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Some frequently asked questions, and answers, about the upcoming bond referendum. Don't see your question? Submit one at info@nkdemocrats.org.
What's the bond for? The bond on question 1 is meant to pay for the construction of a new middle school, and a new public safety building, while question 2 is for an indoor recreation center (link not live yet) for the town.
Do we really need a new middle school? Yes. Wickford Middle School is 95 years old and Davisville Middle School is more than 60 years old. Both DMS and WMS were rated “very poor” in a 2016 statewide study of school conditions (using 2014 data). Priorities for both schools include roof work as well as replacement of doors, windows, lighting, flooring, ceilings, and plumbing. HVAC and modern efficient water heaters and kitchen equipment are needed, as well as safety improvements to fire alarms, sprinklers, and utility shut-off valves. Virtually everyone in the community is in agreement that North Kingstown needs a new middle school. Need more detail? See here.
Why is North Kingstown having an election about this bond in an off-election year? Easy: to save money. We have a one-time opportunity that will expire next year to receive up to $91.5 million in state aid (including the debt service on those funds, which is another $33 million or so) for entering into a contract to construct a new middle school by June 30, 2024. After that date, the available state aid will drop by well over $30 million. Again, the reason this bond is happening now is to save money.
Will the cost go down if we wait? Absolutely not. Not only will we lose access to the state’s one-time incentives, but according to the Associated General Contractors’ the construction industry’s annual inflation rate has been 11.2% for the past 3 years. Industry costs “continue to climb at a much higher rate than the consumer price index, the most commonly cited measure of inflation.” Accordingly, there is no doubt that the longer we wait the more expensive these projects will be.
Isn't this a terrible time to sell bonds? Interest rates are higher now than they have been for a while, but the referendum merely gives the town the authority to issue debt to fund these important projects. It does not require the town to issue them immediately, or all at once. The town can wait for interest rates to go down, or issue short-term, low-interest bonds to bridge the gap until rates go down, or any of a variety of other strategies. And this week, the Fed declined to raise interest rates, signaling a potential decline in interest rates in the near future.
Aren’t there too many unknowns at this point to move forward? No. This is how the process is supposed to work. The town council and/or school committee develop conceptual plans. If the voters approve those conceptual plans, then town will hire professionals to fully develop them. However, before anything is approved it will be fully vetted by the public and the elected bodies of our community.
What type of a tax increase would this bond cause? It is way too early to tell. Remember, that we are only asking the voters to authorize the town council to borrow these amounts. There is a public process to go through to determine the ultimate amount, which could be far less. Having said that, considering the potential energy and operational savings and considering that our town is about to retire a large amount of bond debt—including the high school—we do not expect more than a 2-2.5 percent increase on the tax base.
We've heard estimates of a $1000 per household average tax increase? This number, presented by the town's financial advisor last June, was the result of taking the whole bond amount, assuming the simplest possible financing, using interest rates of last June, and dividing by the tax base. This estimate does not incorporate operational savings, including energy savings, or the reduction in debt payments coming in 2025 as older bonds are paid off. (The town manager frequently calls this the "debt cliff" but he means it's a good kind of cliff.) This estimate was made for the purposes of understanding the scale of the bond, not prediction of the tax rate. It is not even a worst-case scenario, since those old bonds are going to be retired no matter what. And again, the Fed recently declined to raise interest rates, so the rates may be back to their long-term, lower, levels by the time the bonds are sold.
Do you know the exact project cost? That will be finalized when the project drawings are finalized and approved by the state department of education. Regardless, voters should know that whatever the final number is it will certainly be millions of dollars more if we postpone this because the one time state bonuses expire next year.
Why not just retrofit and invest in our existing facilities? This is risky, because these very old buildings have latent or unknown defects that will have to be taken care of on a regular basis. Many of these defects could include asbestos or other hazardous materials. Renovations could ultimately cost the taxpayers more money while getting millions less in reimbursement from the state. Moreover, these facilities do not now conform to current state education standards. This will affect our community’s ability to give our children the same educational opportunities that other communities are now giving their children, and ultimately that will adversely affect our property values.
What is the state education funding match? In a normal year, the state matches school construction costs in North Kingstown ("housing aid") at 35%. This year, for projects underway by June 30, 2024 the state will match up to an additional 20% of project costs. Here's a RIDE presentation on the subject.
Why is the bond referenda for the new middle school and public safety complex one question instead of two? That was a decision of the town council. Regardless, there is absolutely no evidence that having two questions will make these much-needed projects any less expensive.
Where can I learn more? There are web sites for the:
In addition, there are public forums coming up to hear more about these projects, and the fire department is offering tours of the current public safety building. Click here for a schedule of events.
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