The idea of this meeting is to let the community know what is going on, as well as giving community members a chance to ask questions and give comments. Some of the information is still preliminary, but it is important to share it with the community.
One thing to note is that final touches are still being put on the project. Walton CSD is still awaiting approval from the New York State Education’s Facilities Planning Division. That includes their approval of the financial portion of this project.
The Board of Education has agreed to move ahead with preparations for the project, but it has not made the final decision on whether or not to put this out for vote in May. This won’t occur until the Board knows the finances will work. If the finances will not work, the Board of Education will not put this project out for vote.
Remember, the Board is moving forward with this for three reasons:
1. Townsend Elementary is nearly 80 years old. It needs significant upgrades to be an effective 21st century learning environment.
2. After years of attempting to fix the flooding issues at Townsend, the Board realizes it won’t be able to solve the problem by leaving the school in its current location. They can’t stop another flood from happening, and they can’t stop it from damaging the school. An upgrade to the school and working to mitigate future flooding is not cheap, and it still won’t guarantee anything if and when flooding happens again.
3. The district is in a unique position where it can fund an addition to the high school/middle school without raising taxes.
How does the local share work?
Many questions have come in asking how the existing local share (what taxpayers pay) of the debt burden can be used to fund a $20-24 million project.
Currently, the local share of the debt burden is $500,000. Some of our bonds will be paid off this year, so that we’ll only have, on average, $100,000 worth of local share left to pay in the years to come. That leaves $400,000 worth of local share that could be used to fund a new project.
So, how does $400,000 fund a project in the range of $20-24 million?
First, we get a substantial portion of the cost paid for with state aid. Second, we will issue a bond for the cost of the project. That bond will be paid off over the course of 17-20 years, with annual payments. Third, the $400,000 is not a one-time payment – it’s a continuing annual payment, just as it is with current bond payments.
That $400,000 will be paid annually for 17-20 years to pay for part of the bond, with the rest being covered by state aid. As an example, 20 annual payments of $400,000 totals $8,000,000.
That means taxes don’t go up because we would be continuing to pay bond payments that we already are paying. Those annual payments, combined with state aid, means the district can afford this project without raising additional taxes.
Please keep in mind that we still do not have final numbers from the state. We are still working with initial estimates. The final numbers will be in hand before the Board approves the project to be put out for vote. If those numbers do not work, the Board will not go forward with this project.
Why not use the money elsewhere?
Some questions have come up about using the $400,000 local share on other items, such as programs.
Keep in mind that we have two separate budgets – the General Fund, which pays our annual expenses for programs, including salaries and supplies, and the Capital Fund, which pays for capital projects.
The money that is used for capital projects can’t be used for general fund expenses. The way the new tax cap is set up, if you stop spending that local share money to pay bonds for a capital project, then the money simply goes away. It can’t be transferred.
Now, taxes could be raised in the amount of the local share if the community voted to raise those taxes by a supermajority (60 percent or higher), which would be called exceeding the tax cap. Over the past few years, several districts throughout the state have tried to exceed the tax cap, and very few of those budgets have passed, making this a risky option.
There are some community members who have asked us about giving the local share back to the taxpayers, rather than spending it on a capital project. While this sounds good in theory, the reality is that means we are ignoring the problem of what to do with Townsend Elementary. We would still have an outdated facility that is no safer in the event of a flood. And, when a flood occurs (many district residents would agree that it’s not an “if,” it’s a “when”), we will still have to pay to fix it.
That brings us to the current thought – let’s upgrade our elementary school facilities, fix the problem of flooding, and not have to raise taxes doing so. This will help turn our entire school – not just Townsend Elementary – into a 21st century learning environment and make the future of our students and children that much better.
In the end, if the Board of Education votes to move forward with this project, the voters will be the ones who make the final decision. Our goal is to give the community as much information as possible so that everybody can make an informed decision.
Posted: Wednesday, February 25, 2015