School Board Sends $4 Million Bond to Warrant

The School Board accepted a $4 million bond to be placed on the ballot in March.

Board member John Robinson was not able to attend the Jan. 16 meeting and participated by telephone.

School District Business Administrator Peter Curro said several large maintenance projects had been put on hold “due to fiscal constraints.” Those projects are included in the proposed bond.

“This year I can say that there are several projects that cannot wait, and others are close behind,” Curro said.

“We feel that long-term financing at the $4 million level is both prudent and balanced,” Curro said.

He said bonding the repairs will remove the most critical projects from the list and allows a small annual appropriation to the Maintenance Trust Fund, giving the district time to structure funding of the Maintenance Trust Fund once the bond payments are done.

In the past, the Maintenance Trust Fund has been funded annually as a “pay as you go,” but the district is looking at a three-year rolling average for the future.

“So in year four, when you get to a large roofing project of $600,000, maybe the entire $600,000 is not in the Maintenance Trust Fund but it may be close to that, so maybe we can avoid a bond for maintenance again,” Curro said.

He said that moving ahead, assuming the bond is approved, the district can address its more pressing infrastructure improvements and begin to look ahead to other concerns.

Curro said that by procuring the funds up front all at once in a bond, the district would be able to schedule the projects in a way that meets educational programs as well as possibly securing better pricing.

He also said interest rates are beginning to climb but are currently around 3 percent.

“Right now the bond market is stable, however the issue with Detroit is beginning to send little ripples to the bond market,” he said. “I don’t know if we’ll have the opportunity that we have now next year.”

Curro added that the cost of petroleum products, which are used in roofing and paving, can be volatile and has an inflation rate of 5 percent.

He explained that a disadvantage of bonding is the 60 percent threshold needed for passage. The district missed that percentage by 11 votes when it sought a bond last year. Another disadvantage is interest cost, which becomes a long-term debt of the district.

“My goal would be a 10-year note,” Curro said.

School District Facilities Director Chuck Zappala said the district could go out to bid on roofing in late March. He said that the district would group the several projects on different buildings into one bid, using two contractors to get the work done.

“It really is not possible to do the work in one summer,” Zappala explained. “It would be an eight to 10 week construction period from the last day of school until the teachers and students come back again. It would realistically take two summers to get the work done.”

Board member John Laferriere asked why they were going for a $4 million bond rather than a $5 million bond to support other projects.

Curro said the easiest explanation was that the $4.5 million request last time didn’t pass.

“More importantly, we understand that there’s always a balance between need and the cost,” Curro said. “So we looked at these and said what do we need the bond to cover and what can we get by with the Maintenance Trust, and the projects that are listed for the bond are fair and meet the criteria of bonding and from our standpoint, would be a great advantage to get these improvements done and off our plate. That would allow us to restructure the Trust Fund.”

Curro said they want to be able to fund the Trust Fund to a level of about $850,000 annually, so that whatever the interest rate comes in for the bond, the maintenance trust would be at some level that as the principal of the bond drops, the level of funding of the maintenance trust would rise.

Board member Leitha Reilly said she was worried that $4 million wasn’t enough, but Curro said he was comfortable with the figure, both from a project standpoint and because $4.5 million didn’t pass last time.

Chairman Nancy Hendricks asked about the overcoating of the high school gym roof; the gym was built in 2003.

“If we overcoat the roof, how long do you think that is going to extend the life of the roof on the gym?” Hendricks said.

Zappala said the overcoating would add an additional 10-year warranty.

Hendricks asked what would happen if the bond failed and something catastrophic happened. Curro said that there were three options –  to close the impacted area, to repair it, and to petition the court to override the voters.

Zappala said the repair to the roof may be low, but damage done to what was under the roof may cost thousands of dollars to repair.

Budget Committee Chairman Chris Melcher asked about school security upgrades and said that because they were in the bond, he assumed there was a pressing need for them. That being the case, he said, there should be a separate warrant article because if the bond failed, the upgrades couldn’t get done for another year.

He also said that at $350,000, the press box and concession stand was a “pretty nice building for $350,000.”

Curro said the press box would be two story, as it is now, and the concession stand would be a little bigger and have bathrooms. He said the biggest complaint he hears from visiting teams and spectators is the absence of outside bathrooms.

Melcher added that he supported the bond.

Budget Committee member Mark Aronson asked if the paving and roofing work could be done early so as to avoid petroleum cost increases, and Zappala said the bids would be done early and prices would be locked in.

The maintenance bond will cover the following maintenance and repairs:

Londonderry Middle School: Replace roof over the Multi Purpose Room and classrooms, priority 1, $475,000; replace roof over classroom pod wing, priority 1, cost of $260,000; paving front parking lot, priority 1, $350,000.

Matthew Thornton Elementary School: paving, priority 1, $600,000.

District-wide: vestibule security upgrades, priority 1, $200,000; field improvements, press box and concession stand, priority 2, $350,000; contingency, $125,000.

Londonderry High School: replace roof, phase 5, priority 1, $280,000; replace roof, phases 4 and 6, priority 1 $550,000; replace roof over connector halls, priority 1, $130,000; overcoat gym roof, priority 1, $100,000; food service renovations, priority 2, $100,000.

Moose Hill School: pave west side and drop-off area, priority 2, $70,000; roof replacement, priority 1, $410,000.

The board, on two unanimous roll call votes, accepted the bond and moved the bond to the warrant.

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