VENTNOR – The city introduced a school bond ordinance Thursday, June 27 that officials said would reduce the tax rate by 13.6 cents over the next five years.
The ordinance appropriates $9.3 million for school facilities projects and eliminates the need for the school district to budget improvements in its annual operating budget.
The money will be drawn down as needed using bond anticipation notes, which requires interest-only payments until going to permanent financing in 2021 when existing school debt is paid off, officials said.
The bond includes $1.3 million for projects this year, including $978,880 for HVAC replacements and automation. Other improvements include renovations to the library and auditorium, repointing exterior walls, and parking lot and sidewalk repairs.
Including this year’s proposed capital plan in the bond reduced this year’s school tax rate by 3.2 cents, Mayor Beth Holtzman said.
“This is something that we are doing that was not done for many, many years, but was done in prior years,” Holtzman said, calling the plan “smart financing.”
“This is will be a huge savings to taxpayers,” Commissioner Lance Landgraf said.
Other projects in the district’s five-year capital improvement plan include phased-in bathroom renovations, a new interior fire sprinkler system, electrical outlet and security upgrades, renovations to athletic fields and additional HVAC replacements. Field renovations include a hockey rink, two basketball courts and surface upgrades in the middle school area.
The capital financing plan was recommended by district and city auditor Leon Costello of Ford Scott Associates of Ocean City as a way to reduce school taxes without cutting educational programs or staffing.
Costello projected the school financing plan would reduce the school tax rate 5.8 cents in 2019 and 4.6 cents in 2020, even if the school district raises its tax levy amount by $300,000 each year to cover the additional cost of programs and staffing, he said.
In the days leading up to the school Board of School Estimates meeting on April 18, Holtzman said that coming in with a “flat” school tax budget was not enough for overburdened taxpayers who experienced a “huge” tax increase in 2017 and vowed to disapprove the budget as introduced unless the district approved the bond financing plan.
During the school board meeting on Wednesday, June 27, Board of Education President James Pacanowski said if the bond is approved, it would allow the district to have funding in place to make HVAC and other repairs by August.
A public hearing on the ordinance will be held 5:30 p.m. Thursday, July 12 at City Hall.