Keeping the Public Informed about the Bond
A Message from the Assistant Superintendent for
Business
Keeping the Public Informed About the Bond
Unfortunately, there seems to be a lot of misinformation being circulated around the community about a possible future Bond Referendum that the Board of Education is currently reviewing.
It is a fallacy that if the District does not do a bond referendum, the taxpayers would see a $2 million reduction in expenditures in the 2016-17 school year. Many of these items must be done! If these projects are not done through a Bond, they will have to be included as a one-time Capital Expenditure in the Budget!
In order to help the community get a better understanding of the issues and finances surrounding these discussions, I felt the following information may be helpful.
HERE ARE THE FACTS:
The District has an obligation to the community to keep our school buildings in good condition to provide a safe, learning environment for our students. As with your home, over time upgrades, replacements and improvements need to be made to ensure our facilities do not fall into disrepair. In this proposed bond issue, the District will be looking at many needed infrastructure improvements—such things like boiler replacement, roof replacement, replacement of obsolete HVAC systems, and various upgrades and improvements. The Board will also be considering a turf field, with lights, at the Depot Street location. This will provide a safer field surface for our students to play on, allow more opportunities for our various sport teams to utilize, and provide many more use opportunities for our community athletic teams.
A good argument can be made, that most, if not all of the items the Board is currently reviewing, with the District's Administration, Architects and Engineers, are health and safety and energy efficient improvements. And yes—these items will certainly cost money—but many of these upgrades also save money by the installation of energy-efficient equipment.
As you may be aware, previous bond-issues capital projects have always been well managed. This is evident by the fact that all ‘planned projects’ were completed, and more importantly, completed under budget. These efficiencies have allowed the District to add the Sunrise Drive Cafeteria, and now in progress, the Greene Avenue Girls Bathroom and Locker facility.
The Board and Administration are always challenged with finding ways to move forward with these types of infrastructure improvements and provide the funding that will have the least amount of impact to the taxpayers. This proposed bond issue that the Board is current reviewing is no different.
The District has already established that many of these items, such as boilers, roof and HVAC system replacements must be done. The real question is how do we pay for it?
- Do we pay through a bond which spreads the costs out over 15 years, similar to the mortgage on your home,
- OR add the total project costs to the capital budget line in the annual budget which will put the entire fiscal burden on the taxpayers all in one year?
It is obvious that the most prudent fiscal way to fund these types of capital projects is through a bond issue. The district has a 68% building aid ratio. This means we get back 68 cents on every dollar of approved capital expenditures. This aid is paid back to the district over the life of the projects. Therefore, by bonding these projects we are able to align the ‘annual debt payments’ with the ‘annual building aid payments’ and have the least amount of burden placed on the taxpayers.
Another significant reason for planning early is that our existing debt service drops off in the 2016-17 school year by over $2 million. By talking about getting some of these needed infrastructure upgrades into a new bond now, when new debt service becomes due in the 2016-17 school year, it will of off-set some of the retiring debt service – thus ‘not’ adding new debt service (loan payments) above our ‘current debt service expenditure levels’.
TO REPEAT:
It IS A FALLACY that if the District does not do a bond referendum the taxpayers would see a $2 million reduction in expenditures in the 2016-17 school year. Please remember what we talked about earlier—many of these items must be done! If these projects are not done through a Bond, they will have to be included as a one-time Capital Expenditure in the Budget!
We encourage the community to come to the Board meetings and gain a better understanding of what a possible bond referendum may look like. Additional information about this potential Bond has been posted on the District’s website under the Business Office section.
Please keep in mind that the Board is currently reviewing all options. There will also be community forums to gain input from the community and well as keep you informed.
Should you have any questions, or would just like to get a better understanding of where we are in the process please feel free to give me call at 631-872-4600.
Sincerely,
John Belmonte
Assistant Superintendent
Sayville Public Schools
