Voters in the South Colonie Central School District are asked to go to the polls on Nov. 14 to give a thumbs up or down to two proposals.
If approved, the first would allow the district to borrow $11 million to complete a multi-year project and necessary infrastructure improvements at each of the district’s schools. Phase I is done, Phase II is wrapping up and this would fund the $6.5 million Phase III and the $4.5 million Phase IV, with start dates in 2020 and 2022, respectively.
We urge you to vote in favor.
The second would allow the district to squirrel away $10 million over 10 years for “future construction projects and major purchases.” It would be funded with left over money after the district closes its books for any given year. For example, if there is a mild winter, and heating costs are $100,000 lower than anticipated, the Board of Education could put that money in the Capital Reserve Fund.
We urge you to vote against.
The first includes a well-defined plan to make much needed improvements like a new roof at Sand Creek Middle School, replace old steam boilers with more efficient models and replace the fire alarm system at Saddlewood Elementary School. There are some optional elements included like resurfacing the track at the high school and repair/upgrade the lighting and rigging systems at the Lisha Middle School auditorium. But for the students who participate in track or theater, they are far from luxury items.
Borrowing the $11 million now will not have a noticeable impact on tax rates because, if it goes as planned, the first installments will come due at a time when older debt service is getting paid off.
For example, in the 2016-17 school year the district had a debt service of $4.5 million. In 2017-18, debt service for earlier projects will reduce to $3 million and a little more than $1 million of debt service for Phases I and II will kick in.
By 2021-22, the district’s overall debt service will reduce to about $2.8 million with $1 million for previous projects, about $1.3 for Phases I and II and about $500,000 for Phases III and IV.
Debt is being paid off as fast as its getting added so the tax rate is not impacted at all. In addition, the state picks up 56.7 percent of the costs. Yes, we know, it’s still your tax dollars, but the state has a larger pool of money than those living in the South Colonie School district so you still win.
There really isn’t a downside to making what is a modest investment over a period of time for worthwhile and much needed projects. As Superintendent John Buhner said, it’s cheaper to keep up with such things rather than address them when they fall apart.
It’s the second half of the proposal that has us concerned.
Saving for capital projects rather than robotically heading to the bank and borrowing money is an admirable objective. As anyone who has a credit card knows, borrowing money is not free and those pesky interest payments are expensive.
One obvious drawback to this plan, though, is there is not a defined source of funding other than it will come from “monies not needed for current purposed and unexpended balances remaining at the end of the district’s fiscal year.”
If the district has $10 million left over after 10 years then something is wrong with how it prepares its annual budget. True, $1 million a year is a small fraction of its annual budget, which this year is $98.66 million, but it’s still, on average, $1 million a year that could and should go back to the taxpayers.
But, there is also no set plan on how to spend the money, although any expenditure will have to first need Board of Education approval and then an OK from voters at another referendum.
Those provisions in establishing the Capital Reserve Fund prevent us from calling the $10 million a slush fund, but there are better ways to go about saving and planning for capital projects than just taking what is left over at the end of the year and throwing it in a savings account.
A better plan would be to set aside a specific amount of money each year in a separate budget line item so the residents know about it, and can then make an informed decision on whether they like the idea or if they would rather see their taxes lowered by that amount.