Credit: Upper Dublin School District.
Options to pay for the renovation or rebuilding of Jarrettown Elementary School were presented at the Upper Dublin School Board’s April 23 Finance Committee meeting.
Of four project options with proposed estimated costs by ICS Consultants of $18.7 million, $35 million, $65 million and $70 million, the meeting focused on the tax impact for the $35 million covering full system replacement including deferred maintenance and ADA compliance and $70 million full rebuild projects.
According to an analysis by ICS, the HVAC, control systems and low-voltage infrastructure in the school “have exceeded their expected lifespan.” The building is not ADA compliant, shows signs of interior and exterior age-related deterioration and has logistical challenges in several areas.
The oldest school in the district, it has no sprinkler system or central air-conditioning, has water service issues with leaks, needs maintenance for a sewage pump and two boilers, has limited food service space and numerous exterior classroom doors, which is a security issue.
District CFO Andrew Lechman, who went over possible funding sources at the meeting, said issuing bonds for the project would increase debt service and require an increase in revenues or cuts in expenditures, which could be somewhat offset by funds in the capital reserve and debt service funds, along with cash reserves.
Jamie Doyle of PFM Financial Advisors, the district’s financial manager, in a review of market conditions and interest rates said while there is “a lot of volatility now,” bond sales are “being met with a lot of investor interest,” as investors want to put money in a safe place, such as school district general obligation bonds.
The $35 million borrowing plan would equal 1.2 mills over three fiscal years, while the $70 million borrowing would be 2.18 mills over three years, she said.
The budget impact of the $35 million borrowing would require a maximum 3.11 percent tax increase spread over the three years and add $2.8 million to annual debt service, Lechman said. The $70 million borrowing would add $5 million to debt service and require a 5.65 percent tax increase over three years.
Any tax increase is limited by Act 1, which caps next year at 4 percent, trending to 3.1 percent in 2028-29, he said.
A 4 percent tax increase, currently in the preliminary budget for 2025-26 would equate to an additional $305 for a home assessed at the district average of $199,328, Lechman said.
One mill equals $1 for every $1,000 of assessed value.
The district does “have other levers it can pull,” including a budgeted transfer of $3 million in the general fund, the capital reserve, which has an $11 million placeholder for Jarrettown’s system needs, and $5 million in the debt service fund, Lechman said.
There are two risks, one being a market risk on interest rates depending on when to borrow, he said. The other is that the district’s borrowings are at a tax-exempt rate, but if the federal government removed tax-exempt status on bonds, there would be an additional $500,000 to $800,000 to the debt service, he said.
The property tax impact would depend on how much was borrowed and the timing of the borrowing, Lechman said.
“If interest rates rose unexpectedly, it would not be the best time to borrow and we might pull other levers,” he said. If rates fell, the district could borrow then and use the levers later.
The district would determine the best course of action as it gets closer to starting the project, he said.
Board Vice President Mark Sirota suggested the district “could use other funds in the first three years to eliminate a big jump in debt service.”
“We are not considering a referendum,” he said. “We’re talking about staying within the Act 1 index at least the next several years.”
Board member Jenna Evans said she “would like to see if we could get creative with the funds we have. I would like to keep our borrowing capped at where it is … keep debt service where it is.”
Lechman said later the district administration wants to make a recommendation to the board on “the path we want to go down” for Jarrettown in June.
The timeline will depend on the project chosen. A partial renovation could be phased, while a full-scale renovation or rebuild would take a year of architectural work and then two to three years for construction.
Bus Depot
On an unrelated topic, Lechman presented a transportation project status update.
The district had proposed building a 10,517-square-foot accessory building for vehicle maintenance, parts storage and office space, with base infrastructure for future purchase of electric vehicles behind Fort Washington Elementary School. The plan included 118 parking spaces for 50 school transportation vehicles, 10 grounds department vehicles and 50 staff.
In January, the Upper Dublin Zoning Hearing Board voted 4-1 to deny four variances sought by the district to build the bus depot and maintenance facility on the A-residential zoned site.
The district has issued an RFP for real estate services to look for other properties to which four firms have already responded, Lechman said. The deadline is May 1.
The goal is to recommend a Realtor by the May finance meeting, he said.
In a discussion regarding the district’s appeal of the Zoning Hearing Board’s decision, board members who spoke agreed to drop the appeal.
The suggestion was to discontinue the appeal and have the superintendent communicate with the township manager on the process of attempting to “pursue a legislative option” to change some of the zoning restrictions.
“Nothing in Upper Dublin is zoned to allow this,” Sirota said. “We still have a transportation facility situation to resolve. We will still have to go through the zoning process.”
Meanwhile, the district is looking at extending the lease for the site where the buses are currently stored, he said.
