High School Addition

Given the state of the economy, I have had some community members question why the school district is still moving forward with the addition to the high school. The Board feels strongly that although the national and local economy is down, for a number of salient reasons, this is the ideal time to be constructing this addition.

1. The HS Addition Does Not Increase the Tax Rate
The terms of our agreement with Exelon essentially cap our tax rate. Therefore, the construction of the addition will not increase the 2008 tax rate (which is the lowest in Grundy County, and one of the lowest K-12 rates in the State), nor will it be the cause of any increase in the tax rate for the next four years. We were able to accomplish this by stretching our debt out from twelve years to twenty years. The argument for this is that the high school addition will prepare us for future growth, and by stretching the debt out, those who move in and cause the need will help to pay for the cost of the addition.

2. Bidding is More Competitive Than Ever
Because so many of the trades are out of work, bidding for our construction project will be more competitive than ever before. Wilmington School District recently accepted bids for some remodeling projects they are completing, and they had over 75 companies participate in the bid process. The more competition there is for the bid, the better prices we will receive, which results in savings to our taxpayer.

3. Increasing Cost of Construction
Our construction management team continually reminds us that the cost of construction is increasing at about 10% per year. Our current HS addition project will cost about $27 million, which means that if we waited a year, the cost would be pushing $30 million, and the next year $33 million and so on. Everyone I have spoken with is in agreement that we will need an addition to the high school in the next five years. If that is the case, it does not make fiscal sense to wait.

4. Impact of Dresden
Currently, the Dresden Nuclear Power Station is responsible for paying 65 cents of every dollar we collect in tax revenues. This means that for at least the next four years, Exelon will pay 65% of our bond payment to pay for construction. We are hopeful that at the conclusion of this current agreement, we are able to negotiate another positive tax agreement for our school district. However, in the short term, it makes sense to have Exelon pay as much of the bill as possible.

5. Local Economic Stimulus
By putting $27 million of work into the economy, we are hopeful that many local tradespeople will be put back to work. In the construction of the ECC, even if a local company didn’t receive the bid, they still hired mostly local laborers for the workforce. These potential jobs should not only have a positive impact on the families of these workers, but should also provide a stimulus to our local economy as well.

It is for these reasons that the Board is still moving forward with this necessary project. We still hope to go out for bids in late March or early April with ground-breaking over the summer.

Dr. Bugg