On February 28, 2024

Why building a new school is easier on taxpayers vs. renovating

Dear Editor,

Vermont’s school financing system is incredibly complex, and that means it can be difficult to make a decision that you feel good about. No one wants to spend money if it’s not essential. The question is, how do we know what’s essential and what’s not? It’s not an easy thing to answer.

The challenge is that in order to make a decision you feel good about, you need to understand some of the complexity around the bond and the way this state approaches education financing. This letter is my attempt to provide voters with the information you need, as simply as possible. I’ve worked with Ben Ford, vice-chair of the Mountain Views Supervisory Union (MVSU) board, and others on this post to ensure it is as accurate as possible.

Woodstock Union’s 96.7 FCI rating, what it means

One of the things tossed around a lot is the 96.7% Facility Condition Index (FCI) rating our school received from the state in 2022. What does that rating mean?

The FCI is a metric the state developed to measure the “depletion” level of school facilities. It is a scale of 1 to 100, where 1 is the least depleted and 100 is the most depleted. Our high school building was found to have a 96.7% FCI. To the state, our school is on its last legs.

Read the MVSU FCI report here: Tinyurl.com/WoodstockFCI.

Why is this important for you to know? You’ve probably heard that the legislature is looking to restart school construction aid after a 16-year hiatus?

There’s a catch for us, however. While the state is very likely to reinstate funding for school construction and renovation, on Feb. 1, the School Construction Aid Task Force announced new standards indicating that buildings with an FCI of 65% or above will not be eligible for aid. In other words, Woodstock will not be eligible for renewed state construction funding IF we opt for the renovation route.

It doesn’t matter whether you or I think renovation is the way to go. What matters is the 96.7% FCI disqualifies us from state aid.
It’s hard to argue with this policy taken by the state. In fairness, it offers three key benefits to all state residents, including us:

  1. Cost effectiveness
    Vermont’s policy of not funding renovations for buildings with FCIs of above 65% is simple: Such facilities are more expensive in the long run. The higher the FCI rating, the more extensive and costly the renovation would be. By setting a threshold, the state wants to ensure that its funds are invested in projects that offer a reasonable balance between the cost of renovation and the expected benefits, such as extended building usability and safety improvements.
  2. More efficient use of resources
    By prioritizing buildings that are in a better state of repair (i.e., those with a FCI of 65% or below), the state can maximize the impact of its investments, ensuring that a larger number of students benefit from safer and more functional facilities. This approach prevents the allocation of excessive funds to projects that may not be justifiable in terms of cost versus benefit.
  3. Better long-term planning
    The policy encourages long-term planning and maintenance. Knowing that buildings with a very high FCI will not qualify for state funding, school districts might be incentivized to maintain their facilities regularly to avoid reaching such a critical level of disrepair. Prevention and timely maintenance reduce the need for extensive and costly renovations.

Renovation vs. new build impact on taxpayers

How much will it cost to renovate the building and how will it affect you, the taxpayer? In 2023, state inspectors conducted a visual walkthrough of the school and quoted a minimum of $16 million. Was the board surprised by that high number from just a mere walkthrough? Not at all!

Back in 2017, the MVSU board engaged an architect and a multi-disciplinary team of consultants to conduct a comprehensive review of the school’s conditions and to approximate how much it would cost to do an effective renovation. The estimated cost all those years ago was $51 million. With inflation, that price would be closer to $75 million in 2024 dollars.

Remember, our FCI of 96.7% means we won’t qualify for state aid. If we wanted to renovate, we’d need to fund the full cost by a bond.

At the Feb. 20 Select Board meeting, Jon Spector, EDC chair, pointed out yet another painful wrinkle: by law, a state bond to fund school renovations have a maximum term of 30 years or the expected life of the building, whichever is less. That means we don’t have the option of spreading out repayment of the bond over a 40-year period as we can for a new build.

Attrition will have a scary impact on our taxes

There’s another challenge to renovation that Ben Ford demonstrated at the Feb. 20 Select Board meeting: attrition.

A renovation will be messy and noisy, and the disruption will go on for years. No parent wants to subject their children to those conditions, and many will opt to send their kids elsewhere. It’s not unreasonable to assume that we will lose 10 kids each year over the 10-year period it will likely take to complete the renovation.

Let’s make some assumptions. Let’s say that the cost of renovation is $16 million (an unrealistic number, but we’re making a point here). Let’s further assume that we lose 10 kids per year for a decade. How will that affect our taxes?

We will lose $2 million a year from the state for our declining number of students. In year one we’ll lose $2 million, in year two it will be $4 million, and so on. By year 10 of a 30-year bond for a $16 million renovation we’ll pay higher taxes than building a new school with flat enrollment!

Yes, you read that correctly. A $16 million renovation project that drags on for years and prompts kids to go elsewhere will lead to us paying higher taxes than if we were to build a new school — even if we don’t grow enrollment. Pop those numbers into the calculator on the new school website to see for yourself.

You can access it here: Mtnviews.org/breaking-new-ground (page down to the “download the tax calculator” button). And then remember that the true cost of renovation will be around $75 million. Combine that with the loss of state aid and you’ll see it’s unaffordable.

Let’s be the “hub”

Okay, but would we qualify for new construction state aid, you ask? On Dec. 20, 2023, the State Board of Education established new square-foot standards for the School Construction Aid Program. Those standards require construction costs no higher than $654 per square foot. Ours is $627.

Another factor in our favor: The School Construction Aid Task Force has signaled a preference for building new schools (as opposed to renovation) and further consolidation. This is a framework known as “Newer and Fewer.”

High schools are expensive to build, so the fewer the better as far as the state is concerned. In the quest for consolidation, new and safe schools will serve as “hubs” to surrounding towns.

This policy could really benefit Woodstock as our consolidated school meets the requirements for being a “hub.” And in fact, on Feb. 16, the state approved Woodstock as a “hub.” This answers the question: If we build it, will they come? Yes, because we’re the “hub.”

And when they come they will lower our taxes.

The bottom line

Given our 96.7% FCI and the limits it imposes, a new school is inevitable. A renovation is an expensive, short-term fix that won’t negate the need for a new school.

And the fact that our square-foot cost is below the state’s recommendation is proof positive that the school board has created a school design at the lowest possible cost. The idea that we can build a school for half the price is wishful thinking. Understandable, but wishful.

It really comes down to this: We can pay $99 million for a school in 2024, or we can pay significantly more by kicking the project down the road.

Susie Stulz,
Woodstock Village

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