27 Aug CFO Jon Cartu Writes – Town’s $83 million school plan is back
CUMBERLAND – Four months after town officials expressed fear that the $83 million plan to upgrade local schools might be on hold due to concerns over the impacts of the COVID-19 pandemic, the project is full-speed ahead.
The Town Council last week gave the nod to a resolution approving the financing of the construction, renovation, improvement, alteration, repair, furnishing and equipping of schools by the issuance of not more than $83 million in borrowing, subject to approval of state housing aid of at least 50 percent.
Mayor Jeff Mutter told the council that after a “bit of a bumpy road” related to the project approved by 79 percent of town voters in 2018, the final piece of the puzzle came through in the form of a late July letter from the state indicating approval of 59 percent reimbursement, meaning that hurdle has been met.
Councilor Scott Schmitt had previously put a stipulation on the $83 million bond vote requiring at least a 50 percent reimbursement for the multi-faceted project to move forward.
Derek Osterman, director of project management services for Colliers International, told officials at an Aug. 19 meeting that the town is in great shape to get to work on various school improvement projects after the state approved nearly all of the $83 million, and work can now commence. The mission here is to use the money to modernize schools, decrease overcrowding, complete critical upgrades at the middle and high schools, develop an early childhood learning center, and complete various security upgrades and improvements to mechanical systems, among other projects, said Osterman. Cumberland is now at the beginning of “an exciting five-year project” to modernize its schools, he told the council.
Supt. Bob Mitchell said officials are grateful to be in this position, and Cumberland is one of a few districts able to take advantage of this opportunity sooner rather than later. He thanked the community and the council for their support of improved schools.
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In addition to needed renovation work, additions, and safety upgrades, the hot topic of ventilation will also be addressed, he said.
The timing of the borrowing will be scheduled to ensure that the debt service does not hit Cumberland’s budget until the town is eligible to receive its housing aid from the state. The $83 million in borrowing is actually $74.6 million to be paid back over 20 years, as the state is offering another $7.38 million in “pay-go” funds, which is essentially a grant that won’t need to be paid back.
A $33 million bond anticipation note will pay the bill over the next two years, and in fiscal year 2023, when a large number of projects are set to come off the books, bonds would be issued to pay off that money. Housing aid would become available in 2024 to offset the costs. A second bond issue is scheduled for July of 2024, with another 20 years of projected debt service for that one.
Schmitt asked how the bond will impact the tax rate over the next several years and whether the town will be able to stay within its tax increase caps.
Mutter responded that the real potential problem will come in 2025 with an expected increase in costs of $1.7 million, or 65 percent of today’s 4 percent tax levy increase. The next two years will bring combined increased spending of $950,000, then in 2024 that number goes down.
The town will have some work to do to make sure it doesn’t have a tax cap situation in 2025, said Mutter, but he’s confident that can happen. The year after 2025, costs go back down by $840,000, creating more budget room.
Mutter pointed to the overwhelming support of residents for this increased spending, though he noted that he’s not sure all of those voters knew their votes of two years ago would result in tax increases.
Councilor Bob Shaw asked about any potential changes that could impact the schedule of debt for the town, but Osterman said he’s never seen the state reverse course on previously approved projects.
Also last week, the council approved a resolution authorizing the town finance security upgrades and the purchase of computer equipment for the Cumberland School Department through a lease-purchase agreement with U.S. Bancorp Government Leasing and Financing Inc. for $832,000.
Mitchell explained that the money is going toward security improvements at the high school. One of the primary areas is the main foyer entrance, which has long needed to be reconfigured to allow for more control of people who come in and out of the building, said Mitchell, while eliminating traffic in front of the building. The front glass would be changed out for new shatterproof glass, among other improvements. The work, said Mitchell, will start soon.