Schools $1.8 million under projected cost
With construction finished and occupancy certificates in hand, the Concord School District yesterday released the estimated final costs of the three new elementary school buildings opening next week.
Abbot-Downing School on South Street, Christa McAuliffe School downtown and Mill Brook School on Portsmouth Street cost $53.2 million to build, $1.8 million less than the $55 million bond sold in 2010, and $8.8 million less than the original budget of $62 million.
The $53.2 million includes estimated final invoices for furniture and landscaping, and includes $2.1 million in upgrades to materials the board chose at the beginning of construction to increase the longevity and sustainability of the buildings, according to Jack Dunn, district business manager, and Matt Cashman, director of facilities and planning.
This spring, the board committed to spending $1.5 million of the $55 million to renovate the former Dewey School building to be the permanent home of the district office.
Before construction began, school district officials estimated building costs alone could be as high as $62.5 million and in 2010, the board authorized borrowing up to that amount.
"Timing, economies of scale, a depressed construction market, favorable bond market, detailed drawings, planning and oversight by district staff and the board contributed to lower construction costs," Dunn wrote in a statement on the budget.
"When I look back over the past five years. . . one of the best decisions we made was hiring Matt," said Concord School Board President Kass Ardinger, pointing to Cashman's experience in private sector construction projects.
"Change orders alone on a project like this can result in a school district going way over budget. We've seen it happen elsewhere in the state and it didn't happen here."
With interest payments, the cost of purchasing land around the new school sites, and construction, the total bill for the new schools adds up to $90.8 million. With the state building aid program paying 43 percent of most costs, the district's bill is $31.35 million in principal and $33.4 million in interest.
The three buildings are the culmination of a decade-long conversation about reducing operating costs and creating equitable educational opportunities across the district. When they open for class next Tuesday, the district will complete a move from eight elementary schools to five.
In 2005, the Concord School Board voted to raise $3.2 million each year for current debt and future projects. As the district paid off debt, the difference between what it still owed, and the $3.2 million cap went into a savings account for the eventual elementary school project. That fund will be drawn on to keep the tax impact as low as possible, board members said.
In 2011, the owner of a house assessed at $250,000 paid $240 for the $3.2 million debt-and-savings payment.
The elementary school construction project will increase the district's debt level for three years, 2014-16.
In 2014, the debt portion of the tax bill for the same $250,000 house will be $312.50, an increase of $72.50 due to the project.
In 2015, the debt portion of the bill will be $337.50, an increase of $97.50 over current levels, due to the project.
In 2016, it will be $250, an increase of $10 over current levels, due to the project.
After 2016, barring any future bonds, the district debt will return to $3.2 million and gradually decrease.
The projected tax impact calculation doesn't include the potential effect of using the bond premium - about $1.9 million the district received because of favorable market conditions when it sold the construction bond in 2010.
The premium is not a loan the district needs to repay, and there is no interest to pay on it, Dunn said. Under federal restrictions, the premium can either be used for further construction projects with no additional tax impact, or to pay down the principal of the bond after all of the work on the project has been finished, he said.
If the board votes to use the premium to lower the principal, the tax impact of the project could be erased entirely, said Ardinger.
(Sarah Palermo can be reached at 369-3322 or email@example.com or on Twitter @SpalermoNews.)’