WESTERLY — A fiscal impact statement developed to help voters understand the financial implications of the proposed school building project both to themselves and the town was approved by the Town Council Monday by a 6-0 vote.
According to the statement, voters will be asked to approve or deny the issuance of bonds up to $71.4 million when they go to the polls for a referendum scheduled for Oct. 8. The statement will inform voters that the state has agreed to reimburse no less than 35% of the cost of the project, which is the base reimbursement rate.
The state has agreed to reimburse an additional 17.5% of the cost as long as the project meets the bonus incentive goals it was designed to meet.
The state Department of Education approved a total project cost of $74.28 million, which includes $3.8 million for a five-year capital plan that will be paid for with funds from the town's annual capital projects budget. The total project cost includes $927,693 for furniture, fixtures and equipment at Springbrook and Dunn's Corners elementary schools, which RIDE declined to reimburse. RIDE has committed $5.45 million in pay go funds to help pay for early constructions costs.
When the pay go funds and capital plan costs are subtracted the net to be funded with bond proceeds is $65.95 million. The overall cost of the project, over the 25 year life of the bonds, is estimated at $76.85, which includes interest at 4%, state aid based on the minimum reimbursement rate and $1.95 in estimated earnings on bond funds that will be invested prior to being spent. School officials have stressed the higher reimbursement, which would lower the overall cost of the project, is likely to be awarded as long as the project is completed as currently envisioned.
The project, at the 35% reimbursement rate, would bring about an estimated cumulative tax increase of $3,818 for the owner of a house with an assessed value of $250,000 over the 25 year life of the bond. Taxes would stop increasing as a result of the project after 2026, when a number of current municipal debt obligations are scheduled to be paid off.
The council spent about 90 minutes reviewing and modifying the fiscal impact statement Monday and also worked on the statement on July 30. Councilor William Aiello had prepared a list of potential edits to the statement, including one based on what would happen if the state withdrew its reimbursement commitment.
Ultimately the council agreed the statement clearly states the project is based on receiving at least a 35% reimbursement rate.
"I think it would be disingenuous if we added that. The town wouldn't have a school building project without the state aid," Council President Christopher Duhamel said. "If you take away the state aid this project is impossible. We'd be misleading the taxpayers."
Duhamel and Aiello were joined by councilors Karen Cioffi, Suzanne Giorno, Sharon Ahern and Brian McCuin in approving the statement. Councilor Caswell Cooke Jr. did not attend the meeting.
Before the council's review of the statement, Gina Fuller, co-chairwoman of the School Committee's Building Subcommittee, asked the council to provide voters with an analysis of the impact of the project if it is reimbursed at 50 percent.
The project plans call for spending about $37.3 million to build a new, two-story State Street School for the district's students in grades 3 to 5, and razing the current State Street School building. Dunn's Corners School would be renovated for $13.5 million, Springbrook School for $7 million, Westerly High School's Ward Hall for $8.87 million and Babcock Hall for $3.87 million.
District security repairs would cost $2.2 million.