New London learns it missed best route to magnet school district funding

New London - The magnet school construction plan overwhelmingly approved by voters at referendum earlier this month will not be among the school building projects recommended to the General Assembly when its next session begins.

Only projects that had been approved at the local level by June 30 will be considered for the 2014-15 school building project priority list, which the state Department of Administrative Services presents to the state legislature by Dec. 15, a departmental spokesman said Friday.

Even though the City Council approved the project and the associated $168 million bonding ordinance before that date, the state did not consider local approval to be completed until the bonding referendum question passed on Nov. 4.

"It has no impact on the reimbursement rate. That is set in statute," said Jeffrey Beckham, a spokesman for DAS. "But it does have an impact in terms of whether or not the department brings forward that project for its priority list for the coming session."

The General Assembly could add a project not recommended by DAS to its annual school-construction legislation, Beckham said, but no money can be expended on a project until it is included in such legislation.

"The town could go make a case to the General Assembly - the final call rests with the General Assembly - but that project would not be something submitted by this department," he said. "It certainly could be considered timely for next year's priority list."

Beckham said it is not unprecedented to have a city or town lobby the General Assembly to include a project not recommended by DAS in the annual legislation.

Mayor Daryl Justin Finizio said Friday afternoon that he would mount a vigorous effort to have the project included in the legislation. Finizio said he had been unaware the project would not be recommended by DAS, and that the information did not come up during two meetings he held with city staff Friday morning to discuss the magnet plan.

"That has not been the communication I have had with the finance department or the law department in the city," Finizio said. "But I will reconnect with them early next week to make sure we are all on the same page."

Finizio said he plans to begin "ongoing conversations" with members of the legislature to get the New London project included in a school construction bill as soon as possible.

"I know Representative-elect (Aundré) Bumgardner is supportive of the magnet plan, Representative (Ernest) Hewett was a huge supporter of the magnet plan and was part of the original legislation, so I believe our city's legislative delegation would certainly be supportive of that," the mayor said.

Voter support

On Election Day, voters overwhelmingly affirmed the City Council's approval of up to $168 million in bonding to complete the facilities portion of the transformation into the state's first all-magnet school district.

That the bond ordinance, which was petitioned by voters to referendum, passed with roughly 65 percent support allows the city to set in motion its plan to renovate New London High School and Bennie Dover Jackson Middle School, and construct a building to house a science, technology, engineering and math middle school at the high school campus.

But even before the polls opened, the city got the ball rolling. The School Building and Maintenance Committee created a subcommittee tasked with identifying and recommending an architect to design the new school buildings.

The city was able to take that first step before the result of the referendum was known because the entire evaluation, planning and design phase of the project is funded by a $3 million state grant secured by state-appointed Special Master Steven J. Adamowski.

Once an architect is chosen and a contract is approved by the City Council, the rest of the project will begin to take shape quickly, Smith said.

"The second step, which will be almost simultaneous, will be to hire a construction manager," Smith said. "And that needs to be done virtually at the same time or immediately after (hiring an architect) because you want those people to work together."

Throughout the project, the city will work closely with the Capitol Region Education Council, an educational service agency that helps the city control "the mountains of paperwork that have to come through," Smith said.

Though the total price tag of the high school and middle school project is expected to be about $168 million, the state legislature has approved a reimbursement rate of 80 percent for the construction. The city ultimately will be responsible to pay about $31 million of the total cost.

Managing the debt

According to Smith's financial projections, which are available on the city's website, the cost of the magnet school construction bonding for a city resident paying taxes on an average single-family residence would be 45 cents per day for the first 15 years of the 20-year bond.

Smith believes the burden on city taxpayers would be lessened because the city would be able to spend the state's money first. The city could draw down on the state funding by estimating its costs for three-month periods and using that money to fund the bulk of the early construction, he said.

Though the City Council and voters authorized the city to borrow up to $168 million, Smith said, the city intends to borrow about $28.8 million, beginning next year with a $2 million bond sale, contingent upon approval of the General Assembly. The next bond sale, of $10 million, is not expected to happened until 2019.

The debt associated with the construction plan won't begin to come due until current debt is paid off, resulting in a relatively steady level of debt payment over the coming two decades, Smith said.

"We won't get into any serious borrowing until the project is probably three-quarters of the way done or more," he said. "I structured it so that the city will have paid off quite a bit of debt as we go along and the actual annual debt service payments for the school construction will fit into our debt service plan without overwhelming the city."

But, Smith noted, the city has other needs, too. Things like road paving, buying and repairing fire engines, and updating software for city departments also must be funded but are not included in his projections.

"We're going to have to look at those other needs and, without funding those other needs, I could virtually do the school construction project without raising our debt service," he said. "So that is going to add an additional challenge to financing both the schools and the other necessary municipal infrastructure projects."

c.young@theday.com

Twitter: @ColinAYoung

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