Next week Eastwood will vote on two issues. The first is a renewal to a maintenance levy, equivalent to
1.1 mills; the second is a bond issue for a new K-5 elementary at the central campus. If both pass, only
funds from the bond issue will be used.
The new elementary will cost taxpayers approximately $10 million as $8.5 million or 47% of the cost will
be paid by the state’s school funding program. In addition, at least $2.4 million of 1% interest bonds
are available from federal stimulus funds.
The net cost to taxpayers is 2.3 mills because the maintenance levy of 1.1 mills will end with passage of
the bond issue. Property taxes will not be assessed until 2012 for the new bonds. The initial cost works
out to an addition $70.51 per $100,000 valuation per year. This initial cost decreases in the future as
new real estate construction is added to the district valuation and the fixed financing cost is divided
among more taxpayers.
As a business decision, the cost of this plan will never be less expensive.
The Luckey and Webster buildings were built in the 1920s and are increasing in maintenance costs. Voters
should understand that the frame of reference for the condition of the facilities is not the Pemberville
building built in 1938. It is the newest of the elementary buildings and not the ‘weakest link.’ The new
building will save at least $350,000 per year in operating costs ($3.5 million over ten years, 1/3 of
the cost of the new building).
Interest rates are historically low which means the cost to finance the construction is likely to never
be better. Add to the low rates, the additional savings from the federal stimulus subsidy of 1% bonds on
at least $2.4 million.
Construction costs of similar projects in the area are coming in under budget. There is reason to believe
that construction costs of our building will perform the same as other construction projects in the area
during a recession.
Finally, I don’t see it prudent by taxpayers to wait for the day when the business decision to build is
forced on the district as one of the existing buildings becomes inoperable.
Costs to build a new K-5 building in 10 years likely will be three to four times the current cost to the
district of the $10 million. Regardless, we will be spending 1/3 of the new building cost in lost
operational savings over the next 10 years. Lastly, taxpayers will be paying for the financing owith
cheaper dollars as inflation makes the dollar worth less, yet the cost of the financing remains the
same.
The cost to finance the construction will never be less expensive than what is offered to voters next
week.
Terry Krukemyer
Pemberville