Council and School Board begin paving way forward for school buildings project

Members of the Town Council and School Board met on Wednesday, November 16, 2022 to hold a workshop discussion on the New Schools Bond referendum which failed to pass during the November 8 election.  The discussion was framed around three points: Next Steps; Tax impacts and bond optimization strategies; and Fiscal Year 2024 budget planning timeline and milestones.

Superintendent Christopher Record and School Board Chair Kimberly Carr began by reviewing insights the School Board had shared during a workshop held immediately prior to the joint workshop.  Carr said that the strong election turnout demonstrates, “We have identified as a community that we have a need and a need to find a community solution.” Record said, “While the results were disappointing to many and a positive to many others, we still need to address our aging schools.” There is now an opportunity to hear what voters on both sides of the issue think, Carr explained.  Record agreed and added doing “An ‘autopsy’ of what happened to figure out how to move forward.”  Overall, Carr said that the consensus of the board was not to start the process from scratch and that doing so would be fiscally irresponsible.

Carr also explained that the School Board desires to work more closely with the Town Council.  “The community needs to see us united and that the buildings are town buildings,” she said.  A suggestion was made that a new Building Oversight Committee would have joint chairs from both the Town Council and School Board.  In addition, the new committee would attempt to have a larger presence of community members and employ a more transparent process in the selection process by mirroring the council’s Appointments Committee interview process.

Additionally, the School Board showed interest in hiring a third party to serve as a project manager or a “builder’s owner representative.”  This person would help with review of process, product, and design, as well as assist in conducting surveys and outreach to the community.  Town Councilor Penny Jordan agreed, “I think we need to move it on as quickly as possible; the project manager needs to understand large construction projects, architecture, and engineering.”  Councilor Nicole Boucher, who served on the Building Oversight Committee, said that her largest frustration has been the communication gap.  Communication work was left to volunteers but, “We need professionals. Volunteers should not be the experts in getting the information out for the town’s largest bond,” Boucher said.  Jordan also suggested that the cost to hire a project manager should come from the municipal budget.

In terms seeking state funding for school buildings, Boucher said that positioning the high school to get in line should happen; however, “The state of Maine has a “$2.8 billion gap in school infrastructure funding for education.”  This is the highest in New England despite having fewer schools and students.  “Clearly Maine hasn’t been investing in their schools,” she said.

Councilor Gretchen Noonan, who was a second councilor on the Building Oversight Committee, added that there should be one source which offers the community information on the project.  School Board member Cynthia Voltz added that it would also be important to ensure that all members of the School Board and Town Council have the ability to see all emails coming from the public, “If a message is difficult, it becomes even more important to see them.”  Town Manager Matthew Sturgis said that this could be facilitated electronically.

The discussion next led to funding strategies and budget timelines.  Council Chair Jeremy Gabrielson said that with the upcoming budget season fast approaching, “We should figure out if we are aiming for a June or November referendum and then lay out the milestones for getting there.”  Voltz suggested, “I think we will have more success if we have the revaluation done so that people will know what their tax bill will be.”  Sturgis added that the tax assessor should have the town-wide revaluation letters out by June or July of 2023, and “The community will have a better feel for their taxes by next November.”

Gabrielson mentioned the possibility of having a capital reserve fund to lessen the tax impact or to break the bond amount into sections.  “I would like to have some initial discussions on this as we move into the budget process,” he said.  School Board member Philip Saucier said that a capital reserve fund makes sense but, “It has to happen on the town side because schools are restricted by state statue on how much can be held in reserve.”  Sturgis commented that there are pros and cons to any financial option and suggested, “It might be more effective to break it up into thirds to ramp up debt service over time.”  Explaining the financial term, “net present value of money” Sturgis said, “One million dollars today is worth one million dollars; but the same amount depreciates over time,” and is worth less.  In addition, “By breaking it up you potentially set yourself up for better interest rates,” he said.

Boucher said that she has looked at the ways other towns outside of Maine have financed similar projects and, “Overwhelmingly, the biggest difference between Cape Elizabeth and these other communities is that we don’t carry debt at all and so we don’t have retiring debt that then gets rolled into the next improvement project.”  This approach works well for personal finances, but from a town perspective, “It means that when a project does come up, it does create a significant tax jump for our tax payers,” she said. Pointing out that the town has many aging buildings, “When a school is built and the debt begins getting paid off, the debt that will be retiring will then be used for town hall, the fire station, or the high school.  Yes, we will have an immediate jump for the community now, but I see it as a benefit for the community in the long term.”

Sturgis reported that within the next five years approximately, “$854,000 in annual debt payment will be retired.”  Gabrielson added that the town’s bond specialist indicated, “Our level of indebtedness and capital reserve is considered to be very low for a community with our valuation.” 

Gabrielson also suggested that researching bonding strategies should be added to the charge of the new, joint Building Oversight Committee.  “There is a challenge in forecasting what the bond payments will be because they are set by the market at the time you issue the bond, but to the extent we can lay out a general strategy that we are anticipating moving forward with it will help us come up with reasonable forecasts that we can put out in front of the voters.  That is something that we could have probably come up with earlier last time around,” he said.

The council held their annual caucus on November 15 and approved a budget schedule, for fiscal year 2024 budget season.  Gabrielson said that the schedule currently includes two meetings with the School Board, the first on January 18, 2023, but, “We will need to look for additional times to get together.”  Saucier, who is currently the Finance Chair for the board, said that the board will hold their caucus in December, but feels, “The more meetings the better and meeting earlier rather than later.”

In closing, Record said, “I am very hopeful from what I‘ve heard from the school board and from what I have heard at this workshop.  I think it’s a great step forward for the community.”

Joint Workshop Meeting Materials & Video Recording

School Board Workshop Meeting Materials & Video Recording  


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