I have received a lot of emails regarding the monthly costs presented at the forum. The following post is on the High School Renovation Blog to explain how the numbers were arrived at:
"During the Community Forum presentation a slide was included to show what the range of project costs would look like in terms of monthly tax increases for a $225,000 home in Mt. Lebanon (the average price of a home sold here in 2007). The numbers are based on bond schedules prepared by the District’s financial advisors using municipal bond rates as of July 18, 2008 and assuming State reimbursement of 16% of the cost of the bond payments. Based on that information, a $90 million project would cost a homeowner about $45 per month, a $110 million project would cost that same homeowner about $55 per month, and a $130 million project would cost about $65 per month."
There were some residents that were confused a bit by the projected monthly numbers juxtaposed against the total project cost. I believe the above information mostly solves that mystery. The post with the linked spreadsheet I had earlier did not include this 16% reimbursement rate.
Thanks for reading.
James
Showing posts with label millage. Show all posts
Showing posts with label millage. Show all posts
Saturday, July 26, 2008
Wednesday, July 23, 2008
Forum Update
The School Board held the Community Forum on the High School Project last night. There was a wealth of information that was distributed. The documents given out last night is available now on the MTLSD website.
Today I will give an overview about what was talked about last night and later I will post at length about each of the options presented.
There were really four options presented at the meeting last night. Dollar estimates were given last night for each of the options but really, those numbers are still so early in the game (we still do not yet have a Construction Manager for the project) that they really are just educated guesses at this point. I think we ought to take the estimates and give them a range of +-10%. So with that, these were the options presented.
Option 1 was a renovation of the existing structure. This option would essentially bring the existing structure up to code and fix the problems that exist. It would address the seriously outdated mechanical systems in the building and provide for asbestos abatement throughout the structure. I like to compare this option to what was recently completed at all of our elementary schools. Estimated cost of this option was $77.8 million.
Option 1A was a complete renovation with additional significant improvements to certain parts of the existing structure. While this would not include a 'new' building, it would completely change the current Administration building into a learning center for the future while keeping the rest of the school largely the same. Estimated cost of this option was $97.3 million.
Option 2 was a plan to construct a largely new 'wing' of the school. This option would keep intact the existing front on Cochran Road of the Auditorium, Little Theatre, and the current face (B Building) of the school. Buildings behind the front would be demolished in a phased approach that would lead to the large majority of classrooms being held in the new wing built in place of the demolished buildings. This plan would create a 67% new school and 33% renovated school. Administration would be moved into the B-Building. Estimated cost of this option was $118.3 million.
Option 3 was a plan to build a new school. The new building would be built largely on the upper parking lot and practice fields. This would involve very little phasing. Once the construction was complete we would simply move students to the new building. This option also renovates the B-Building on Cochran Road. Administration would again move into this building. Estimated cost of this option is $131.6 million.
Last night was the first time the Board really had a chance to sit down and see all the information presented at one time. It was also the first time that we had a chance to see estimated costs. I think that, given our current economic environment, we all understood that the estimates would come in higher than what the Dejong study showed in January 2007.
Last night it was mentioned during the meeting that for every $25 million we need to finance for this project, it would equal roughly a 1-mill increase in taxes. So a $100 million project could force a 4-mill increase and a new $131.6 million new school would surpass 5 mills. Actually, that rule of thumb is a bit high, but still, these are not insignificant numbers. The page in the presentation that lists monthly costs includes the 16% State reimbursement rate. That monthly number equated to a total millage increase of 3.5 mills, not more than 5. I was able to create a spreadsheet that approximates these numbers however, bond coupon rates over the term of the bond will not be fixed as a simple PMT calculation in a spreadsheet would be. As I get more information on the possible bond issuance, I will let you know.
While it is extremely important to get information out to residents about how this project will effect their pocketbooks, we need to also have the vision to do what is right for our students and our community.
That's all for now. I am going to review the documents again, listen to feedback and post more later this week.
James
Today I will give an overview about what was talked about last night and later I will post at length about each of the options presented.
There were really four options presented at the meeting last night. Dollar estimates were given last night for each of the options but really, those numbers are still so early in the game (we still do not yet have a Construction Manager for the project) that they really are just educated guesses at this point. I think we ought to take the estimates and give them a range of +-10%. So with that, these were the options presented.
Option 1 was a renovation of the existing structure. This option would essentially bring the existing structure up to code and fix the problems that exist. It would address the seriously outdated mechanical systems in the building and provide for asbestos abatement throughout the structure. I like to compare this option to what was recently completed at all of our elementary schools. Estimated cost of this option was $77.8 million.
Option 1A was a complete renovation with additional significant improvements to certain parts of the existing structure. While this would not include a 'new' building, it would completely change the current Administration building into a learning center for the future while keeping the rest of the school largely the same. Estimated cost of this option was $97.3 million.
Option 2 was a plan to construct a largely new 'wing' of the school. This option would keep intact the existing front on Cochran Road of the Auditorium, Little Theatre, and the current face (B Building) of the school. Buildings behind the front would be demolished in a phased approach that would lead to the large majority of classrooms being held in the new wing built in place of the demolished buildings. This plan would create a 67% new school and 33% renovated school. Administration would be moved into the B-Building. Estimated cost of this option was $118.3 million.
Option 3 was a plan to build a new school. The new building would be built largely on the upper parking lot and practice fields. This would involve very little phasing. Once the construction was complete we would simply move students to the new building. This option also renovates the B-Building on Cochran Road. Administration would again move into this building. Estimated cost of this option is $131.6 million.
Last night was the first time the Board really had a chance to sit down and see all the information presented at one time. It was also the first time that we had a chance to see estimated costs. I think that, given our current economic environment, we all understood that the estimates would come in higher than what the Dejong study showed in January 2007.
Last night it was mentioned during the meeting that for every $25 million we need to finance for this project, it would equal roughly a 1-mill increase in taxes. So a $100 million project could force a 4-mill increase and a new $131.6 million new school would surpass 5 mills. Actually, that rule of thumb is a bit high, but still, these are not insignificant numbers. The page in the presentation that lists monthly costs includes the 16% State reimbursement rate. That monthly number equated to a total millage increase of 3.5 mills, not more than 5. I was able to create a spreadsheet that approximates these numbers however, bond coupon rates over the term of the bond will not be fixed as a simple PMT calculation in a spreadsheet would be. As I get more information on the possible bond issuance, I will let you know.
While it is extremely important to get information out to residents about how this project will effect their pocketbooks, we need to also have the vision to do what is right for our students and our community.
That's all for now. I am going to review the documents again, listen to feedback and post more later this week.
James
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