Avon High SchoolProposed

Renovations and Additions

September 7, 2006

Tonight’s program

• Overview of Project

• Question and answer session

Overview of Project

• Why are we here• What has happened since June 2005• Why Project is still needed• What’s included in Project• Project cost comparisons • Projected tax impact • Consequences if referendum is defeated• Revised timetable

Why are we here?

• Followed previously used process– Referendum based on schematics ($50,000)– Final architectural drawings ($1 million)

• Process successful the last 10 years

• Not successful this time due to conditions beyond control of Building Committee

• Need still here due to present and future high school enrollment

What has happened since June 2005?• Final architectural drawings developed• Project size unchanged

– 67,500 sq. ft. of additional space– 13,500 sq. ft. of renovated space

• State approval– Submitted in December– Approved in June

• Bid process• Guaranteed maximum price• Need additional $4.7 million

Why Project is still needed

• Current and projected enrollment exceeds building capacity– Additional classroom space needed to

accommodate increased enrollment (from 900 students to 1,300 students)

– Additional space needed in core facilities such as cafeteria, gymnasium, library to accommodate increased enrollment

(designed for 600-650 students; not increased in 1997 project)

Grade 9-12 Enrollment

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200

400

600

800

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1400

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Actual Enrollment Projections

What’s included in ProjectNew construction—

11 General classrooms 1 Computer lab

2 Science labs 3 Special education classrooms

Gymnasium and team locker roomsCafeteriaInstrumental music roomExpanded fitness/weight room

What’s included in ProjectRenovated spaces—

Kitchen and serving area

Nurse’s office/clinic

Student support services(Psychologist, social worker, occupational therapist, speech and language therapist)

Four stairwells

Four lavatories

Hallway fire doors

What’s included in ProjectCapital improvements—

Re-roofing existing buildingReplace existing gymnasium floorStage curtain/riggingRefurbish/replace lockersReplacement of HVAC unitsUpgrade to video/audio/data

infrastructureNew food service equipmentAccessibility of football field bleachers

Floor Plan

Project cost comparisonsBudget GMP

4/1/2005 8/2/2006

Asbestos abatement $20,000 $125,000

Site development 3,028,400 3,500,000

New construction 13,999,500 16,719,835

Renovations 1,426,100 2,825,780

Capital improvements 2,308,000 2,115,000

Building permits 4,000 3,800

Construction Manager fees 450,000 536,135

CM reimbursables 800,000 1,048,800

CM contingency 962,000 600,000

Total construction costs 22,998,000 27,474,350

Owner's soft costs 3,000,000 3,223,650

Total project cost 25,998,000 30,698,000

State reimbursement (6,408,614) (7,147,512)

Net cost to Avon $19,589,386 $23,550,488

Causes of increased costs

• Rapidly increasing materials costs

• Material availability

• Increased energy costs

• Unexpected construction requirements by SDE

• Revised timing of project

Issues for the Board of Finance

• Can the Town manage the additional debt?

• If so, what will the additional and total tax impact be on each household?

Financial facts & figures

• Avon’s Grand List is $2.2 billion

• Town collects 99.97% of property taxes

• History of aggressive pay-down of debt

• Avon’s triple A bond rating

Outstanding Debt (as of July 1, 2006)G.O. Bonds (Long-Term Debt)

FY Beginning Original Debt FY Ending

Date Purpose Issue Outstanding Maturity1/15/94 RBS Renovations $5,670,000 $1,200,000 20099/15/97 AHS Renovations 4,300,000 1,760,000 20129/15/97 APD Renovations 1,800,000 740,000 20121/15/98 AHS Renovations 5,825,000 2,700,000 20127/15/98 AHS Renovations 6,915,000 3,765,750 20137/15/98 Sewer Interceptor 550,000 299,250 20137/15/02 Fisher Farms Open Space 1,295,000 932,000 20167/15/02 Thompson Brook School 14,245,000 10,163,000 2016

TOTAL BONDS………… $40,600,000 $21,560,000

Outstanding Debt (as of July 1, 2006)Bond Anticipation Notes (Short-Term Debt)

Note FY Beginning

Original Debt FY Ending

Date Purpose Issue Outstanding Maturity

3/26/03 M.H. Rhodes $1,500,000 $1,000,000 2007

6/20/05 AHS Ren. $9,000,000 9,000,000 2007

Total Notes……… $10,500,000 $10,000,000

Statutory Debt LimitationJune 30, 2006

The Base is the total tax collections, including interest and lien fees, received in the previous fiscal year.

