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Focused on Financial Stability and Financial Efficiency
Focused on Financial Stability and Financial Efficiency
Research, professional guidance and careful thought were all part of the process that pointed to a bond referendum to position North Caldwell Public Schools for the future. Consideration of educational needs was done through the lens of financial stability and efficiency.
Those important elements played a key role in timing, planning and strategizing. The result was a three-part funding package to enable a $51 million investment.
Capitalize on more than $10 million in state aid for must-do maintenance to reduce the local share of costs. That aid is only available when funding comes through a voter-approved bond referendum. This is a strategic way to replace aging boilers, HVAC systems, and roofing that reduce energy efficiency, require repairs, and introduce risk for emergency replacements.
Contribute toward this investment with $5 million from the Capital Reserve. The Board of Education set aside these funds in anticipation of these needs.
Request voter approval to sell bonds use property tax revenue to pay that debt. The anticipated tax impact would average $895 per year over 30 years on a home assessed at North Caldwell's average.
Cost Estimates
Cost Estimates
Taxpayer Assurances are Built into the Plan
By New Jersey law, a school district cannot spend one dollar more on projects (no matter the source of funds) than what was listed on the ballot without obtaining additional voter approval. North Caldwell’s Board of Education could only spend money on the projects approved by the voters. If those projects are completed under budget, that money has to be used to pay back the bond principal as soon as possible.
The $51 million cost estimate for this proposal includes not just construction, site work and finishing components, but also the professional and permit fees necessary to support them. The state requires that it include a contingency in case costs are higher than estimated, and that’s because the ballot acts like a promise to voters of what would be accomplished with their approval. It will be based on a conservative estimate of bond rates as the district’s financial advisers protect against market fluctuations, and the considerable expertise of Di Cara Rubino Architects, who specialize in school construction.
Funding Sources
Funding Sources
Careful Planning Led to This Funding Package
Proposed improvements are estimated to cost $50,947,399, with about half going to each school building.
A specific type of state aid would reduce local costs. New Jersey collects revenue from across the state to provide this aid, but it is only distributed to districts where voters approved bond borrowing. With this referendum, North Caldwell seeks a slice of that pie. For North Caldwell, that state aid is committed at $10,062,093 – equal to about 20% of the projected costs.
The school district’s Capital Reserve would contribute $5 million. The district handles regular maintenance and smaller-scale renovations every year and reserves some tax revenue for larger capital improvements. This funding is already collected through local property taxes, and now this reserved amount can contribute 10% toward these major renovations.
With voter approval, the district would sell bonds in a competitive market to get the best interest rate. It would use that up-front funding to make long-term improvements – similar to the approach a homeowner might take to renovate a kitchen. Over time, property taxes would buy back those bonds so that homeowners only pay while they benefit from living in North Caldwell.
Local tax impact:
Estimated project costs minus Capital Reserve and committed state aid equals the amount North Caldwell property owners would pay if voters approved the plan.
The amount is calculated on a property’s assessed value, also called Net Tax Value. That is different (and often less) than the market value. In North Caldwell, the mathematical average of home assessments is $790,000, and for that home the anticipated tax impact would average $895.28 per year over the 30-year life of the bond.
To view the "Net Tax Value" of your home, visit this database for Essex County properties.
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