By Frank Mustac, Contributor
Plans on how best to finance the more than $35 million school facilities bond that voters approved in September have changed slightly.
District officials said they are still looking to keep property taxes for schools at a manageable level during an overlap period from 2018 to 2021. During those three years, taxpayers will be simultaneously paying off part of the new debt incurred through the referendum and old debts for past facilities projects, which will be retired by August 2021.
School representatives in October appeared before the state’s Local Finance Board seeking permission to use what is called a non-conforming debt to get over the hump of the overlapping debts.
“The good news is that (the state) did approve non-conforming debt,” Board of Education President Lisa Wolff said at the Nov. 14 school board meeting. “The bad news is it was not approved as I discussed last month at our previous (board) meeting.”
At that time, Ms. Wolff explained that during the original 25-year repayment period, the school district had hoped to pay only interest on the new debt from 2018 to 2021, then pay both interest and principal for the next 12 years.
Those plans, however, were altered as a result of the state’s determinations.
“What we ended up getting approved was a modification of (our plans) where we’ll pay varying amounts of principal,” the board president said. “This will be helpful for the taxpayers, but it wasn’t exactly what we discussed at the previous board meeting.”
Despite the fact that the school board now has to make adjustments, Ms. Wolff said the changes were good for taxpayers.
“It still has all the advantages of reducing the amount we need to pay during the overlap period before the older debt drops off. We also are shortening the repayment period to 15 years,” Ms. Wolff said. “Originally what we had planned for when the referendum was approved was a repayment period of 25years.”
That reduced repayment period, along with the ability to still keep taxes low during those three years in question, were described as a “win-win” by the board president.
“We were able to lower the amount for taxpayers both during the time we are paying the debt back as well as the length of time we will be paying the debt back,” she said.
School Business Administrator Robert Colavita said the district will work to keep down property tax payments.
“We are going to try and mitigate (the overlap in property taxes) further through our budget process,” Mr. Colavita said.
Earlier this year, Superintendent of Schools Thomas Smith offered a best-case scenario of the cost for a taxpayer during the overlap years. For example, a Hopewell Borough taxpayer would be billed in 2017 to help pay down the old school debt at the rate of $100 per $100,000 of assessed property value. Once the overlap takes place, however, that same taxpayer could pay upwards of $114 per $100,000.
The rate would drop substantially to $39 in 2022 because the old debt would have expired by then.
Voters in Hopewell Township and Pennington and Hopewell boroughs approved a school facilities bond referendum in September by an almost 2-to- 1 margin to fund repair work, construction, alterations and other capital improvements at several schools in the Hopewell Valley Regional School District.
The superintendent said some projects could start as early as spring 2017.
