As the State College Area School District moves closer to choosing a referendum amount, officials are increasing the focus on cost.
After some preliminary discussion at the Nov. 11 board meeting, Business Administrator Randy Brown and his staff are starting to narrow some of the funding options to allow for an expected board decision on the referendum amount in the next month.
Brown suggested the board set a maximum general fund district allocation of just more than $1.5 million per year. That number represents three-quarters of a mill in the current tax structure.
Previous discussions had looked at lower millage contributions from the general fund, but board members have asked to see funding scenarios with higher allocations.
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“A great number of our scenarios that we’ve been talking about have been at half a mill,” Brown said, adding that the process has been fluid and ever-changing.
The current suggested funding scenarios would put the total referendum tax increase at between 6.44 percent and 7.22 percent with a 5.3 percent interest rate, and between 5.76 percent and 5.95 percent with a 4.75 percent interest rate, Brown said.
If the board commits to a yearly contribution of three-quarters of a mill, the district would have resources to fund $4 million in additional annual debt service for other capital facilities projects outside the high school.
Superintendent Bob O’Donnell said they wanted to make sure they would have enough money remaining to begin work on some of the elementary and middle schools.
The projected tax increases are total numbers and would be rolled out over multiple years. The current district plan would be to borrow the money over three years for construction costs and raise taxes each year to add up to the total increase, Brown said. The referendum tax increase is a separate line item from the annual real estate tax.
The numbers are also just projections because many variables and factors are unknown at this point.
Board member Jim Pawelczyk said he would like to make a decision on the referendum amount as soon as possible so the plans for the school can be designed based on the total funding available.
He said the path forward will be influenced by that decision, and if the district is unable to come up with $115 million the architects would need to look at contingency plans.
“I don’t think it behooves anyone to delay this decision,” he said.
But the majority of the board is comfortable sticking with the original plan to make that decision at the Dec. 16 meeting. Board President Penni Fishbaine said that as more information comes out on design schematics, it could help form board opinions.