PORTLAND — The ad hoc committee established to study a proposed $70.6 million bond for upgrades to four elementary schools is in the home stretch.
Beginning with a 5 p.m. City Hall meeting Thursday, Nov. 17, the committee led by Mayor Ethan Strimling and School Board Chairwoman Marnie Morrione will be considering final recommendations on a plan first forwarded to the City Council in late June.
The committee has also tentatively scheduled a meeting at 5 p.m. Nov. 28, in City Hall, and a tentative public hearing at City Hall at 5 p.m. Dec. 2, Strimling said Monday.
“I’m feeling very hopeful; we have had a lot of questions and research that has gone into it,” Morrione added Monday about the process that could result in a referendum vote in the first quarter of 2017.
The bond question seeks money to renovate and upgrade Longfellow, Lyseth, Presumpscot and Reiche schools, which range in age from 40 to 60 years old. The work would be done in stages through 2022, according to the “Buildings For Our Future” plan drafted by Oak Point Associates.
When the ad hoc committee wraps up its work, the recommendations will be forwarded to the School Board and, eventually, a bond proposal will come to the City Council Finance Committee and the full council before a referendum is scheduled.
Thursday’s meeting comes a week after the committee met and received more information on the financial implications of the proposed bond.
Taken on its own, the $70.6 million bond would ultimately add 70 cents per $1,000 of assessed value to the city property tax rate, which is now $21.11. Committee members have discussed whether the bond purchases should be spread over four or six years.
A four-year plan would add 17.5 cents to property tax bills annually, or $40 each year for a property valued at $225,000. Should the bond purchases be spread over six years, it would mean no two school renovation projects would occur at the same time and would increase tax bills by 11 cents annually.
The six-year plan would increase taxes $27 annually on a property valued at $225,000.
“I think the costs for doing the bond are always what they thought they would be,” Strimling said.
Councilor Justin Costa, who was chairman of the School Board Finance Committee before his 2014 election to the City Council, said he was pleased at the progress the committee has made.
“I think the biggest takeaway is, really, we are closer than it might appear,” Costa said. “There is clearly a need to understand the impact on this on the taxpayers in the city, but we are trying to take a better look at the overall impact.”
The overall impact presented by city staff includes estimates to the school operations budget, without debt service on the bond or capital improvement spending. In the next five years, it was estimated that the local tax rate needed to fund school operations could increase an average of 4 percent annually. That would lead to 2 percent increases in the total property tax rate for the city.
The municipal operations budget, which does not include capital improvements spending or debt service on a $112 million 2001 note taken out to meet city pension obligations, is estimated to increase tax rates an average of 4.2 percent over the next five years. That means an overall increase of 2.2 percent annually on the entire tax rate.
The annual pension note payments last through 2026 and will increase incrementally from $13.7 million to $23.1 million. While the capital improvement budgets in the last two years have limited new bond spending to prevent any increase in the property tax rate, city Finance Director Brendan O’Connell has noted basic municipal and school capital needs for equipment, repairs and vehicles can be as much as $20 million annually, while the city budget is $15 million or less.
“I don’t think it is a surprise to anyone there is support for significant renovations to the school, but I wouldn’t take as saying they are against the council and school board doing the due diligence to bring down the cost,” Costa said.
He added that greater complications may come from Augusta: The 3 percent tax on annual incomes of $200,000 or more approved Nov. 8 could result in an annual increase in state aid to education of $10 million.
Also, the state Department of Education has reopened the application process for funding school construction, which could put two of the four elementary schools in line for the kind of funding the state would contribute to rebuild Hall Elementary School.
Strimling said the additional state aid would provide some bond flexibility, because it could stabilize the operating budget and minimize future property tax increases. That would offset the bond debt service.
Because it could be two to five years before the state decides on funding school construction, he said the city should be moving forward now.
But city bond counsel Jim Saffian said the referendum question could not be worded to “allow the clarity of bonding for the four schools, while providing the flexibility to apply for state money if it becomes available.”