BOBBY-Capital Project Presentation - April 25, 2017€™projectof’this’size?’ GlensFallsCitySchools GlensFallsCitySchools Is’the’Districtﬁnancially’prepared’to’move’forward’with’a

Glens Falls City Schools

2017-‐2018 Capital Project Informa8on Session

PRESENTED BY: Bobby Yusko, MSEd, MPA, SDBL

Assistant Superintendent for Business


•  What is a capital project?

–  Acquisi8on or construc8on of capital facili8es and other capital assets

–  Classified in a variety of ways: •  New Construc8on -‐ erec8on of new building or enlargement to exis8ng building

•  Acquisi8on – means the same as purchase •  Repair – MAJOR repairs which affect health/safety of occupants (non-‐recurring), regular R&M not eligible for aid

•  Altera8ons – change/addi8ons in educa8onal space/use •  Reconstruc8on

–  Capital Improvement – permanent improvement increasing value –  Remodeling – work to alter, modernize, renovate, change building –  Replacement – replacement/installa8on of building components that

prolongs life/increases value (roof, temperature controls, boilers, etc.)


•  Why is the classifica8on of capital project work important?

–  Eligible projects are aided through the general state aid category of Building Aid •  Purpose of Building Aid is “to ensure that each school district and BOCES provides

suitable and adequate facili8es to accommodate the students and programs of the district….Exis8ng facili8es must meet health and safety regula8ons and reconstruc8on of exis8ng facili8es must meet building code requirements.” -‐ Carl Thurnau, PE, former Coordinator of NYSED’s Office of Facili8es Planning

–  Depending on the type of work, Building Aid is received over a period of probable usefulness (PPU)

•  15 Years: Majority of project costs devoted to renova8on, rehabilita8on or reconstruc8on of exis8ng space

•  20 years: Majority of project cost devoted to the construc8on of addi8ons to exis8ng buildings

•  30 years: New buildings


•  How does a project become eligible for Building Aid?

–  A project must have construc8on costs (excluding incidental costs) greater than or equal to $10,000

–  May include new building construc8on or purchase, addi8ons, and altera8ons/reconstruc8on of facili8es

–  Projects without instruc8onal space are typically not eligible for Building Aid

–  Various elements of capital construc8on projects must have prior approval from the Commissioner of Educa8on, and an issued building permit •  NYSED’s Office of Facili8es Planning is charged with these responsibili8es


•  How is the project paid for?

–  “School Districts may finance their projects in any manner they choose…” Carl Thurnau, PE, former Coordinator of NYSED’s Office of FaciliLes Planning

–  “The successful comple8on of a school construc8on project is the end result of careful and thoughgul planning. No school construc8on project would be complete without a financial plan being established. Construc8on projects and site purchases may be financed by any one, or any combina8on of, capital reserve fund, current budgetary appropria8on, or borrowed money. While the first two methods avoid interest costs, most districts find it necessary and/or desirable to finance part or all of the cost of large projects by borrowing.” NYSED’s Office of FaciliLes Planning, Financing School ConstrucLon, Reference Guide #A.8

–  “Large construc8on projects will require long-‐term commitments to be repaid annually as principal and interest. Debt service will be required for bond issues, bond an8cipa8on notes…..the allowable period of bonding may be limited by the period of probable usefulness (PPU).” NYSED’s Office of FaciliLes Planning, Financing School ConstrucLon, Reference Guide #A.8


•  How is the project accounted for?


•  How is the project accounted for? •  Capital Projects Fund (H)

–  “must be used if the acquisiLon or construcLon is financed in whole or in part from the proceeds of obligaLons…”

–  “should be established for each authorized project.” –  “there will be instances in which several related projected combined

under a single budgetary and/or debt authoriza8on may be accounted for in a single fund.” »  i.e. – “A series of building improvements carried out over an

extended period of 8me by a school district provided by a single bond authoriza8on issue.”

