AASD taxpayers voice concerns
Residents say tax increases for building project would hurt them
Some taxpayers addressed the Altoona Area School Board on Monday saying members need to think twice about the impact the $88 million school building project would have on them.
“If you want us white-haired elderly to pay, we will die off,” Maryann Hoffer said. She said millennials don’t have the wealth to pay it, and the elderly population is already burdened by higher taxes resulting from the Blair County reassessment.
“People are already talking about selling their homes because their county taxes were raised by the reassessment,” she said.
Jeannie Johnson identified herself during the school board meeting Monday as one of those families who may lose their home.
“Because of the reassessment, I had to go back to work. I’m 67 years old. My husband and I will have to go to government housing if the school raises taxes, too. I don’t know where we will get money for more school taxes.”
Superintendent Charles Prijatelj and the district’s bond counsel John McShane of Boenning & Scattergood responded with a slideshow presentation of “straightforward amortization figures,” that showed the debt of an $88 million project would increase the annual budget by $2 million.
“It’s all about amortization,” McShane said. “How to best fit a project into your budget no matter what your project is.”
Prijatelj made an effort to refute chatter that he said has been circulating regarding the cost and financing method of the project.
Prijatelj presented figures from Boenning & Scattergood summarizing two financing options to pay the project over 30 years.
To pay the $88 million by a level financing structure would mean borrowing $88 million and using the district’s fund balance to help pay the principal annually, whereas a wrap structure entails paying $25 million upfront from the fund balance and borrowing $63 million. That method, Prijatelj said lessens the budget impact of the project and use of general fund reserves. In addition, he said the district is set to receive more than $15 million from the state’s PlanCon.
That means the state is planning to pay 17.36 percent of the total cost.
Prijatelj confirmed that the district would pay more interest at the end of the loan under the wrap method because it minimizes payments on principal for 15 years, but both transaction options amortize relatively the same after the initial 15 years, the presentation showed.
Under the wrap structure, the debt remaining after 15 years would be $62.7 million, according to McShane. The amount would be about $1 million higher at that point if the board chose a level structure, he said.