Investments in Schools and Students
HVRSD is committed to fiscal responsibility.
A bond referendum is a strategic tool in financial planning because it prioritizes major building needs while taking advantage of state aid.
This type of state aid is only available if voters approve the bond referendum, and it means more than $20 million for HVRSD.
LOCAL AND STATE FUNDING FOR IMPROVEMENTS
Financial advisors who specialize in school finance have estimated what these investments would mean for taxpayers in Hopewell Borough, Hopewell Township and Pennington Borough.
Improvement costs are estimated at $87,150,797.
State aid is committed to contribute $20,282,019 toward those costs.
The property tax impact, which includes the estimated state aid, is:
Hopewell Borough: $433/year
Hopewell Township: $507/year
Pennington Borough: $515/year
Tax impact estimates are based on a home’s assessed value, not market value, and the difference is important. (*See details about assessed value.)
Each year, the Mercer County Board of Taxation provides the school district with tax rate data per municipality, based on the tax assessor’s formula for that municipality.
*ASSESSED VALUE, NOT MARKET VALUE
A home’s assessed value is used to determine property taxes. That differs from a home's market value, which is typically a higher figure and is an estimate of how much a home could sell for in the current market.
Mathematically, the average assessed value of a home in:
Hopewell Borough is $408,781
Hopewell Township is $487,648
Pennington Borough is $487,463
Enter a home’s address to learn its assessed value.
THE ADVANTAGE OF STATE AID
Voter approval of the bond referendum would allow the district to borrow bonds and use up-front funding to make long-term improvements throughout all six schools. That opportunity makes a bond referendum a strategic financial tool: State aid is estimated to provide more than $20 million toward improvement costs.
State aid also takes advantage of a funding source that taxpayers already pay into. Approval of a bond referendum is the only way that this money can be brought back to our communities to invest in our schools.
WHAT IS A ‘BUDGET-DRIVEN’ APPROACH?
The district has employed a budget-driven approach over the years to lessen the burden on taxpayers and make necessary facility improvements. For instance: An investment two years ago at Bear Tavern Elementary School installed boilers that heat the building with lower gas costs.
While the Board is always exploring funding sources outside the local tax base, the proposed projects in the bond referendum would be nearly impossible to fund within the annual operating budget.
The annual operating budget sets aside funds each year for smaller, necessary repairs such as roofing and boiler repairs.
Since 2016, the district’s Capital Reserve has funded other projects totaling $9.4 million. Those included security vestibules at all schools except the high school (that one was completed with the last referendum); tennis court replacement at the middle school, HVAC improvements at Hopewell, Bear Tavern and the middle school; and paving projects throughout the district.
This reserve acts like a savings account for the district; a commitment by the district board and administration to set aside additional money for facility needs.
HVRSD successfully applied for a state grant to offset costs of replacing the boiler at the High School; that work is planned for summer 2025.
Federal funding related to pandemic recovery paid for a ventilation project at Stony Brook.
BONDS ARE THE WAY A DISTRICT BORROWS
Bonds are the way that public school districts can borrow money. Bonds are sold to investors, and a district uses property taxes to buy back the bonds, with interest.
The ballot acts like a budget promise. By state law, the district cannot spend one cent more on the projects without additional voter approval, and it must complete projects that were on the ballot. That’s why the plan includes a contingency amount in case costs change. This is a commitment to voters that if project costs approach the total that voters approved, the projects would have to be adjusted to fit within the budget.
Since bonds are sold through a competitive bidding process, HVRSD would receive the best possible rate. If voters approve the referendum, the actual interest rate will be known after the district considers competitive bids.
The district’s financial advisors have estimated the interest rate for HVRSD's proposal at 4.25% for 20 years.
Bonds can always be refinanced to secure a lower interest rate down the road.
Many of our school roofs, HVAC equipment and electrical systems need to be replaced now and they will continue to age. Enrollment is projected to increase, and more cramped spaces would disrupt the learning environment that our students need. Delaying projects could pose higher costs in the future, which includes the difficulties of emergency repairs and temporary fixes.