•  “There will be many instances in which the General Fund….will budget and expend its own resources for a capital purpose. So long as the resources in such cases are derived exclusively from the direct revenues of the par8cular fund and do not involve borrowing, such outlays may properly be accounted for in the fund involved without a separate Capital Projects Fund.”

Office of the New York State Comptroller Division of Local Government and School Accountability

School Districts Accoun8ng and Repor8ng Manual


General Fund 2017-‐2018 Budget

$43,050,269 Capital Projects Fund

Does vo8ng “YES” on the project mean $18,241,000 is injected into the General Fund?

Voter AuthorizaLon 5/16/2017

Answer:

NO

The District is currently re-‐paying principal and interest on obliga8ons issued to fund previously authorized capital improvement projects.


General Fund 2018-‐2019

Interest Expense

Capital Projects Fund

It is important to dis8nguish the difference between the GENERAL FUND and the CAPITAL PROJECTS FUND. The repayment of debt obliga8ons, issued in part to fund the project, are repaid based on a maturity/amor8za8on schedule.


Principal and/or Interest due? YES


P & I Expense



Interest Expense

Capital Projects Fund

If the project is approved on 5/16/2017, according to our Capital Project Plan, we will have an interest payment in the 2018-‐2019 school year, and we will begin re-‐paying debt (principal) in the 2019-‐2020 school year. This will con8nue for 15 years.


Principal and/or Interest due? YES


P & I Expense

Glens Falls City Schools As previously men8oned, the repayment of obliga8ons occurs over 15 years. So, for example, the light proposi8on, would not be a one 8me expenditure of $691,200. In fact, there are a couple key considera8ons the Post-‐Star editorial board leo out of its recent editorial.

1.  Building Aid •  The District projects to receive 75.1% back in

building aid. 2.  PPU’s •  The District will re-‐pay $691,200 over a 15

year period.

Glens Falls City Schools When taking into account these key considera8ons the Post-‐Star editorial board leo out of its recent editorial, the impact is slightly different.

Glens Falls City Schools Assuming the lights are approved in May, the projected annual district/local share could be lower based on revenues generated from ac8vi8es/games/field use.

Glens Falls City Schools Is the District financially prepared to move forward with a

capital project of this size?

Glens Falls City Schools Glens Falls City Schools

Glens Falls City Schools Is the District financially prepared to move forward with a

capital project of this size?


Here’s the “2%” …one of many factors in this calcula8on

Tax Cap CalculaLon

Prior Year Tax Levy x

Tax Base Growth Factor, if any (determined by Tax and Finance)

+ PILOTS Receivable During Prior Year (16-‐17)

-‐ Taxes Levied For Exemp8ons During Prior Year

= Adjusted Prior Year Tax Levy

X Allowable Levy Growth Factor (Lesser of 2%

or CPI) -‐

PILOTS Receivable In The Coming Year +

Available Carryover, If Any =

“TAX LEVY LIMIT” +

Coming School Year Exemp8ons =

“MAXIMUM ALLOWABLE TAX LEVY”




Glens Falls City Schools What is the effect on taxpayers?


•  Future Mee8ngs

– Board of Educa8on Mee8ngs

•  May 8, 2017 – Capital Project Presenta8on – 6 p.m.

•  May 16, 2017 – Budget Vote


The mission of the Glens Falls City School District is to provide a safe, posi8ve and s8mula8ng environment — one that fosters self growth, a passion for con8nuous learning, confidence and the ability to succeed in a changing world.

We promote excellence through high expecta8ons and evolving standards for students, staff, parents and community. The challenge is to reach one’s personal best while respec8ng each person’s individuality.

We make it our responsibility to be accountable for the implementa8on of this mission and to model behaviors that are influen8al to the character as well as the mind.


•  Addi8onal materials on www.gfsd.org

•  Sign up for School News No8fier:

Documents

BOBBY-Capital Project Presentation - April 25, 2017€™projectof’this’size?’ GlensFallsCitySchools GlensFallsCitySchools Is’the’Districtﬁnancially’prepared’to’move’forward’with’a