Northeastern high school overhaul could boost taxes for years

Northeastern High School in Manchester, Tuesday, Oct. 30, 2018. Dawn J. Sagert photo

The Northeastern school board could approve a $100 million renovation project this year that would be funded by nearly a decade's worth of annual tax increases.

Renovations to the district's high school are badly needed after more than 60 years without any major updates, school officials said. And though project costs were reduced significantly from earlier projections, the district would still need to increase taxes each year to manage its debt from the bill.

"The proposal is to slow down the ship so the financing is in line with the construction ideas," Director of Operations Brian Geller said.

The district has proposed spreading the tax increase across the nine years of the project because raising taxes to the adjusted Act 1 index all at once is not fiscally responsible, he said. 

"I definitely have reservations about the cost of the project and how it fits into the overall operating budget of the district," said board member K. Mike Redding.

Geller said a 0.22 increase to the district's 26.25 millage for 2019-20 would be up for approval as part of the final budget June 3. The district had previously planned on a 0.16 millage increase next year, which was part of the preliminary budget approved Monday. 

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Redding said he would like to see a public meeting held specifically to discuss the high school project, as the multi-year millage increase would be in addition to another annual increase the district is considering to support the operating budget.

"And then on top of that, any millage increase that we may need to do because of a recession or something like that that may cause a revenue shortfall," he said.

Lloyd Douglas, of Conewago Township, said during public comment that it's hard to find any information about the renovations online.

The York Dispatch emailed board members about the project and proposed tax increase, but none responded before deadline on Thursday.

Dale Knepper, director of buildings and grounds at the district, said at the district's May 6 work session that other than a junior high annex addition built in 1963, there have been almost no updates to the high school building since its construction in 1956.

The building, including parts of the roof and electrical system, remains relatively unchanged, unlike most of the district's elementary schools — which were overhauled in the 1990s, he said.

Knepper said he thought the building had too many issues to salvage, but the architect said it was “too good to throw away." If the district is going to spend money to repair it, however, Knepper wants it to last for decades.

More: Northeastern board hears $80M-plus options for high school project

Plans were originally heard from Berks County-based Kautter & Kelly Architects in February 2018. Peeling paint, dark corridors, lack of accessibility and additional security risks were factors in three options presented, ranging from $80 million to $170 million.

An updated plan was presented the following February, with estimates coming in at $82.37 million, but cost savers — including changes in lighting and windows, reduction in seating capacity and simplification of mechanicals — presented to the board Monday, May 6, brought them down to about $71 million.

All told, the project budget comes in at about $99.5 million after related costs are factored in, said engineer Bob Sells, of Barton and Associates.

The three projects included in the renovation plan will be presented as a report at the district's May 20 board meeting, but a vote is not yet scheduled, Geller said. 

The first project would include a new cafeteria and common space that connects the annex to the original building, and renovated classrooms, according to the architect.

Project No. 2 would renovate the music suite, theater area, auditorium, gym, library and administrative suite. No. 3 would be a renovation of the annex — renovated classrooms, a new technology education wing and relocation of the existing wing.

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James Schlesinger, municipal adviser to the district from Public Financial Management, presented a plan Monday for managing the district’s debt. 

The plan would include using about $10 million from the district’s capital reserve fund, phasing in financing structures over time and setting a tax increase of 0.22 mills each year through 2029.

Northeastern has to maintain its current debt service plan of about $5 million each year through 2032 to cover its almost $56 million debt. The new project would use a wraparound structure to phase in about $31 million to that debt in 2021, about $20 million in 2022, about $10 million in 2025, and about $28 million in 2027.

This averages to about $300,000 added each year, Schlesinger said, if the district commits to the approximately 0.22 annual millage increase.

If the project is approved this year, Geller expects bids to come in around the fall of 2020.