In my last post, I talked about what it means for Amesbury to file a 'Statement of Interest' SOI in improving Amesbury Elementary School with the Massachusetts School Building Authority. As I wrote last week, the process for getting in the MSBA 'pipeline' is fairly competitive. Most schools submit an SOI application multiple times before advancing to the next phase of the process. MSBA is the state authority that works with local and regional school districts to design and fund school building and improvement projects.
UPDATE (3/24/15): You can find a copy of the SOI submission HERE.
For this follow-up post, I will:
- highlight conditions at AES that underpin our SOI request (as articulated in the SOI itself)
- talk about how a future AES renovation might fit into our overall financial picture and debt schedule
From the SOI: "Built in 1968, Amesbury Elementary School (AES) is the oldest school in operation for our district."
- Overcrowding: In 1995, the district installed on site 6 'temporary' trailers with an estimated life of 4 years for use as classrooms and other uses. The trailers have been in continuous use since then (20 years). Nursing and counseling offices lack ability to provide confidential space for students to be served adequately. With limited space for 1:1 interventions, teachers often have to use hallways and stairwells to meet with students.
- ADA Compliance: The current facility was built before passage of the Americans with Disabilities Act. Passed in 1990, the ADA prohibits discrimination and ensures equal opportunity for persons with disabilities in employment, State and local government services, public accommodations, commercial facilities, and transportation. Currently, any AES students needing accommodation for a disability at AES must be given services elsewhere in the Amesbury school system. With the lack of an elevator, students who are temporarily impacted by, say, a broken leg, must relocate to different classrooms for the term of their condition.
- Electrical wiring and technology: AES ability to integrate new learning technologies into the educational program is inhibited by the limitations of the building's electrical wiring. AES is literally unable to add outlets or install new equipment such as 'smart boards' due to outdated wiring and inability to handle any new load on the system.
- Fire Supression: AES has no sprinkler/fire suppression system.
- Aging plumbing: Original copper plumbing has leaks and cracks, requiring the opening of interior walls to fix. Asbestos coverings still exist on some plumbing - joints on piping and flooring throughout the building.
- Energy Inefficiency: All windows are single pane and extremely inefficient. The kitchen equipment is original and also inefficient.
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| AES - 'Temporary' trailers on the right |
This topic is challenging to address in any simple manner. This is mainly because the scope -- and potential price tag -- of any AES renovation project is, at this point, highly speculative. The heart of working with MSBA as a community is going through an intensive community and facility-based needs assessment process and then scoping out and pricing options to meet those needs. What we know now is the list of deficiencies outlined above. What we don't know, without going through the intensive work with MSBA, is what solutions might look like.
That said, it is safe to say that any project funded by the MSBA will be substantial in scope and like cost in the millions (if not tens of millions) of dollars, even for a project that focuses on renovation of the existing facility rather that building a new facility.
The way that MSBA financing currently works is that once a project has been fully developed (see my last post), the MSBA enters into a construction and financing agreement with the local district. MSBA shares the cost of the project with the district by splitting up front the full project cost. For example, say that a project was going to cost $15 million and the MSBA determined that it will be paying for $8 million of the project. The remaining $7 million would fall on the local district to finance.
Both MSBA and Amesbury would finance construction by issuing bonds. On our end, we would likely use what is called a 'debt exclusion' bond issue, as we have for the Middle School and the High School in recent decades but that is only one of a couple of options. Without going in to the details of all that, the main point with bond issues is that they work like loans: you issue the bond for some extended period of time (likely 20 years for this big of a project), investors buy your bonds (letting you pay for your project) and then you pay back principal + interest to the investors over the period of the bond ('loan').
At any given time, the City of Amesbury has multiple bond issues that it is paying off, of all sorts of scales and repayment periods. The inventory of all of this debt is called a 'debt schedule'.
Amesbury's current 'debt schedule' can be found HERE. If you click on this link and open the document, you can see that one item is highlighted in yellow, '05 Mid Sch Refunding'. I've highlighted this to show that we are about to complete the repayment of our debt from the Middle School renovations. Indeed, looking out beyond 2017, one can see a cascading 'retirement' of debt. The retirement of old debt and the making of new capital investments is part of the long-range investment rhythm of a municipality. With a project like AES, the bond payments hit the books and the debt schedule only once the project is completed (there are other mechanisms for managing the short-term costs during construction) and would likely be a few years away, at least. This should give some sense of how the financing of a possible AES project might fit into our long-term financial picture.
The Municipal Council takes up a resolution of support for the Statement of Interest (required by MSBA) at a Special Meeting Tuesday, 3/24/15 in Town Hall, immediately following our regular Finance Committee meeting (which starts at 7:00 p.m.). Public comment on this issue is welcome during the public comment period (this will not be a Public Hearing, per se).
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