MAMARONECK, N.Y. — A group of community volunteers are lending their financial expertise to the school board and administration during the budget process through the Citizens Financial Advisory Committee. To help the public better understand that process, their communications committee has written a series of articles focusing on key issues facing the district, beginning with the 2 percent tax cap.
When voters go to the polls May 15 to vote on the Mamaroneck School District's recommended operating budget, they will also be asked to vote on a second proposal to issue $9.5 million in bonds to finance the district's capital plan. These two proposals are separate and can be passed or failed independently of one another.
What is the Capital Plan?
The District is required by New York law to develop a capital plan every five years. The capital plan outlines improvements and investments in the district's physical infrastructure, for example large repairs to school buildings.
The current capital plan was developed over the past two years with input from district staff, the School Board and community members. The Board engaged an independent engineering firm, LAN Associates, to inspect all district facilities and to identify needed repairs and improvements. LAN Associates' recommended improvements included $45 million in capital projects. Through a series of prioritization reviews, the School Board reduced this list to a set of the most urgent projects required to maintain the health and safety of students and employees. This reduced list of capital projects will cost $9.5 million.
Breakdown of the Capital Plan Budget (Thousands of $s):
The other category includes: roof repair ($244K); replacement of retaining walls ($715K); macadam resurfacing ($871K); step repairs ($756K); and data office improvements ($219K). Example projects per school include: repair masonry on roof (Chatsworth); rebuild auditorium steps and rebuild retaining walls (Murray Avenue); renovate data processing office for better ventilation and replace urinals (MHS).
How will this impact my tax bill?
The owner of a property with an assessed value of $20,000 (or $1 million market value) would pay $7.45 more in property taxes through the 2015-16 school year.
What interest rate does the district expect to receive?
The district has a AAA rating which results in favorable borrowing rates. From 2000 to 2006, the rate that the district received on bond issuances dropped from 5.2 percent to 4 percent. The district is anticipating receiving a rate of approximately 3.5 percent based on what similar New York districts with AAA ratings are receiving in the market today.
The district also plans to refinance older debt at a lower rate in the near future. This will result in approximately $110,000 in savings per year on interest expenses.
Why doesn’t the district pay for capital projects using its operating budget?
The recommended operating budget covers the day-today costs of running the school district. Approximately 85 percent of this budget goes towards labor costs. Capital improvements are occasionally paid for with funds from the operating budget, but the operating budget is not sufficient to cover all needed capital improvements. If the district were to pay for large capital projects out of the operating budget, it would result in high tax increases when the projects are undertaken (because the costs would have to be paid then and not spread over the life of a bond).