Resident Appeals to Town Council For Cheaper SAU Building Option

During the Monday evening Town Council meeting, Londonderry resident Bob Slater presented the board with an option to fund building a new SAU School District Building that he said would be significantly less expensive than the current plan to lease space at Kitty Hawk Landing for ten years.  The district is set to begin occupying the new space this July.

Slater’s proposal calls for the school district to terminate the lease after three years and move into a new school district office that would be built on the site of the current building.  Funding for the construction of the new building would come partially from the town’s undesignated fund balance and partially from savings on lease and tax payments.

Slater estimated that savings of $1.2M would occur during years three through ten in the form of lease and property tax payments that would not need to be paid by the district.  He estimated that a new district office could be constructed for $2.5-3M.  If town funds were used to pay versus issuing a bond for it, then substantial bond interest payments could be avoided.

On May 8, Slater presented his ideas to the School Board who voted 4-1 not to investigate the idea further with the town.  While some School Board members saw merit in further investigation, they voted 4-1 not to do so because they had other priorities to deal with and did not want to invest time into the proposal at this point.  At the Council meeting Slater said, “after reviewing the minutes from that [School Board] meeting, I truly believe that some of the school board members do not have a full understanding of the potential savings for every year sooner that we end the lease, for the overall total savings, or for the fact that the town may not have the money available in the future to fund much of the construction to save on bond costs.”

The reception at the Town Council was much more positive with all four of the Councilors in attendance supporting working with the School District to further develop the idea.  Chairman John Farrell asked if the Council would support a 10-year, interest free loan of $2M to the District from the undesignated fund balance to help fund construction.  All agreed that they would; however, such a proposal would have to go on the town ballot for voter approval.

Farrell expressed hope that the School Board would reconsider their position and work with the town and Slater on the proposal.  Councilor Tom Dolan added that a drawback to the current leasing plan is that at the end of ten years the district would have to build a building or sign another lease, presumably at an even higher cost.  In response to a question from Dolan, Slater estimated that it would take 12 months to construct a building from the time the first shovel goes into the ground.

Dolan also highlighted that if Slater’s proposal came to fruition, then after ten years the cost to the district would go to zero with no lease or mortgage payments.  At that point, the savings could be reinvested in the district or passed on to taxpayers.

The lease agreement calls for annual rent starting at $123,000 escalating up to as much as $175,000 in year ten.  In addition, the district would pay between $20-27,000 in property taxes since the district office is not on town-owned land.  Finally, the agreement requires the district to pay $40,700 annually to cover the costs of fitting up the building space to meet the needs of the district.  This is a $407,000 cost with annual payments spread over ten years and must be paid in full if the lease is terminated early.  The district is also committed to pay $40,000 total in real estate commissions over the ten years even if the lease is ended early.

Farrell pointed out that the town government has a good history of supporting the school district.  He mentioned that since 2003 when the current district office was added on to town hall, the town has paid the electric and water bills totaling about $178,000 and that the town pays approximately $30,000 per year for fuel for the school district vehicles, excluding busses.  He also mentioned that the town pays for the three school resource officers and would like to see a fourth added during the next budget cycle.

Farrell added,” The Town Council is all in as a partner. The School Board just needs to come forward and want to work with us.  I hope they do.  I think you have a good idea.”

Reached for comment after the meeting, School Board Chair Jen Ganem said that the School Board is focused on more pressing issues like space planning for the growing kindergarten enrollment that will then put enrollment pressure on elementary schools.  She said that the Slater proposal could make sense down the line, but that the School Board does not have the time now to engage on it.

She stressed that the lease can be terminated if they decide to build a building or move the SAU office to another school building, but that the lease bought them time to figure out the facilities needs for student first before focusing more time on the needs of the administration.

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