HVRSD Explains 35 Million Dollar Referendum (Photos)

    At this week’s Hopewell Valley Regional School District (HVRSD) school board meeting, HVRSD superintendent Tom Smith went into further detail about the school board’s intention to put forth a bond referendum for public approval.

    HVRSD conducted a facilities needs assessment, in 2014, to determine the current state of the facilities and identified $60 million dollars of projects. Since 2014, the administration and the finance and facilities committee narrowed down the list of improvements that they considered immediately necessary, trimming it down to $35 million dollars.

    School districts are limited to a 2% tax levy cap to the annual budget therefore it is necessary for the District to seek public approval by vote for a bond referendum. Screen Shot 2016-02-10 at 8.59.20 PM

    At the January school board meeting, Superintendent Tom Smith explained that the timing of the referendum is driven, in part, by the need for the facility improvements and also the opportunity to take advantage of a state program in which the state will pay 40% of allowable costs associated with the proposed improvements to the buildings and grounds. Smith gave additional reasons including anticipated increase of construction costs, the retirement of District long-term debt, and satisfying District priorities.

    The need for the facilities improvements is not just about the students but is also a balancing act, explained HVRSD board president Lisa Wolff. “The school board has been planning for this referendum with long-term intentions to be responsible to students and the community by balancing the needs of student programs with the value for them,” said Wolff.

    “The board is in 100% approval of this proposal starting with the top — roofs and AC are things that need doing,” said school board member Roy Dollard. “When we got to the bottom line, the Arts and Wellness space at the high school, of 9 board members 3 took exception to it. However, as time has gone on, those objectors have decided to say ‘yes’ to the whole project approval because the District believes it would operate best with those additional components. I’ve been one of the primary objectors but even I have won myself over… I would like to add my full support of the whole thing. You’ve done a good job of explaining the need and minimizing the taxpayer impact.”

    The following slide outlines the projects and costs. “They really are not dream projects, by any means, but are necessary at this point, explained Smith.

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    The costs outlined are estimates from the District’s architect for the project, Fraytak Veisz Hopkins Duthie, P.C., based in Ewing. These are conservative worst case estimates, erring on the side of caution, explained Smith. In efforts to keep construction costs low, each project will be looked at individually with opportunities to group them in economies of scale. And, by law, the District is subject to the lowest bidding contractors (and have to pay prevailing wage).

    With regard to the specific projects, the 200,000 sq ft of new roof space will be solar eligible and can eventually be fitted for solar panels at no cost to the District, just as they did with the parking lot at the high school.

    Fire and intercom systems have seen significant improvements in technology, explained Smith, but currently the systems are set up so that if there is an emergency, an emergency announcement would need to come from the main office. With a new ditigial system, announcements can take place from anywhere in the school. Further, emergency buttons would be placed in each classroom and throughout the building. The system could also send text messages and automated phone messages to parents. And the District would be replacing fire alarms at 3 of the elementary schools and replace the intercoms at all the schools.

    “It is tough to talk about this because we do live in a wonderful environment, but it behooves us to provide the safest environment for our students and staff,” said Smith.

    Hopewell Valley Central High School (HVCHS) does not have an ADA compliant main entrance, no locking vestibule and no controlled public entrance. With the proposed changes, there would be 3 locking doorways before you enter the rest of the high school and, 2 of the 3 can be locked down during a community meeting.

    Some other changes to the high school include an Arts and Wellness space, although not eligible for the 40% state aid, is being partially supported by the PTO’s Art on the Vine fundraising efforts.

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    While the District has been working behind the scenes on this project, public involvement began in January and will be voted on publicly in September. (See two slides below provided by Smith in his January presentation.)

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    As part of the presentation at the February 8 meeting, Wolff highlighted the value of the referendum and also explained the measures taken by the District to be fiscally conservative including beneficial negotiations with bargaining units and reduced health benefit costs.

    “The District has been taking steps to be conservative with the money we have and the staff has been partnering also to do what is best for the community and our students,” said Wolff. “And the proposed financing is designed to minimize tax impact while maximizing student benefit.”

    “This is all part of the bigger puzzle as we try to move the District forward fiscally and academically,” added Smith. “I would like to remind everyone that we are in the middle of our annual budget work… currently our budgets are starting flat and looking for areas to reduce and we will make adjustments to staffing based on enrollment.”

    The District has projected the property tax impact of the bond issue in a chart provided to MercerMe and shown at their recent public meeting.  Payments from the new construction would start in 2018 and be timed, in part, to coincide with the retirement of some existing bond debt, in an effort to spread out the tax burden and keep property tax payments relatively level.

    Based on the debt payments being made each year, on money previously borrowed by the District, Hopewell Valley taxpayers pay about $100 per year for every $100,000 in property value assessed to them. (If your house was assessed at $400,000 in Hopewell Borough, $400 of your taxes this year are going towards HVRSD debt payments; a $650,000 assessment in the Township would is paying $650, etc.) Payments on the new bonds will be timed to begin as the current debt payments start to fall off, with projected net increases to taxpayers of $13 to $15 per $100,000 in assessed value in 2018, staying flat in 2019, increasing by $1 per $100,000 in 2020, and then declining starting in 2012, with dramatic decreases in 2023 when much of the District’s current debt is retired. Assuming all other taxes stay the same, in 2018 that taxpayer in Hopewell Borough with a $400,000 assessed home would pay $52 more per year than they pay now, the $650,000 house in the Township… a little less than $100 more than is paid now.

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    Mechanically, the District would be using convertible notes in the first couple of years.

    “What we’re doing here is large construction projects don’t all happen at once so we’re doing them with notes and then roll them into bonds,” said school board member and chair of the Finance and Facilities Committee,* Michael Markulec. “This chart is the worst case scenario and we’re still continuing to work with the local finance board to do even better than these numbers to minimize the impact on tax payers.”

    When asked whether the funding should be from bonds immediately, Markulec explained that while there might be overall savings, the impact to the taxpayer in years 2018, 2019 and 2020 would be significantly higher.

    Construction would begin in 2017 and be completed by September of 2018.

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    During the public comment session, members of the public primarily spoke in favor of the referendum and many individuals plead with the school board to consider also including a dedicated practice area for the high school’s wresting team, which has seen unprecedented success in recent years.

    “[Wrestling] isn’t just a sport but it teaches a lot of life lessons that apply to not only sports but also to education and further adult life,” said one local resident. “A wrestling room is desperately needed and wouldn’t just be a room for exercise but it is essentially another classroom.”

    “We have excellent coaches and the wrestlers are learning a strong work ethic in a supportive team environment,” said another member of the public.

    In response, Smith and Wolff thanked everyone for their passion about indicated that this would be taken into consideration for the facility update planning.

    The proposed referendum is set for board approval at the next HVRSD school board meeting on Monday February 22, 2016 at 7:30pm at the Administration Building, 425 S. Main Street, Pennington, NJ.

    Related links:

    *Article edited on 2/12/16 to reflect that Markulec is the chair of the F&F Committee.

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