Friday, April 16, 2010

School Building Cost and Taxpayer Impact

Estimated property tax increases for the new high school project continue to be publicized by the School Building Committee in the media as the "average" over 25 years.

Below is the latest property tax impact analysis by Longmeadow Finance Director, Paul Pasterczyk using the MSBA approved projected building costs and reimbursement information.

[click chart to enlarge]

As I have mentioned in previous posts, the frequently quoted "average property tax increase" over 25 years is not reached until the year 2027- halfway through the life of the 25 year bond. For most home owners, the first full year property tax increase (FY14) as well as the first five years property tax increases are probably more important- not the average over 25 years.

Below is a summary of key information derived from the above graphs.

[click table to enlarge]

The above table for Chart A shows that the first year (FY14) property tax increase is 29% higher and the 1st 5 year average is 22% higher than the 25 year average. Similar results are found for Chart B results.

No one knows what the final taxpayer cost will be for this project because of the uncertainty of both interest rates and project building costs. According to the MSBA approval letter, Longmeadow will be granted up to a maximum of $34 million on a total project cost of $78.5 million. If unforeseen construction costs such as unexpected asbestos removal are incurred that are larger than that included with the budgeted contingencies, it is most likely that Longmeadow would have to cover those costs without reimbursement from the MSBA.

At the School Building Public Forum on September 30, I asked Jeffrey Luxemberg of Joslin Lesser & Associates- Owners Project Manager about the impact of unforeseen cost overruns for our high school project. He indicated that such an "overrun is borne by the locality" meaning Longmeadow and that the MSBA will not provide any additional funding. Below is a short video clip of his response.

Up to now I have been a supporter of the new Longmeadow HS but during the recent FY11 budget discussions I have become increasingly concerned about our ability to afford this project without future sacrifices of important town services. You cannot separate operational and capital needs- the money to fund both types comes from the same source- the Longmeadow taxpayer. Next year, there will likely be continuing discussions to reduce or close Storrs Library and the Longmeadow Adult Center and other town services in order to meet the every increasing financial needs of our schools.

I ask every town resident to make a special effort to become better informed about the school building project by attending upcoming public forums and the special town meeting on May 25.

Also, don't forget to learn more about each of the four candidates running for the two seats on the Longmeadow Select Board. The two individuals who are elected will become key players in determining Longmeadow's future.

Mark election day- Tuesday, June 8 on your calendar.

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