Proposed state budget impacts schools building aid

By DAVID HULSE

ELDRED — With two construction bonds outstanding and another soon to be in place, Eldred Central School (ECS) officials are concerned about new local costs that will be generated by one of the state’s apparent deficit-reduction schemes.

Eldred school board members last week approved a contract with an engineer firm, Foit-Albert, to repair structural problems in the walls of the MacKenzie Elementary School gym. No cost estimate has been made for this work.

Superintendent Candace Mazur said the project could also include plumbing and other building repairs at the Eldred secondary school. The work would be bonded with a referendum to take place in November.

The bonding apparently comes at a time when Pataki administration officials have tried to reduce the state’s cash outflow by manipulating its amortization, its annual rate of payment for school construction aid, ECS Business Manager Lorelei Case said.

If the state budget is adopted with these provisions, this means that building project aid will be paid, but over a much longer period. Take the $5.4 million ECS bonded to pay for MacKenzie originally. It was bonded to amortize over 15 years and there are seven years left. ECS would make annual principal and interest payments of some $520,000 through 2010 and under past procedure, $197,000 of that annually would come from state aid.

But now the state has stretched out aid payment from seven years, to 22 years, which drops the state’s annual aid share to $84,000 through 2025. “We’re already short $113,000,” Case said.

To cover litigation costs, ECS bonded $364,000 three years after MacKenzie opened. That bond calls for repayment of $76,000 annually, of which aid has, in past, covered $29,000. Under the new formula ECS would get payments for another 28 years, but only $2,000 annually. Case is seeking a waiver on the second bond.

Under the proposed policy, all construction is considered to have 30-year life span. New bonds will have aid-based floating rates, with an estimated interest rate in the first year, but adjustable, by the state, after ten years. “It’s impossible to budget that formula. “It’s very unfair for a district like this,” Case said.

It could be worse, she added. ECS has a relatively low construction aid ratio, only 38 percent. “This is really going to be tough on districts who have depended on much higher rates of state aid,” she said.