09/12/2013

Committee drafts 10-year plan for school, Community Services capital needs

The School Department needs to invest in its buildings and infrastructure, and officials believe it can do so in a way that is "tax neutral".

Michael Moore, School Board Finance Committee chair representing the schools' buildings-and-grounds committee, presented a draft 10-year capital stewardship plan to the School Board on Sept. 10, 2013.

The draft plan calls for a $13 million capital investment in school and Community Services facilities over the next 10 years, using a combination of annual budgeting, lease arrangements and bonding. The new bonds would be offset by $6 million in debt service due to retire in the next 10 years, Moore said.

The plan, which includes the Richards Pool, will be used to develop an overall capital stewardship plan for both the town and the schools.

The Town Council and School Board will meet at 6:30 p.m. Wednesday, Sept. 25, 2013, at Town Hall to work on a combined town/school capital plan for the fiscal years 2015-2024.

"This is a big step forward for the town of Cape Elizabeth," Moore said of the joint planning process. For the first time, capital needs of both the town and the school will be laid out for assessment and prioritizing, he said.

Planning for school, Community Services needs

The draft plan for the schools, Community Services and Richards Pool anticipates roofing, heating, electricity and other non-deferrable capital projects. Of the $13 million identified in the plan, $11.8 million is earmarked for school buildings; $1.7 million for the pool; and, $537,000 for Community Services.

The plan recommends bonding to finance $2.7 million of the school projects; and $1 million for the pool and Community Services.

Bonding is recommended because it will lessen the annual tax impact, Moore said. For example, a chart of anticipated school project shows annual costs varying widely: From a low of $900,000 in 2018, to $1.5 million in both 2016 and in 2017. Funding through the annual budget results in volatile tax changes each year, Moore said, but financing over time results in a more predictable, manageable process. "And more importantly, it would really help position the district to address what we think are very needed asset-maintenance investments," he said.

The plan recommends overall bond issues of $3.7 million for the duration of the 10-year plan: $1.8 million in 2016 and $850,000 in 2022 for the schools; and bonds or municipal leases of $675,000 in 2021 and $350,000 in 2023 for the pool and Community Services. During the 10-year span of the plan, approximately $6 million in school debt will be retired, Moore said.

For the schools, the average annual expenditure would be $1.2 million. "The way I think about it is, $1.2 million is approximately 2 percent of the replacement cost of the assets of the schools," Moore said. "If you look at useful lives, I think is a very reasonable amount." He added that the proposal for capital funding is a small percentage of the school's annual budget, which is $22.5 million for 2014.

The average annual expenditure for the pool and Community Services would be $223,000 under the plan, 4 percent of replacement costs, Moore said.

Three years in the making

The buildings-and-grounds committee included Moore and school Superintendent Meredith Nadeau, Business Manager Pauline Aportria, and Facilities Director Greg Marles. The capital plan has been in development for the last three years, Moore said, and is the product of internal and external studies of capital needs.

Those studies, Moore said, found that current facilities provide sufficient capacity to meet student enrollment and community-use projections, but there is a need to increase capital investment. The 2014 capital budget was $339,500.

Proactive planning

Superintendent Nadeau credited the School Board for being proactive in caring for assets. "If you look at the difference of where we've been spending less than a quarter of a million dollars a year to maintain our facilities, this is showing me - and I think clearly your message to the taxpayers is - we have resources that need to be taken care of," she said.

John Christie, School Board chair, said that the plan responds to taxpayer requests for long-term financial planning. "It will never tie future school boards to specific spending decisions that we would be making today, but it is a plan, it's a context and a structure within which future school boards can work and address facilities needs," Christie said.

After the workshop with the Town Council, the School Board is expected to consider a final, more detailed plan possibly in October, Moore said.

The capital plan is one of the School Board's goals for 2013.