Derby voters head to the polls Oct. 1 to decide whether to spend $5.9 million to replace roofs at Derby High School, Bradley Elementary, and Irving Elementary.
Polls are scheduled to be open from 6 a.m. to 8 p.m. Polling places will be at the Irving and Bradley schools.
The referendum at this point does not include some $20 million in repairs to the city’s sewer infrastructure, an issue that has been discussed at length for months.
City officials said the roofs on the buildings are either at or have surpassed their life expectancies. Leaks in the roof at one school — Irving, built in 1953 — forced the cafeteria there to close early at the end of the last school year.
While voters in Derby will be asked to fund $5,955,000, the city expects to be reimbursed up to about 70 percent of the cost from the state. The actual cost coming out of Derby residents’ pockets would be about $1,786,000, officials said.
On July 31, city treasurer Keith McLiverty and Derby School Superintendent Matthew Conway discussed in detail how Derby will finance the project, assuming voters approve the borrowing.
The replacement costs break down as follows:
Derby High School
$3.3 million
Bradley School
$1.4 million
Irving School
$970,000
Will This Make Taxes Go Up?
The mill rate on the current budget would increase 0.24 mills if the borrowing if approved. The current mill rate is 35.58.
It would result in a $42 tax increase next year on a house assessed at $175,000.
For a $140,000 house, the increase would be $33.60, and it would be $35.58 for a house assessed at $105,000.
After next year’s budget, the yearly contribution for the school project would decline, but the precise amount per year is tough to calculate since there are so many other variables in a city budget.
The project includes a contingency budget of about $283,5000.
The contingency includes money for items that may not be eligible for reimbursement from the state. One such item — a lightning rod system at Bradley school.
A contingency budget is needed because the state doesn’t reimburse the project until after the bonding is approved by voters and the work is completed.
The idea is to calculate carefully and not be hit with a surprise that would cost the city more money to finish the project, officials said.That’s why the city is planning for a 70 percent reimbursement rate, when it is actually eligible for a 73 percent reimbursement.
McLiverty said that if the project comes in under budget, Derby won’t borrow the full $5.9 million.
“If we don’t need it, we don’t borrow it. But we have to have it so we don’t get caught on the short end,” McLiverty said.
In addition, a building committee will be created to specifically keep an eye on the roof work.
Derby is planning on a “conservative” 4 percent interest rate on a 20-year bond (but there’s a good chance they’ll get a 3.5 percent interest rate), McLiverty said.
McLiverty also advised the city to lock in an interest rate as soon as possible, especially before the bond rates go up (potentially in October) caused by everything from “Obamacare” to sequestration to another round of hitting the nation’s debt limit.
If voters approve the borrowing, the work could start at the end of this school year. The project would bring Derby’s debt ratio to 5.28 percent, up from the current 4.7 percent.
“It’s still a very low debt ratio,” McLiverty said.
Derby School Roof by ValleyIndyDotOrg
The question as it will appear: