RSU 40 Business Manager Karen Pike addresses the district’s board of directors in the Medomak Valley High School cafeteria on Thursday, Oct. 5. Pike presented the board with estimated taxpayer impacts of the $81 million capital improvement bond proposal, which residents in RSU 40 towns will vote on this November. (Molly Rains photo)
The $81 million school capital improvement bond coming before the voters of RSU 40 in less than a month has financing terms, use plans, and projected tax impacts available for the first time.
The bond balance, to be drawn in staggered amounts over the next four years, could cause tax increases of $3.59 per $1,000 of valuation at its peak and accumulate over $49 million in interest over its 25-year span, according to projections provided by district officials.
The school’s board of directors reviewed the figures at its Thursday, Oct. 5 meeting. The Waldoboro Select Board, whose members have opposed the proposal for months, met with the town’s budget committee and department heads on Tuesday, Oct. 10 to discuss how the bond could challenge Waldoboro’s municipal budget into fiscal year 2054.
The project would fund renovations and additions to school buildings and facilities within Waldoboro, Warren, Washington, Friendship, and Union, which make up the district.
Karen Pike, RSU 40 business manager, presented a draft borrowing schedule to the school board on Oct. 5 that included estimates of tax increases per $100,000 assessed property value for residents of the five towns. She noted the values were based on 2023 tax valuations and said the exact costs at the time of borrowing are subject to change.
“Everything in here is an estimate,” Pike said.
According to the schedule, the total sum of $81 million would be borrowed from the Maine Municipal Bond Bank in variably sized increments over a seven-year period.
The first increment, proposed for withdrawal in May 2024, is the smallest, listed at $3 million. The draft schedule then outlines $5 million to be withdrawn in November 2024, $15 million in November 2025, $15 million in November 2026, $30 million in November 2027, and $13 million in November 2028, totaling $81 million in capital for the district.
The proposed schedule includes an average interest rate of 4.61% for the bond installments, but notes that this value is based on market rates as of early October this year and is subject to change.
Repayments to the Maine Bond Bank would peak in fiscal year 2030, when the estimated tax increase for RSU 40 residents would be at its highest. Initial figures reviewed by the board on Oct. 6 show a possible $359 increase for $100,000 of valuation that year.
The repayment plan provided by the Maine Municipal Bond Bank shows the bond being fully repaid in fiscal year 2054, with the loan funds and interest together totaling approximately $130 million.
Board member Matthew Speno, of Union, requested additional information about how costs and rates could be affected if the project is not approved by voters this election season and is instead pushed “a couple to several years” into the future. In that situation, increased construction and labor costs could raise the overall cost of the project, he said.
In Waldoboro, the capital improvement plan would include a total of $41 million for renovations and additions to Medomak Valley High School.
At Miller School, the funds would be used for a $6.3 million, 12,000-square-foot addition, as well as asbestos abatement inside the school, security and playground upgrades, a new fire alarm and fire suppression system, and other renovations.
The funds would also allow for renovations, safety upgrades, and a new generator and water system at Medomak Middle School, resurfacing of the parking lots at the middle and high schools, and athletic field improvements.
Waldoboro Select Board members heard a proposal from the school board on the bond this summer, and convened a meeting with its budget committee and heads of ambulance and fire departments Oct. 10 to discuss budgeting concerns should the bond pass.
“There are a lot of factors here,” Town Manager Julie Keizer said of the specific number projections. “This isn’t the be-all, end-all, what we’re given.”
Keizer said that, regardless, the proposal would have a serious impact on the town’s operating budget and its capital plan, which includes upcoming ambulance and fire truck purchases.
The district and the town budget separately, but she expects Waldoboro to be held responsible for reducing costs, and thus services, to make up for tax impacts in already lean operations.
“There is no way the budget is going to go down on its own without us taking drastic measures,” she said.
School board members were invited to the Oct. 10 meeting but did not attend, according to Keizer. She spoke of a need for collaborative conversation between the school board and the town.
“We’ve got to do something, because it’s not sustainable,” she said. “Our budget, our capital expenditures, their capital expenditures, it’s not sustainable for us and it’s not sustainable for our people.”
She gave the example of a new walking trail for students included in the bond package versus a new ambulance needed by the town’s emergency medical services department in the next two years.
Elected officials and audience members said they wanted additional communication and clarity from the board to find a solution to real needs in school buildings. Concerns about the transparency, prioritization, necessity, and responsibility of the project list were restated from recent meetings.
Select board Chair Abden Simmons said the district has also not provided a definite answer whether work plans will keep Medomak Valley High School’s accreditation. The New England Association of Schools and Colleges has had MVHS on warning for facility concerns since 2017. The town is still seeking a prioritized project list from the district.
“The issue to me is not transparency, but credibility,” board member Bob Butler said.
Board member Michael Thayer reminded the room that citizens have the power to decide with their vote.
The RSU 40 board will host a public hearing about the bond from 6-7:30 p.m. on Thursday, Oct. 26 at Medomak Valley High School. At the hearing, community members will have an opportunity to learn about and discuss the bond ahead of Election Day on Tuesday, Nov. 7, when the proposal will be raised to voters in all five RSU 40 towns.
The board will next meet at 7 p.m. on Thursday, Oct. 19 in the district’s central office at 1070 Heald Highway in Union.
For more information about the bond proposal, go to rsu40.org.
