Salem would bond $64M for school renovations
SALEM — The financial impact of the proposed high school renovation project is coming into focus as administrators and the School Board have agreed on a plan for financing the project.
Last month, the School Board approved placing an article on the March town election warrant asking to appropriate $74,745,000 for the high school project.
However, the actual amount that will be bonded for the project is closer to $64 million, as the state is picking up the tab for the $10.8 million for the renovations to the high school’s Career and Technical Education Center.
On Monday night, the School Board gave its support to Superintendent Michael Delahanty’s request to have the remainder of the project paid for with three bonds issued over three years, each bond totaling just over $21 million per year.
Each bond would be a 25-year bond, according to Delahanty. At the peak of the bond issues, the average homeowner will be paying about $330 per year toward the high school project.
However, Delahanty said that over time, there will be other bond issues that will be coming off the books, lowering the school district’s overall tax impact on the town.
The School Board agreed to move forward with paying the bonds out over 25 years rather than 30. Although the 30 year bonds could have reduced payments by about $30 per year at the height of the bond issue, paying the bonds over a shorter time frame would save the town just under $5 million in interest payments over those extra five years.
“We have talked with some local bankers who indicate we should enjoy a favorable interest rate over the next few years,” said Delahanty. “If we can successfully get the bond article passed, this is a good time to do it.”
School Board member Michael Carney said it makes sense to go with 25-year bonds rather than 30-year bonds, noting that the extra $4.8 million is a substantial figure over five years.
If the project does pass at the ballot box in March, Delahanty said the remainder of 2014 would likely consist of engineering and architectural designs for the project.
A public hearing on the high school renovation project is scheduled for Thursday, Jan. 16. Delahanty said there will also be a number of public information sessions on the project before the March vote.