Pelham Board of Education Bond Facts: Not So Much

There's no persuasive argument against school construction. That's pretty much impossible. One person says, "You are anti-child!" and it is all over, but that doesn't mean you can believe everything the board of ed says.

The affluent white suburb where I live is facing a decision to replace a 100 year old elementary school building, and the board of education is cooking up a scheme to issue debt to get the hammers hammering. The only problem is that Pelham, New York is at the vortex of multiple competing challenges.

1. Even in this homogenous tony New York suburb, there are overcrowding problems, and re-drawing district attendance lines to fix that will cause a furor because nobody wants to go to school "over there". Uber middle class versus upper middle class, separated by railroad tracks, a classic American tragedy.

2. Property taxes are embarrassingly high. $20k per year for a modest 3 bedroom house is common.

3. Westchester County, in which the school district is located, is the highest property taxed county in the USA.

4. Congress just capped the deduction on state and local taxes at $10k, effectively increasing the amount you need to earn to pay the same old bill, by up to 25%.

Nearby boards of education have had bond referenda fail, recently, and there's little wonder why. That's not stopping the Pelham, New York Board of Ed from pursuing the approval by voters of an aggressive capital plan. New building: $42 million, $80 million for the whole plan, although the final all-in amount is still unclear.

In 2017 the board began marketing its plan to replace the Hutchinson Elementary School ("Hutch"), and other projects. Apparently, in its zeal to shove a bond referendum under the noses of the voters, it based its pitch on misleading information.

In the January 23, 2018 board meeting, the district's business manager, Jim Hricay explained that the New York State Ed Department awards Building Aid to offset construction costs over 15 years for renovations, and over 20 years for building additions. The board considered multiple construction remedies, including one or more that would qualify for building aid as an addition. Their central argument for replacing Hutch with a new building is that it's less costly on a per year basis to finance a building replacement using a 30 year bond, rather then to renovate under a 15 year bond.

The obvious false premise is that even if that if it's less money per year, 30 years is longer than 15 years, and the aggregate cost is higher by far. The board of ed further misrepresents the facts on the district Web site FAQ, stating that "renovations can only be financed over 15 years". Hricay explained that the district can set the term of the borrowing but the State Building Aid will be disbursed over 15 years for renovations, or over 20 years for additions, regardless.

School board member Peter Liaskos called it out (video above). A longer borrowing could pull the annual debt service into a more acceptable range for already overtaxed homeowners. There are better options than the ones the board has considered.

My Recommendations

1. Fix the Web site to reflect the facts.
2. Stop making false and misleading statements, and make a clean, honest case to replace Hutch.
3. Use the next 12 months to assess the impact of the 2017 tax law changes on residents.

I realize school board trustees are volunteers; however, superintendents, business managers, bond attorneys, accountants and architects all get paid in tax dollars. Board: Make them work for it, please. Come up with a better plan.