December 13, 2019

Circumstances favorable for building project, says SAD 37 superintendent

HARRINGTON — SAD 37 has applied to the state for funds to build a new classroom wing and a vocational education wing at Narraguagus High School. State approval of the two building projects would add about 13,000 square feet of instructional area at the school and could increase the school district’s bonded indebtedness by as much as 80 percent.

But circumstances are favorable at this time for school-building projects, according to Superintendent Joseph White. During the 1985-86 school year, when the Legislature’s so-called “circuit-breaker law” went into effect, the annual local share of SAD 37’s bonded indebtedness dropped from almost 31 percent of the annual debt-service payment to about 17 percent. This year, the school district’s local share of the debt service is about 10.3 percent of the total, according to White.

The state-imposed “debt ceiling” for SAD 37 is $15,665,000, a total that represents 10 percent of the current state valuation of $156,650,000 for the real estate in the six towns of the school district.

The total of the school district’s current bonded indebtedness will be $2,332,126 by June of this year, according to White. The sum represents the principal and interest of bond issues for construction or renovation of the district’s five elementary schools. Architect C. Richard Malm of Bucksport, who was hired to design the proposed classroom wing at the high school and to help prepare the application for funds to build the vocational education wing estimated that the two projects could cost $1.6 million-$1.9 million.

During the 1989-90 school year, SAD 37 is responsible for a debt-service payment of $604,800. According to White, the local taxpayers’ share of the current debt service is $62,450, and the remainder is paid by the state.

White itemized the school district’s indebtedness, as follows: Cherryfield Elementary School, $240,000 in principal and $13,080 in interest; Columbia Falls Elementary School, $230,000 in principal and $12,535 in interest; Milbridge Elementary School, one bond issue with $360,000 in principal and $39,825 in interest and another bond issue with $80,000 in principal and $14,500 in interest; Addison Elementary School, $125,000 in principal and $21,531 in interest; and Harrington Elementary School, $815,000 in principal and $380,654 in interest.

The dates of final payment of the principal and interest on the school district’s debt are as follows: November 1991 for the elementary schools in Cherryfield and Columbia Falls, November 1992 and November 1994, respectively, for the larger and smaller of the two bond issues for Milbridge Elementary School, November 1994 for Addison Elementary School and November 2000 for Harrington Elementary School.

White said that SAD 37 benefits from the application of the circuit-breaker law, which provided two ways to compute the local share of a school district’s debt service. Under one method, the state would subsidize the local debt service to the same extent that it subsidizes the so-called foundation allocation for school purposes. Under this method, SAD 37 would be responsible for raising $168,444 by local property taxation to pay the local share of the school district’s 1990-91 debt service, or about 28.5 percent of the total annual debt service.

In fact, according to White, the school district will be responsible for paying only $78,325 or about 13 percent of the 1990-91 debt service of $591.052. This came about through the circuit-breaker provision, under which the state may use a specified fraction of the school district’s state valuation (0.0005 in 1990-91) to assess the local share of the debt service.

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