During the Northampton School Board meeting on Monday, Aug. 12, Financial Consultant Jamie Doyle from PFM Financial Advisors LLC provided a presentation on financing for the Route 329 elementary school/education center, bond refunding and Moore Elementary School financial information.
The first portion of Doyle’s presentation concerned the series of 2025 bonds issued for the Route 329 elementary school/education center, which is the second step in the district’s financing plan, totaling $31,018,577 in bond proceeds.
The summary of estimated construction draws updated on July 23 lists $75,941,774 as the total cost of the project with $71,936,388 of that total being borrowed, $2,800,000 being paid for with district cash and $1,205,385 being the 4% of estimated interest earnings using a wraparound structure.
In 2024, the district borrowed $35,191,870 in bonds, and in addition to the $2,800,000 cash contribution and $708,900 in estimated interest earnings, total proceeds equal $38,700,771, which will provide $315,000 in capitalized interest.
In 2025, step two of the financing plan will include borrowing $31,018,577 in bond proceeds, and in addition to the $456,832 estimated interest earnings, the total proceeds will equal $31,475,408 and will provide $1,360,000 in capitalized interest.
Then, in 2026, the third and final step of the plan includes borrowing approximately $5,725,942 in bond proceeds, and combined with the $39,653 estimated interest earnings, the total proceeds will equal approximately $5,765,595 with no capitalized interest.
The board can provide authorization for PFM to proceed with initiating the paperwork at the Sept. 9 meeting or later to maintain a February settlement of the 2025 bonds.
Next, Doyle presented a potential refinancing opportunity that the board could also consider at the upcoming meeting, which would replace the current 4% interest rates with new rates that range from 3.36% to 3.72%, thus producing a net savings of approximately $361,577.58.
Last, Doyle presented three possible scenarios for Moore Elementary School for partial renovations, full renovations and a demolition/total replacement that the board will need to consider.
Scenario 1 assumes a partial renovation to the tune of $27,432,953. However, the $990,000 estimated indirect savings from the Route 329 project would no longer be included in the financing plan and net overall local effort would increase by roughly $1 million each year. This increases the millage by 0.72, bringing the Route 329 project millage impact to 2.4 mills at approximately $1,373,493 per mill.
When combined with the Route 329 project, scenario 1 would bring the total proceeds to $103,374,726, which would require a millage impact of 5.55 mills.
Alternatively, scenario 2 assumes a full renovation of Moore Elementary for an estimated $53,975,006. Combined with the Route 329 project, total millage would increase to 6.49 mills with this scenario.
Finally, scenario 3 assumes a complete demolition and total replacement of Moore Elementary for an estimated $73,068,090. Combined with the Route 329 project, total millage would increase to 7.16 mills with this scenario.
Additionally, the three scenarios do not account for any proceeds from the sale of Franklin Elementary School, the Washington technology building or the district administrative offices, which will be closed upon the completion of the Route 329 project due to the new elementary school and education center accommodating all three facilities.
Any way the numbers are crunched, Moore Elementary renovations will require a tax increase that residents should be prepared for.
Although no decisions were made at the meeting, the next steps will be for the Facilities Committee to meet and discuss moving forward with either a partial renovation, full renovation or complete demolition/new construction of Moore Elementary. The committee will then share their recommendations with the board. The administration is hoping the board can provide direction for the Moore Elementary renovations in the coming months, definitively by the end of the year in order to move forward with the proposed project.
More information to come as the board votes on the various financial topics.
