UPPER DARBY — A report on financing two major construction projects in the Upper Darby School District shows an over $3,000 cost to each homeowner spread out approximately 30 years.
This was the finding of RBC Capital Markets who presented Tuesday night the financial implications on how much it will cost to issue bonds worth $106.8 million to fund a proposed $24.3 million project to renovate and put an addition on at Aronimink Elementary School, and a proposed $65 million new middle school in Clifton Heights. About $15 million would also go toward other capital improvement projects throughout the district.
When included as part of the district’s debt services, the cumulative financial impact of the bonds on an average assessed home in the district of $75,000 would cost $3,332 through 2052. The figure includes the paying off of six bonds that have already been issued totaling $23 million through 2027.
According to RBC, bond repayment will increase from a figure of $2.7 million for 2018-19 which will increase to a stagnant level of $6.8 million from 2026-27 through 2051-52. For that 25-year window, it will add on $109 annually for the average taxpayer.
The bonds would be issued annually for differing amounts in the coming years: $6.5 million for 2019; $37.3 million for 2020 and 2021; and $25.7 million for 2022.
The bonds contour to an estimated payment schedule created by KCBA Architects who were contracted to do a costing out study for a new middle – they were later contracted on March to do schematic work on these projects for a combined cost of $3.7 million, to be paid with the yet-to-be-approved 2019 bond.
The total debt service numbers that were compiled do not take into account any other bonds or debt service that will accrue on top of the current bonds that have issued, the proposed $106.8 million bonds the district may attain, a fluctuation in interest rates over the current 1.9 percent figure from municipal market data, or even the actual building costs over/under the estimates for the projects.
The presentation by RBC Directors Michael Lillys and Dan O’Brien lasted about 10 minutes to divulge the district’s goal to minimize the annual budget and millage impact of the projects, breaking down the annual cost of bond repayment and the cost to district taxpayers in a large, but concise, spreadsheet.
“I feel positive about this,” said board member Gina Curry about the financial impact of two major school construction projects in neighborhoods she doesn’t reside. “As a taxpayer myself I was wondering and thinking about the implications.”
Board member Lee Jordan said the talking points of the presentation were good talking points and “easy for us to have.”
Board member Judy Gentile inquired about a reported claim by Clifton Heights Mayor Joe Lombardo that taxes would go up over 30 percent over the next few years to finance these projects. Gentile’s sentiments matched those concerned about senior citizens, as she is, who have a limited income.
District Chief Financial Officer Pat Grant said the district had to do its homework to see about the many financial questions that had yet to be answered since the board started entertaining action on the proposed middle school this year.
“We had to sit down and really look at what projects, of what was presented to the board over the last two months, can we bring to you as a recommendation that we feel that taxpayers of this district can afford that will be able to provide us a means to a solution to our enrollment issues,” said Grant. “We can simply build on a 1939 building and put more stories on it. It’s not going to happen. It takes time.
“Unfortunately, we didn’t have the answers in January and February. We’ve done our homework and we’re bringing it to you tonight.”
Lombardo was not present at Tuesday’s meeting, but when reached for comment Wednesday said he had not yet had the opportunity to review the finance plan drawn up by RBC. Still, he called it “a farce.”
“They might think they know, but they don’t,” he said when told of the financial figures that were used in the report. “Let’s see what this is really going to cost. They’re moving so fast, and I really want to know why. How can they pass a budget when they don’t know how much it’s going to cost?”
He said he would hold off on an official response to the report after reading a summary of the meeting and what was said in discussion.
Acting Superintendent Dan McGarry said at the meeting the district is being as transparent as possible to allow this sort of information to be released publicly, clearing the air about unverified financial claims that have been going around.
“We are showing the efforts to show how we would pay for it, what the costs would be and the impact would be as we move forward,” said McGarry. “We’re not hiding what the impact would be as we move forward on this project.
Four members of the public spoke, none of whom expressed rejection of the financial trajectory that the district may take.
Only one of those persons was from Clifton Heights, Suzanne Briddes, who had previously stated her opposition to building the new middle school in her borough. She inquired about another talked about project the district has considered – to build a new school on 69th Street, which is being deferred until the middle school and Aronimink are completed – and the prospect of getting PlanCon reimbursements.
McGarry said the district is not dependent on PlanCon. The state program that partially refunds capital improvement projects for schools has been on moratorium since 2015.
The board will initiate this funding plan at its April 9 meeting to contract services to get the initial $6.5 million bond.