ERMA – Voters in Cape May, Lower Township and West Cape May will be asked to approve a $13.9 million bond Jan. 25.
The funds will be used for HVAC projects at Lower Cape May Regional (LCMR) High School and Richard M. Teitelman Middle School.
District officials say the new debt will not raise resident tax payments. They also note that the projects will receive 40% of their funding from the state. The district must bond for the full amount of the projects and the state makes annual reimbursements up to the 40% level.
The lack of impact on the tax bill comes courtesy of the fact that the district is retiring old debt at the same time that it is taking on the local share – $8.3 million – of the combined new projects. Another factor is the application of $1.7 million in federal Covid relief funds to the projects.
The district’s financial advisors project an interest rate for the 20-year bonds at 3.5% by the time the bond issue is ready. Interest rates today would be lower, but they are rising.
During a town hall presentation Nov. 17, residents were assured that the 3.5% projection is conservative and that the actual interest rate at the time of the bond sale may be lower. A video of the town hall presentation and a copy of the presentation slides are available on the district’s website.
The project at Teitelman involves a new roof, replacement, and addition of HVAC equipment and electrical construction to provide the necessary infrastructure. The estimated cost is $7.8 million of the total $13.9 million.
The original building was built in 1974, with the second story addition in 1995. Officials say both the roof and the HVAC equipment are at the end of their useful life.
The LCMR High School project will include replacement and additions to HVAC equipment, along with the associated electrical construction, for an estimated $6.1 million of the total. The original high school building dates to 1960. There have been additions over the years, with the most recent being the auditorium in 2000.
The pandemic has shown the importance of modernized ventilation in schools. This makes the projects candidates for the use of pandemic relief funds. Indoor air quality had a spotlight placed on it as a factor in the ability of schools to maintain in-person instruction.
With the 40% state contribution, the local share for the two projects is estimated at $8.3 million. Old debt will be retired prior to the referendum. Assuming that the renovations are approved, the debt level for the district remains almost exactly the same as prior to the referendum.
In fact, the district’s advisors project that the debt level will decrease slightly, with respect to taxpayers in all three of the regional district’s municipalities.
The referendum takes place Jan. 25, from 4 p.m. to 8 p.m. Polling locations are listed on the district’s website.
To contact Vince Conti, email vconti@cmcherald.com.