The Base for Avon is $51,988,605.

Statutory Debt LimitationJune 30, 2006

Comparison of Debt Limitations with actual Avon Debt: Gen. Purpose: 2.25 x Base = $116,974,361 $5,112,000

Schools: 4.50 x Base = $233,948,723 $50,398,984

Sewers: 3.75 x Base = $194,957,269 $293,156

Combined Max: 7.00 x. Base = $363,920,235 $55,804,104

This includes debt actually incurred (as shown on pages 17 and 18) and debt authorized but not yet issued.

Financial facts & figures

• Town will use a mix of Bond Anticipation Notes (“BANS”) and Bonds

• Town has flexibility in scheduling principal and interest over the life of the loan

Debt Service Impact Existing and Proposed High School Renovations/Additions

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500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

5,500,000

6,000,000

6,500,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Fiscal Year Ending June 30

Ann

ual D

ebt S

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Existing Debt

Existing Debt PlusAHSRenovations/Additions

Potential upcoming projects(rough cost estimates, subject to revision)

Town Hall Bldg. Renovations $2,000,000 (est.)

Library Expansion $7,500,000 (est.)

Fisher Meadow Ball Fields $1,000,000 (est.)_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Fire Station/Training Facility $5,000,000 (est.)

Secret Lake Water Mains $1,500,000 (est.)

Open Space Preservation ? ??

New Elementary School ? ??

Financial facts & figures

• Debt service in the FY 06-07 budget:

$5,038,337

• Annual debt service will peak at $5.5 million in FY 08-09 and then decline

• This level of debt service is manageable and will not jeopardize the Town’s credit rating

Factors in tax impact statement

• Estimated interest rate (5.36%)

• Life of borrowing period (19 years)

• Frequency of revaluations (5 year cycle)

• Potential for Grand List growth over life of borrowing

Property statistics

• About 6,600 houses and condos in Avon

• About two-thirds have an estimated market value of $400,000 or lower

• Median assessed value is $202,470

Selection of model properties

• Based on assessed valuation, not market or desired sales price

• Assume assessed value will increase at same rate as Grand List following each 5-year revaluation

• Then model properties at 25th, 50th and 75th percentiles

If Project is approved: tax impact over 19 years

Property Assessment Percentile:Adopted Proposed Total Avg./

2005 2006 Cost Yr.

25th $1,755.82 $357.23 $2,113.05 $111.21

50th $2,419.69 $492.29 $2,911.98 $153.26

75th $3,450.22 $701.95 $4,152.17 $218.53

Tax impact example

Estimated market value of home $285,715

Home taxable assessment $200,000 (70% of estimated value)

Tax impact over 19 years—Adopted 2005 $2,390.18Proposed 2006 486.36

Total $2,876.54

Average per year $151.40

Determine your own tax impact over 19 years

Total proposed borrowings —

Multiply your assessed value by

Adopted Proposed Total

2005 2006

.011950 .00243 .01438

Additional operating costs

Added space costs—Utilities, custodial/maintenance, insurance

First year after construction $425,000

Each subsequent year $ 11,000

Added educational costs—

Teaching personnel, instructional materials and supplies, equipment

Average annual increase $340,000

Consequences if referendum is defeated

• Six portable classrooms needed in fall 2007; more in future years

• State does not reimburse for portable classrooms• Capital improvements will be capital projects in future• Core spaces cannot accommodate increased enrollment

(library, cafeteria, gymnasium)• Significant additional architectural fees and other costs

for changes in scope and redesign• Increased construction costs are highly probable• State reimbursement may be less in the future

Revised timetable

• October 11, 2006—Referendum6 am-8 pm at Avon Senior Center

• November 2006-summer 2007—Construction of cafeteria and gymnasium

• Summer 2007-spring 2008—Construction of new classroom addition

• Late spring 2008—Project complete

Avon High SchoolProposed

Renovations and Additions