Superintendent explains tax wording in capital project legal notice
HANOVER — Superintendent Todd Crandall has begun making the rounds to organizations and boards within the Silver Creek School District in preparation for the March 20 vote on a proposed $17.6 million capital project.
Along with educating the voters on the details of the project, Crandall has continuously made it a point of emphasis that if approved, the project will result in no added taxes for district residents.
That assurance was challenged during a Hanover board workshop by a resident when she quoted from a legal notice published in a Jan. 31 edition of the OBSERVER.
It reads: “…and be it further resolved, that a tax is hereby voted to finance the balance of the estimated maximum cost of the Project in an amount not to exceed $16,200.00, such tax to be levied and collected in installments in such years and in such amounts as shall be determined by the Board.”
The notice goes on to say that the “NY State Building Aid, EXCEL, and Native American Aid funds expected to be received by the District are anticipated to offset a substantial part of such costs…and reduce the amount of taxes herein authorized to be levied.”
The concerned resident wanted to know if no tax was going to be added to fund the project, why did the legal notice seem to say otherwise?
Although Crandall didn’t have an immediate concrete response to the resident, he assured her and others at the workshop that he would check in with his financial advisors for an explanation of “the complicated legal phrases contained in the legal add.”
Crandall responded the following day in an email:
“Most of the cost of the project will be aided by New York State in the form of building aid. The balance (or the ‘local share’) of the cost will be covered from other sources (Native American Aid and capital reserve funds) that do not trigger an increase in the local tax levy.”
Under local finance law, Crandall explained that, “because the district must ‘front’ the cost of the project and then receive state aid over a period of years, it is necessary for the district to issue notes and bonds. The district (and its voters) must give an iron-clad promise to stand behind those bonds and notes.
“So, by law, the voters must approve a tax in the full amount of the bonds to be issued. But that tax would only be triggered if the state were to renege on its promise to aid the project. Although this is theoretically possible, it is very difficult to imagine such a scenario.”
Crandall said that the district’s bond counsel and financial advisory firm are not “aware of any situation in which the state ‘changed the rules’ or ‘pulled its promise’ after a project was approved.” Rather “In order for the notes and bonds to be valid under the (law), they must be backed up by the full taxing power of the district. That is why the wording in the legal notice reads as it does.
“We fully expect the approved tax to be offset in full by the building aid that the state has promised, and delivered, to us and to school districts across the state for decades.”
To find more information about the proposed capital project go to http://silvercreekschools.org/capital_project_2018.