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School Board Tells Finance-Bond Portables 20 Years For Two Year's Use



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School Board Tells Finance—

Bond Portables 20 Years For Two Year’s Use

By John Voket

To avoid massive escalation in the $114,000 annual lease rate for used modular classrooms to alleviate high school overcrowding for approximately two years, the school board and district business manager asked the Board of Finance to consider bonding more than an additional half-a-million dollars to cover installation costs.

According to school district representatives, the need to expand the stock of existing portables comes because of delays in a physical expansion of the high school, combined with an unprecedented influx of eighth graders who will become freshmen at the beginning of the 2009 school year.

After hearing about the plan near the end of a September 25 meeting, finance board Chair John Kortze asked, “Why would you bond $550,000 for 20 years if you’re only going to use [the modular classrooms] for two years?”

School business manager Ronald Bienkowski said the proposal reflects “a bondable expense for the greater good.”

“You could roll it into the high school project as contingent expenses associated with the need for swing space and general space shortage,” Mr Bienkowski said. “It’s a legitimate cost associated with the renovation.”

In any case, he said there would be no reimbursement associated with the portables’ installation or lease rates.

Mr Bienkowski said in general, the school board would present any single operating cost over the CIP threshold of $500,000 to the finance board “to see if you guys could help us out with it.”

“The $550,000 out of our operating budget is a significant amount. We never have any single projects that approach anywhere near even $100,000,” Mr Bienkowski said. “It just takes up too much of our building and site improvement budget.”

Board of Education Chair Elaine McClure jumped in when Mr Kortze pressed for the rationale behind extending bonding and debt service for 18 years beyond the temporary use of the modulars.

“John, with all due respect, I thought that we do the CIP. We don’t choose how you will look at the item and decide how to fund it, or whether you will accept it,” Ms McClure said. “We listed it in the CIP and then you decide if it will come out of the general fund...whether it comes out of A or out of B. That has nothing to do with the Board of Education.”

Board of Finance Vice Chair James Gaston responded that on both the town and school sides of the CIP, presenters normally describe where funding might come from — whether it is from bonding, grants, or the operating budget.

Mr Kortze then pointed out, “Actually, the CIP regulation states that you have to identify the funding. Did you identify bonding?”

“Well, we’ll say it now,” Mr Bienkowski said, likening the cost for bonding portables to bonding the cost of temporary road construction associated with the pending high school addition project.

More than $38.8 million has already been approved for borrowing for the proposed high school addition. Taxpayers are being asked to vote on an additional $6.045 million in a referendum October 7 to bridge the budget shortfall for the project after the lowest qualifying bid packages came in a corresponding amount over budget (see related story in today’s edition).

The $550,000 the school board is requesting for the installation of used portables, plus the annual $114,000 lease payments from the district operating budget, are in addition to the nearly $45 million being budgeted for the expansion.

Mr Bienkowski told the finance board the two-year-old modulars coming to Newtown were formally in use in the Amity School District serving Orange, Woodbridge, and Bethany. He said if the district wanted to lease brand new portables, the annual lease cost would increase from $9,500 to $55,000 per month.

“It’s considerably less expensive for us to use what’s in the market now,” Mr Bienkowski said.

Responding to a question from finance board member Joseph Kearney about buying the used temporary structures, Mr Bienkowski said each eight-classroom unit would cost about $600,000 to $700,000. He said the existing four classroom modulars in place at the high school including the installation were $87,000 on a four-year lease. An additional $50,000 for utility hook-ups to the existing portables came from the school district operating budget.

Mr Kortze then observed that the net cost to lease the two, eight-classroom portables including installation for two years would exceed Mr Bienkowski’s estimate to purchase and own one of the units and possibly reserve it for future use, if needed.

Finance board member Martin Gersten then noted that, at the business manager’s estimation, the town could acquire 24 modular classrooms for $5 million, “and own them forever, installed.”

“And we’re building 25 classrooms for $40-plus million? I understand that they’re not the same classrooms, but is that the economic reality?” Mr Gersten asked.

“As much as it makes me sick to my stomach for saying this, but there’s a big difference,” Mr Kortze said to a chorus of laughter.

Mr Bienkowski added that even site work and installation costs for the existing portables could not be compared with the incoming units because the new buildings will have to be resited, with new utility hook-ups and a pumping station to handle water use in the temporary facilities. Additional costs also include reconfiguring parking spaces in the lot to accommodate expanding the modulars’ footprint.

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