Financial
This article is an interactive version of the Concord School District “News About Schools” Fall 2010 Newsletter.
UPDATE: The project bids were opened on December 8th and on December 15th the Board chose Harvey Construction to build the three new elementary schools.The budget was $48,953,338. The projects final bid price including alternates was $40,742,800. This is $8,210,538 below the approved budget.
- How Will We Pay for the New Schools?
- What Will Three New Elementary Schools Cost the Concord Taxpayer?
There are three sources of funding for the three new elementary schools:
- State Building Aid
- Capital Facilities and Renovation Trust Fund
- Local Taxes
State Building Aid
The Concord School District qualifies for 40% building aid. This means the state will reimburse the district for 40% of the actual cost of the project. For the three schools estimated to cost approximately $62 million dollars, this means that the state building aid will cover approximately $26.8 million dollars of the project. State funds are paid over the life of the bond and are applied only to offset the principal cost. In addition, if the three schools meet the requirements to be “high performance” or “green” schools, the state will reimburse an additional 3%, or approximately $1.8 million, bringing the total state reimbursement to close to $28.6 million dollars.
School District’s Expendable Trust Fund for the Facility Project
The school district has paid off the bonds taken in the 1980s to renovate and expand Rundlett Middle School and is in the process of paying off the bonds taken in the 1990s to renovate and expand the high school. The district has not financed any additional project except a $1 million dollar energy conservation project in 2000 so the district’s debt has been decreasing for the past 10 years. Several years ago, the School Board, anticipating the need for major work for the elementary schools, established an the Building Renovation and Expendable Trust Fund for this purpose which now stands at
$5.1 million. These funds will be used to offset costs of the elementary schools, especially during the early years when the interest payments are the highest.
Click Here for a Graphical Chart of the Capital Facilities and Renovation Trust Fund
Local School Taxes
The owner of a property assessed at $250,000 in Concord is currently paying approximately $207.50 each year in local taxes for school debt payments. The chart below represents additional tax impact, by year, to cover the peak years of a 30 year bond before returning to the current debt payment level. The total additional tax paid during these peak years is $360 instead of $507.50 which was expected.
Additional Tax Tools and Information (30 Year Bond)
- Total Tax Impact Calculator
Comparing Expected (Plan 28a) vs Actual (Plan 29) Use this excel spreadsheet to calculate the tax impact on the assessed value of any property. You must have Microsoft Excel 2007 or Click Here for Excel 2007 Viewer. - Total Tax Impact on a $250,000 Property Over the Life of a 30 Year Bond
This document shows the tax impact comparison on a home assessed at $250,000 over the life of a 30 year bond on what was expected (Plan 28) -vs- the actual bond sale (Plan 29) - Financing Plan 29
30 Years Equal Principal with 43% Reimbursement (40% on QSCB) From State. $800K Planning BAN & $5M Construction BAN (Both due January 2011), $55 million financed December 2010; Remainder at End of Construction. QSCB issued in June 2010. $4.0 million net debt service target
School District Bond Rating Increased
These numbers are still estimates. The School Board plans to issue bonds for the projects in October to capitalize on the lowest interest rates in many years. The school district recently received a higher bond rating which will also help the Board and community get the advantageous financing at this time.
Please Note: All numbers used are forecasted based on today’s values and assumed for the life of the 30 year bond.