NW Lehigh renovations to result in higher taxes

SCHOOL BOARD EXPLORES FUNDING OPTIONS

SOME BOARD MEMBERS QUESTION PLAN

 

 

 

The Northwestern Lehigh school board met last night to explore possible options to fund proposed renovations to the school. The estimated cost of the renovations is $17,841,810. One possibility is to use $8,645,501 from the fund balances and borrow $9,196,309. The financial brokers explained that by borrowing $8,000,000, the district would incur costs of $680,000 in debt service per year for 15 years, or $560,000 for 20 years. If it would borrow $18,000,000 it would have debt service of $1,180,000 per year. Estimated rates are 3.25% on a 15-year bond, and 3.8 % on a 20-year bond. The school district also has $46,000,000 in previous construction debt. The bond brokers also stated that the school's credit rating has increased in the last 4 years, two positions to AA rating. There are only 53 school districts in PA with that high a rating. Spending too much of the fund balance, and I would assume too much borrowing, might lower the rate resulting in higher interest costs in the future. It was discussed that all of those options would result in significant tax increases in future years.

In the discussion period, board member Phil Toll questioned the need for the scope of the renovations, explaining that while some renovations are needed, much of the renovation is bigger and better office space for the administration and conference rooms, etc. While these additions would be nice, he questioned whether they were really needed and noted their cost contributed to a substantial part of the overall cost of the project. He also emphasized that state budget problems and other uncertainties may make such a large expenditure risky.

Board member Charlene Rauscher stated that such a large expenditure would certainly require hefty tax increases. She was answered by board member Willard Dellicker that tax increases are inevitable. Mary Ann Wright also stated that the school district did not raise taxes for 5 years and tax increases are necessary. Mrs. Rauscher thought that taxes were not inevitable if spending restraint was implemented.

Board member Todd Hernandez questioned if the school district can really afford such a large expenditure.

Board member Daryl Schafer stated that he was not part of the initial plan, but thought it needed review by the board.

Board member Joseph Fatzinger thought that a review should be done by a committee of board members as they were having problems getting all the board members together at once.

It was also revealed by Mrs. Wright that they were still looking to consider renovations at the athletic field, including artificial surface. This was separate from the above plan and would be a separate borrowing plan.

While no votes were taken, they expected to decide on a review of the priorities of the plan at the next meeting.

This is a general report of this meeting.

As a taxpayer in this district I question why this plan was sent to the architect without getting the approval of the board in a formal way for the priorities of the plan. It appears to an outside observer that this was a plan by the administration to decide what should be done without formal input by the board members. The priorities should have been voted on before a plan was drawn up. There has not been advertising of this project to the citizens. Are they planning on pushing this through without any input from the community? Everyone realizes that maintenance and repairs are always needed, just as the heating system was replaced in the last few years. There is no reason for not taking the same approach of doing needed updates as they are needed and that can often be paid for from current receipts. It seems that bigger and cushier offices and conference rooms are a luxury more than a necessity. While taxes are irrelevant to those board members and future public retirees with 6-digit public pensions, tax raises are relevant to the citizens of the district who will bear the cost.

While the administration has done a good job of cooperating with the previous board in controlling spending, it appears they now feel they are unleashed to spend as much as possible while they can.