HILLSDALE—Should the upcoming $82.7 million bond referendum to replace George G. White Middle School be approved on March 14, a financial adviser told an online forum Jan. 26 that it was likely the bonds would be refinanced at least twice over the bond’s 30-year term, reducing bond interest costs and lowering property taxes for residents.
Residents will vote Tuesday, March 14, 7 a.m. to 8 p.m. at two polling sites.
School officials estimated the bond’s tax impacts will average approximately $1,140 annually, or $95 per month on Hillsdale’s average home assessed at $474,172. The tax impacts would likely start in the 2024–2025 tax year, said officials.
The next opportunity for residents to ask questions about the referendum will be at a district-sponsored open house and tour of George G. White Middle School on Saturday, Feb. 11, 10 a.m. to 1 p.m. Project Architect Joseph DiCara will be there. The school is at 120 Magnolia Ave. (See the website for details.)
Sherry Tracey, senior managing director at Phoenix Advisors LLC, said that the 30-year bond for replacing the outdated 100-year-old middle school was being spread out over three decades and “conservative” estimates put bond interest rates at around 4.25 percent when bonds are likely to be sold in late 2023 or early 2024. Current bond rates are 3.75% to 3.8%, she said.
Tracey noted the bonds are sold with a call provision, which means they can be refinanced likely at a lower interest rate, which will lower the annual tax hit for homeowners. She said the bond’s 30-year term remains unchanged, and by law the bond approval only permits a 30-year bond payback period. Bonds sold this year would expire in 2053, she said.
“Over the years going forward, 10 years from now, seven years from now, whatever it may be, we’re able to refinance at a lower interest rate, that’ll reduce the interest you’ll pay on the remaining life of the bond, and the average tax impact at that point,” Tracey said.
A few weeks ago, the district received final state notification they will receive $5.4 million in state aid if the March 14 bond referendum is approved. Finance officials said Jan. 26 that they would need to bond for the full $82.7 million amount, which exceeds the district’s current bond borrowing limit.
However, the district will use approximately $24 million of the borough bonding capacity, which would leave the borough with about a $43 million borrowing limit. Borough officials said this would not affect future borough bonding needs, and the mayor said it was “unlikely” that the district exceeding its bond limit would increase future bonding rates although it could should the borough’s credit rating be downgraded as a result.
Some borough officials were surprised that school officials did not directly notify them that they would need to use some of the borough’s borrowing capacity. School officials said the borough was notified through its bond counsel, who also serves as borough bond counsel, and stressed that borrowing borough bonding capacity was completely legal under state law and did not obligate the borough in any way to pay off the school bonds.
(See “$82.7M Middle School Bond Borrows $24M of Boro’s Bonding Capacity,” Michael Olohan, Pascack Press, Jan. 27, 2023.)
The forum did not offer a dialogue with audience members; rather, questions could be emailed in real-time by viewers. School board president Nicole Klas and member Justin Saxon moderated. Speakers included Tracey, superintendent Robert Lombardy, business administrator Sacha Pouliot, bond counsel Steven Rogut, George White principal Donald Bergamini, and DiCara Rubino Architects principal Joseph DiCara.
A recording of the nearly two-hour forum is posted on the school district’s Road To Referendum page.
Lombardy said the district was “out of space and we are out of date” at the school. He said a demographics study showed that by 2030, Hillsdale’s population will increase 7% and by 2040, it will increase 12.5%. He said the study showed that in five to six years, the student population would increase by 59 students in elementary schools.
Lombardy noted the demographics study did not account for any new students from the proposed 256-unit Patterson Street luxury apartment complex.
He said the middle school serves 500 students in classrooms averaging about 540 square feet, versus today’s standard 750 to 800. He said the infrastructure in place “cannot meet the demands of our students,” noting the gym was undersized, counseling and nurse’s offices were “tucked into small corners…and science labs are antiquated” and “not up to standards needed by 21st century learners.”
If the referendum is approved, a new school could open by fall 2026, the district says.
Answering a resident’s question on what it would cost to fix problems at the middle school should the referendum fail, DiCara said millions of dollars in immediate repair costs may be needed. He said the building was not in danger of collapsing but the exterior brick surface is cracking, roof needs replacing, and some mechanical systems, including boilers, need replacing.
Lombardy said should the bond referendum fail, “there is no ‘do nothing’ option” as challenges at George White are “significant” including infrastructure, facilities, and student space needs.
“Significant work is needed over at [the middle school],” including replacement of boilers, piping, and unit ventilators in each room. “A project that only addressed heat … that could cost many, many millions of dollars.” He said if the referendum fails, the district will need to start planning again “for another referendum that will come with significant costs because so much work needs to be done.”
He said that process will take time to do planning, create drawings, get community feedback, and seek state education department approval, which could delay improvements needed “for two years or more. As time progresses conditions will remain stagnant or possibly deteriorate further, and over time the further we delay this project, the more likely it is we could see costs increase over time.”
In an email to Pascack Press on Jan. 30, he said, “George White has such significant needs that we cannot address them in the district’s annual budget. Bond funding would still be necessary, and that would require developing preliminary plans, making new cost estimates and submitting again for state approval. The timeline would be one to two years before a public referendum, which puts us into pricing of 2024, action in 2026, and completion in 2028 of work on this long-standing challenge for the Hillsdale community.”
He said should renovations be required at the middle school, students would be housed in “modular classrooms” or trailers for possibly two years at up to $4 million. He said there would be “no return” on the money spent on trailers, and noted they were not ideal for students during class changes, inclement weather, and raised safety and security concerns.