Contact Person: Kevin G. Null, County Administrator
Date: April 6, 2016
Re: Funding of Southern Middle School Renovations
The Board of County Commissioners wishes to share the following information regarding the Board's decision not to fund the proposed renovation of the Southern Middle School. The intent is to provide the general public with information that the Board considered in making its decision.
The total renovation project cost is estimated to be $39,017,203. Accordingly, the County’s share would be $29,283,483 or 75.05% and the State’s share would be $9,733,720 or 24.95%
Unfortunately, Garrett County is just beginning to recover from the recession and revenue is projected to be flat for the next several years. In order to fund the project the county would have to borrow the entire $29,283,483. This would affect County finances:
1. Garrett County only has $21 million legislative borrowing authority and in order to obtain the “tax- exempt bank qualified rate” (the lowest rate) – the most the County can borrow in a calendar year is $10 million. The County could request authorization from the legislature to raise our borrowing limit for the additional $9 million;
2. The county would be obligated to approximately $1.7 million a year debt payment for 30 years. In order to repay the debt, it would be necessary to raise taxes by 4%.
This could limit the county from funding future capital projects. It would be difficult to do any other capital projects, over the next 30 years, without acquiring more debt and/or rising taxes further.
As a side note, the interest alone over the next 30 years would add another $21 million to the total cost, which would be a total payout of $50.3 million.
The Commissioners are open to funding alternative renovation projects at Southern Middle and, as always, are willing to work with the Board of Education to identify viable alternatives.