Proposition 2- Supplemental Bond Vote

The District is asking residents to vote upon a $7.0 million Supplemental Bond to complete the 2017 Capital Project. The High School and Middle School Capital Projects are scheduled for the Summer of 2020 thru Summer 2021, however both projects cannot be completed as planned with the current amount of funding.  The reasons are straightforward as to why this shortfall occurred, despite already having cost escalations built into the budget that was approved in 2017.  The highly competitive regional construction market has resulted in much higher bids.  In addition, recent steel tariffs have drastically increased the price of this already-costly material.  A growing number of school districts are being confronted by the same economic forces across our region. We are acting on this now to avoid the prospect of further price escalation.  

Voting for the Supplemental Bond will take place by absentee ballot. All eligible district voters will receive an absentee ballot the last week of May.  Voters will be asked to vote on Proposition 1- School District Budget,  Proposition 2- Supplemental Bond and Board of Education Election. All ballots must be received by the district by 5 PM on June 9, 2020. Also on the ballot will be the Pearl River Public Library Budget Vote and the Library Trustee Election. 

Why does Pearl River SD need to borrow more money to complete the project?

In February 2020, the bids received for the HS and MS Renovations were excessively high.  These new bids caused the budget to exceed the $32.2 million authorized by voters in 2017 by $7.0 million. Therefore, the Board is now seeking additional borrowing capacity to cover this potential shortfall to bring the project to completion.

Why are the construction bids so much higher than originally expected?

Our architectural and construction consultants point to two economic factors for the higher-than-expected bids. One is the market price of steel, which has been rising sharply due to the U.S. government’s recent imposition of steel tariffs. The other economic factor is the large number of major construction projects that are on the drawing board in our region. The demand for construction companies is surging, which has created a seller’s market that allows these companies to charge higher prices for their work.

Did the original budget contain contingencies to address price escalation?

Yes, addressing price escalations and unforeseen conditions is standard for these kinds of public agency projects. Even with that substantial ‘hedge,’ unanticipated excessive market escalation and the tariffs have affected our project.

What capital improvements are being made?

In 2017, voters approved the $32.2 million Capital Project ($29.0 bond referendum) that featured work at all five school buildings.   This included at PRHS: Renovation of science labs, renovation of library; renovation of the fine and performing arts rooms; addition of a new art room, new stairwell at the HS to ease congestion; new multi-sport synthetic filed with lighting, new bleachers, restrooms and concession building, and a security vestibule entrance. At PRMS: gymnasium expansion for a much needed third teaching station; new instrumental and choral classrooms for growing music program; ADA compliance to access gymnasium; renovation of a number of classroom spaces; and a security vestibule entrance. At the Elementary Schools: Secure vestibule entrances; heating and ventilation improvements. 

How much work on the capital project has been completed so far?

Security vestibules at the three elementary schools as well as heating and ventilation improvements; new multi-sport synthetic turf field and track with lighting, bleachers, restrooms and concession building, renovated tennis courts, new access road to the field with ADA parking; HS security vestibule. 

What will be the financial impact on the district’s taxpayers?

In order to finance up to $7.0 million in additional new borrowing capacity, the district’s taxpayers will see a modest increase in their tax levy. The average house (assessed at $200,000) will pay an additional $98 per year starting in the 2021-22 school year.

What will happen if voters reject the supplemental proposition?

Voters have already granted approval to borrow up to $29.0 million, which remains in place. However, if voters do not approve this supplemental proposition, both projects cannot be completed with the current amount of funding. It is likely, then, that the Board would ask voters for significant public input on how to proceed.  This would delay the work being done.

This is due to the fact that both the HS and MS projects are interdependent parts.

Are other school districts facing similar budget challenges with their construction projects?

Yes, a growing number of school districts are being confronted by the same economic forces across our region. In February 2020, Rye Neck SD voters approved a $2.9 million supplemental bond proposition and in December 2019, Bronxville voters approved a $3 million supplemental bond proposition to enable the school districts to complete their capital improvement plan, which had been stalled by higher than-expected construction bids. In addition, two other Westchester school districts that put construction projects out to bid around the same time as Pearl River have received bids that are several million dollars over budget and will likely need to go back to their voters with supplemental propositions.

Why not just reduce the scope of the project?

The projects at the High School and Middle School buildings are interdependent. For example, if the HS art room addition is not constructed, then the former art space cannot be renovated for new math rooms, which leaves the academic classrooms in the music wing.  This would not be optimal.  Furthermore, it does not allow for enough additional dedicated space for band, orchestra and chorus rehearsal and music equipment storage.  In addition, the Board of Education believes that since the original project scope was so overwhelmingly supported by all community stakeholders, moving ahead as planned gives the community the opportunity to see the originally proposed project to fruition. 

Why not just re-bid the project?

Other districts who have recently attempted to re-bid to lower costs were unsuccessful in the current market.   In addition, if the District was to re-bid, the project could be significantly delayed.

Will we need to use all the $7.0 million supplemental bond?

The resolution authorizes a maximum amount of supplemental bond needed.  Borrowing will be done in phases.  The District will only borrow what will be needed.