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Clark Rowell of Unibank explains the funding mechanism for Clarksburg's proposed $19 million school building project.

Clarksburg School Building Committee Learns Impact on Tax Rate

By Stephen DravisiBerkshires Staff
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CLARKSBURG, Mass. — The Clarksburg School renovation and expansion is projected to add between $3.20 and $3.25 per $1,000 of valuation to the tax bill, but the town administrator said there are things that will mitigate that impact.
 
The School Building Committee met Tuesday to discuss the financing of the project and its outreach efforts ahead of a Sept. 27 special town meeting and planned Oct. 10 vote on a debt exclusion to pay for the project.
 
The committee received some good news from Superintendent Jon Lev, who reported that the reimbursement rate from the Massachusetts School Building Authority is higher than previously anticipated.
 
"In the end, we've been talking about $8.5 million as the town's share [of the $19 million project]," Lev said. "Right now, we're looking at $7.7 million."
 
That local share could decline even more if the project meets criteria for financial incentives from the MSBA, but the district's owner's project manager advised that given the uncertainty of the final MSBA reimbursement, the town should plan on the higher share.
 
"I can't speak for the MSBA, and I can't tell you what they're going to do," Brian Laroche of Potomac Capital Advisors of Boston said. "You've had good luck with them, but I can't tell you what they're going to do. Things will come up during construction.
 
"We'll make a presentation to them, and they won't give us an answer until the end. It's very hard to plan and count on that."
 
Based on the more conservative $7.7 million estimate for the local share, the district's bond adviser, Clark Rowell of Unibank, told the committee that the project could add up to $3.25 to the property tax rate.
 
That is assuming the district is successful in securing a 40-year note through the USDA's Rural Development program at an interest rate of 3.38 percent.
 
McKinney gave the numbers from the town's end.
 
Clarksburg's current property tax rate is $15.85 per $1,000 of valuation. An average home in the town is valued at $174,000, so the additional tax burden to cover the construction bond would add $557 to the average tax bill, McKinney said.
 
"We have a couple of ideas we'd like to use to keep the tax increase lower than $3.25," McKinney said. "We do have a current loan subject to a debt exclusion for closure of the landfill."
 
In addition, there are three solar arrays in town that the town is negotiating a structured tax agreement on that could net $42,000 per year.
 
"Add that to the retirement of the landfill debt, and you're looking at $66,000," McKinney said. "There are areas of the town and school budget we're looking at to squeeze out savings.
 
"The ultimate goal is … we would like to see the tax increase realized to be in the very low $2 per thousand range. For an average home of $174,000, the anticipated increase, if we're successful — and we need to be — should be … a little bit more than a dollar a day for the household."
 
McKinney hastened to add that there is no "no cost" option for the aging elementary and junior high school.
 
"If this budget does not go forward, then 100 percent of the cost [of building repairs] does fall on the shoulders of the community if we're able to keep this Level 1 school open," he said. "This building has served us well. It opened in 1952. We, as a nation, used to build a lot of things."
 
Lev backed him up.
 
"If we don't do [the building project], we have a lot of work to do here just to keep it going," he said. "A new roof is hundreds of thousands of dollars, asbestos abatement is hundreds of thousands of dollars. There a lot of things to do just to keep it where it is."
 
In response to a question from another member of the committee about budget cuts to mitigate the increase from the building project, McKinney declined to get into specifics. But he did think an increase of a little more than $2 per $1,000 is achievable.
 
"I believe [those numbers are solid]," he said in response to a question from one of his colleagues. "We're going to need to make some town and school cuts, no doubt about it. But that is the goal. We would like to keep [the increase] as palatable as possible for the voter, for the homeowner."
 
Part of that strategy includes the application for a USDA Rural Development loan, which allows a longer term, 40 years, than the 30-year term typically available on the commercial market, Rowell explained.
 
That means paying a little bit more in interest over the life of the loan, but the payment each year is lower, and, as McKinney pointed out: "Once our loan is locked in, that's a set amount. It's like a fixed-rate mortgage. But at the same time, the revenue for the town goes up 2.5 percent a year, and people's paychecks go up.
 
"Over time, it will gradually decrease as a percentage of folks' income."
 
Rowell said he does not know of another school project in the commonwealth that has been funded through the Rural Development program, but Laroche noted that is not because districts have been turned down, but rather because most districts decide to go on the conventional municipal bond market.
 
"I feel very encouraged by Rural Development," Rowell said. "I've met with two [USDA] offices — one in Hadley, where she said this project would be eligible. And I met with Holden, which is sort of the boss of the Hadley office, and they were very supportive."
 
District architect Margo Jones of Greenfield's Jones Whitsett Architects told the committee her firm worked on a $3 million municipal building project funded through Rural Development.
 
"It's compatible with their program," Laroche said.
 
The School Building Committee scheduled a meeting for Thursday, Aug. 24, for a working group of the committee to iron out strategy for a community outreach campaign ahead of the fall votes on the project.
 
It also formally voted out language for the special town meeting warrant that it requested the Select Board to put before voters. The Select Board is expected next week to set the warrant for the planned Sept. 27 meeting.
 
The School Building Committee plans to hold an informational meeting for voters on Sept. 13 at 6:30 at the school, offering tours of the facility afterward.
 
In other business on Tuesday, Lev said he had a successful meeting with North Adams officials about leasing the former Sullivan School to relocate Clarksburg students during the construction phase. Lev reported that the school had minimal smoke damage from a May fire, that the cafeteria and kitchen are in good shape and that Clarksburg would be able to close off some of the building so it would only heat those parts that it needs to house its 196-pupil population.

Tags: Clarksburg school project,   

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