Q & A
Minimal Tax Impact
Since the inception of the Tax Cap formula nearly a decade ago, one of the challenges for school districts has been to initiate new capital projects without significantly impacting the tax levy. At times it is nearly impossible to achieve this objective. However, the timing of this project will allow the Sauquoit Valley School District to undertake the work with minimal impact to the tax levy.
The tax burden or local share on our current debt for capital projects is approximately $200,000 annually. As a result of maturing debt in two years, the local share is scheduled to decrease significantly as illustrated by the blue section of the accompanying graph. Should the community approve the capital project on December 9, 2021, the green section of the graph represents the estimated local share for the new project through 2031-32. Combined with the local share of ongoing debt service of capital projects, it is expected that the local share will remain at about $200,000 per year.
One may conclude that without the new project the tax levy could be decreased in future years. However, as a majority of the project items are to address infrastructure needs or replacement of items at or near the end of their useful lives, the need for a capital project could only be delayed, not avoided.
As such, the current financial landscape makes this the right time to move forward with a capital project so as to not create swings in the tax levy.
Maximization of Financial Resources
The school district receives reimbursement from New York State for eligible expenditures of a capital project. Reimbursement is at a percentage rate established by state aid formulas. Currently our reimbursement rate is 89.1%.
QUESTIONS & ANSWERS
If we are taking good care of our buildings, why do we need a capital project?
The same wear and tear you encounter in your own home also happens to our District’s buildings and grounds. After 20+ years of repeated freezing and thawing, roofing starts to fail. After years of constant use, ventilation systems become unreliable and inefficient, and flooring that is used by hundreds of children daily just wear out. Our buildings have become outdated in other ways as well. School safety and security expectations have changed. These infrastructure needs are greater than the day-to-day maintenance our staff can provide and these are projects that the annual budget cannot support.
What’s a Building Condition Survey?
Every 5 years New York State mandates school districts perform a Building Condition Survey (BCS) to ensure that school facilities, which are subsidized by the State, are kept in optimal condition and safe working order. The BCS is an exhaustive process where all aspects of our campus and facilities are closely inspected. This inspection results in a comprehensive list of work provided to the school district to keep those facilities safe, up to code, and in optimal condition for the children who attend school. The scope of this project is almost entirely work identified by our recent Building Condition Survey.
What is Proposition #2 on the ballot - Enhance Building Aid on Energy Performance Contract?
Included in the proposition is an Energy Performance Contract (EPC). In addition to further reducing the district’s energy consumption and significant savings on utility bills, the EPC project aims to enhance the educational environment for students and staff. The community has the opportunity to vote and allow our District to receive additional state building aid if the proposition is approved.
Why do we need another capital project if we just finished one?
The most recent capital project was approved in January 2016 and completed in 2019. The district tries to do small to mid-sized projects more frequently. This provides the district with greater budget stability when managing debt, provides for more efficient use of capital reserves, and ensures projects are more manageable in terms of building logistics and regular maintenance needs. Again, the majority of the scope of the project is a result of our Building Condition Survey completed earlier this year.
