Date: Fri 24-May-1996

Publication: Bee

Author: KAAREN

Quick Words:

council-school-projects

Full Text:

Council's Finance Panel Recommends School Projects For Town Vote

B Y K AAREN V ALENTA

Legislative Council was scheduled to vote at a special meeting at 8 pm

Thursday, May 23, in the Middle School auditorium on proposals to send the

Hawley and high school projects to a town meeting.

The special meeting, held after The Bee's deadline for this week's edition,

was expected to be the last step before the two projects, totalling $29

million, go to a town meeting in mid-June for voter approval.

Last Thursday evening the finance commitee voted 5-2 to recommended that the

projects, without any further reductions, be brought to a town meeting to let

the voters make the final decision. The finance committee's action was based

partly on the fact that voters at a town meeting on May 8 approved next year's

municipal/school budget with the debt service for these school projects

intact.

"This (amount of spending) is a huge impact on the town," said Melissa

Pilchard, council vice chairman, at the finance committee meeting. "I would be

reluctant for seven of us to turn down something which the town has more or

less approved."

"I feel the town has said `yes, we will go ahead' ortherwise the town would

have said `no' at the (May 8) town meeting," agreed Gail Halapin. "I don't

want to sacrifice quality to stay within a certain number of dollars. If we

are going to do it, we should do it right."

Pierre Rochman disagreed, saying that a lot of special interest groups show up

at town meetings. He predicted that the projects will be passed at a town

meeting, but will be petitioned to a referendum and will be voted down by the

community.

The council doesn't know yet exactly how much the Hawley School project will

cost. The project had been estimated at $3.8 million but after the bids were

received the cost escalated to $4.2 million. So last week the Board of

Education and the Public Building & Site Commission decided to reject the

Hawley School bids, make some cost-cutting changes, and rebid the project.

The high school project consisted of 17 different bid packages with a total

bottom line of $24.9 million, almost $1.5 million less than the original

estimate. But in setting next year's budget, the council told the school board

to cut $350,000 in debt service from the projects, an action which required a

$3.5 million cut in the school projects.

The Tax Impact

Last Thursday's action by the finance committee in effect would shift some of

the debt service to the 1998 budget, creating an increase in the tax rate in

both 1997 and 1998 instead of only in 1997.

According to projections by Benjamin Spragg, the town's finance director, the

net impact of the two projects on the tax rate will be 1.15 mills in 1997,

rising to 1.38 mills in 1998, and decreasing steadily afterwards over the

20-year life of the bonds. For a house assessed at $100,000, 1.15 mills is

$115 a year; for a $200,000 assessment it is $230 a year.

At its peak in 1998, the impact will be 1.38 mills for the two projects or

$138 for a property assessed at $100,000; $276 for a $200,000 assessment.

Mr Rochman and Joseph McGowan, who cast the "no" votes at the finance

committee meeting, objected to the cost of the high school project. Mr Rochman

said he believes the size of the project should be reduced; Mr McGowan said it

should be delayed a couple of years.

"It is just poor timing," Mr McGowan said. "I think the tax burden being laid

on a lot of people in this town is too great."

"Everyone thought it was terrible timing to do the sewer project 20 years ago

so we didn't do it then," said Council Chairman Joseph Mahoney. "I don't want

to make that mistake again."

Mr Mahoney said there are a lot of reasons to do all facets of the proposed

school projects now. All of the alternates included in the high school bids

are eligible for 40 percent reimbursement by the state if they are done now,

he said.

"Are the gym and the track luxuries?" he asked. "I spoke to Barbara Kasbarian

at the Park & Rec Department and she said that there are more than 1,000

children in the town's basketball program and there isn't enough gym space.

The community uses the track, too. So why not spend a little more to benefit

all of the people?"

Town's Financial Rating

The finance committee asked Mr Spragg to report on the effect that the

increased borrowing would have on the town's A-1 financial rating. Mr Spragg

said the town's current net indebtedness is $25 million. Another $35 million

will be added by borrowing for Hawley School, the high school, the Head

O'Meadow School roof, the Booth Library project and roadwork, he said, but the

town will receive $10 million in state grants to offset part of the debt.

The resulting $50 million debt will push the town to a net indebtness of 9.9

percent - 10 percent is considered high, Mr Spragg said. But within five years

the town will be back to where it is today because other bond issues will be

paid off, he said.

Mr Spragg said he does not believe a $35 million bond issue will jeopardize

the town's A-1 financial rating.

The total tax rate impact for all of the new projects (schools plus library

and roads) will be 1.66 mills in 1997 and 1.74 mills in 1998, after which the

total will decrease each year over the 20-year bond issue, he said.

The finance director's projections for the tax rate impact do not include the

cost of borrowing for the town's new sewer system, an expense that he views as

having a very small impact on the debt service in the town budget.

Although the final figures have not yet been provided by the Water Pollution

Control Authority, which is in charge of the sewer project, Mr Spragg

estimates that the town's share of the cost will be about $4 million. This

money will be borrowed at an interest rate of two percent through the state's

Clean Water Act.

The total amount of debt service for the sewers will be about $280,000 a year,

or a little less than two-tenths of a mill, Mr Spragg estimated. For a

property assessed at $100,000, 0.2 mill equates to $20 per year.

The town also will have to pay the one-time cost of hooking public buildings

into the sewer system and the cost of annual user fees for these buildings.

Mrs Pilchard pointed out that besides the sewer debt, the town will face

increases in operating budgets for the larger schools. "There's the typical

annual inflation for operating costs plus the increased physical plants and

the cost of growing enrollment," she said.

Mr Mahoney said that as long as the grand list keeps growing three to four

percent per year, the town will be in good shape.