PENN—The first item of business at the Avon Grove School Board Committee of the Whole budget work session Thurs., April 11, was to clarify how much the new high school building project will cost.
The board asked for a correction to a line in a Daily Local News report that characterized the potential cost as well below the $127 million limit the board has set for the project.
The board also disputes reports on local social media that contend that the total project cost will come to $269 million.
The board approved the $127 million cost limitation in November. They also approved a parameters resolution allowing borrowing of up to $139 million to account for possible changes in the financial markets over the course of the four years of bond issues that will pay for the project.
“The target and maximum funding is $127 million. We passed the parameters of $139 million,. I’d like to see us shoot considerably lower,” board member John Auerbach said.
The district has already acted on the first $40 million bond issue and has hedges at 2/91 percent interest for 2020 and 2.76$ for 2021 for the second and third series of bonds. Actual interest rates on future bonds will not be known until they are released.
“It is a true statement that the cost to the taxpayer is more than $127 million. The cost of the project is $127 million, but the real mills that are put in place do include interest,” Board member Charles Beatty said.
Discussion on the 2019/20 budget centered on administrative connected expenses. Debt service for the year is budgeted at $4.9 million.
One page of the presentation showed the impact of debt service on the median tax bill. Residents with a property valued at the median $169,600 paying 30.35 mills have a total tax of $5,147.36 in the 2018-19 tax year, a 1.95 percent increase over the previous year. For 2019-20 millage with new debt service is 30.91, adding $94.98 (1.85 percent) to the median bill. Going forward, debt service increases are shown as accounting for 0.56 mills in each of the next four years. This increase is only that which will be attributable to debt service. Figures do not reflect the homestead/farmstead reduction for qualified tax parcels.
Although there are no new professional staff positions being added, salaries are budgeted to increase by $944,316 (2.9 percent) over the 2018/19 budget year. This increase represents 46.8% of the total budget increase.
Increases in transportation and tuition costs are also prime drivers of the budget increase, At this time, the projected budget is roughly $98.6 million. The budget is supported by a tax increase at the Act 1 limit of 3 percent along with $6.6 million from the district’s fund balance.
The board will act on the final version of the preliminary budget at their April 20 meeting. There will be two budget work sessions in May, with the budget coming to the board for final adoption June 6.
Budget presentation slides as well as video of budget work sessions can be found on the district website at www.avongrove.org.