North Penn Facilities Proposals Could Place School District in $515 Million Debt

Keith Heffintrayer•

Pennfield Middle School.

North Penn School District held a public forum on Tuesday night at Pennfield Middle School, regarding four facilities proposals that could reshape the district both educationally and financially.

With more than 100 people in attendance, plus additional viewers on television and through Facebook, district officials made their case for each of the four proposals, detailing the needs of each facility, associated costs and plans for financing. No action was taken on any items during the meeting, but should the four proposals go through as presented, the district would take on more than half a billion dollars in debt, payable through 2048.

We have broken down each proposal below.

Knapp Elementary: Proposed cost - $25,669,153

The plan for renovating and upgrading Knapp Elementary is currently in the design development process, with construction beginning in April 2020, phased renovations from Jan. 2020 through July 2022, and completion set for some time between June 2022 and August 2022.

The renovations will focus on site improvements, as well as updating the building, electrical, HVAC, plumbing, safety and technology systems. The project will also add six new classrooms, which would allow them to get rid of the modular classrooms currently in use.

Architect David Schrader, whose group was awarded the contract in February, also stated that one of the possible design features would be the construction of a bus loop, in the hopes that it would relieve congestion by separating car and bus traffic.

Currently, $20 million for this project is available via bonds that were issued by the school district in Dec. 2018 and March 2019.

Crawford Stadium: Proposed cost - $5,200,000

The proposal for the stadium renovation includes widening the field and replacing it with synthetic turf, expanding the running track, adding additional lighting, expanding the entrances, improving ADA access and restrooms, new team rooms and more.

Construction for the project would begin in Nov. 2019, with substantial completion in June 2020 and final completion in Aug. 2020.

"Substantial completion means that we can safely use the facility for graduation, even though there will be some items that aren’t completed at that point,” said Scott Kennedy, Director of Facilities and Operations for North Penn School District.

Financing for this project would come from the district’s capital reserves fund.

"No additional debt would be needed for the Crawford Stadium Project,” said Steve Skrocki, North Penn School District CFO. "Money is in hand in the capital reserve fund for that project.”

Ninth Grade Center Addition to High School: Proposed cost - $71,612,428

A good portion of Tuesday night’s discussion centered around removing ninth grade from the middle schools, and placing the students in an addition at the high school.

Assistant Superintendent Todd Bauer stated that such a move would add equity via giving ninth grade students early access to academic and athletic programs, as well as social and extra-curricular opportunities.

"If you have ninth grade at three schools and you can consolidate that into one school, you can increase your efficiency,” said Bauer.

District Superintendent Curt Dietrich added that resolving the issue of ninth grade was a focal point, as it would allow the district to design a plan of action for the middle schools.

"To be fiscally responsible through all of this, we’ve determined that we need to settle the issue of ninth grade before we can decide what we will be doing at the middle schools regarding modular and air conditioning, whether it’s two schools or three schools,” said Dietrich.

Dietrich stated that fixing Penndale Middle School could cost upwards of $70 million, but if the ninth grade addition to the high school is approved, the district may be able to close Penndale and go to a grade seven-through-eight alignment at Pennfield and Pennbrook middle schools to save money.

Dietrich also stated that most high schools around the country are in a nine-through-12 alignment, and the district currently struggles to meet the needs of ninth grade students who need access to high school programs and offerings.

Though officials said that most students they spoke with were in favor of the move, they added that the proposal is not without drawbacks. Adding ninth grade to the high school would put the student population at roughly 4,000, which could add to both congestion in the hallways and traffic outside, and it would also widen the age gap between students.

The design proposal that was shown was a 200,000-square-foot addition to the high school, that could both serve as a segregated ninth grade center, or be fully integrated into the high school via a nine-through-12 alignment. In either case, the addition would share facilities such as the cafeteria and medical with the rest of the school, but it would also have its own administration in the segregated proposal.

Construction for the project would begin sometime in 2020, and would reach completion in 2024. Funding for this proposal would be made via the issuance of bonds by the school board.

High School Renovations: Proposed cost - $163,372,356

The renovation needs of the high school are extensive, and include site work, upgrades and repairs to the plumbing, electrical, HVAC, safety and technology systems, and more.

"We know that the systems within the high school definitely need to be addressed,” said Dietrich.

Under the proposal presented at the meeting, construction would begin in Sept 2021, with a phased renovation from June 2023 through June 2027 and completion between June 2027 and Dec. 2027.

Financing for this renovation would come via the issuance of bonds by the school board, and the amount does not include the cost of adding a ninth grade addition.

Financial Discussion

Three of the proposals—Knapp Elementary, ninth grade addition at the high school, and renovation of the high school—require financing by the issuance of bonds, meaning the school district will be taking on hundreds of millions of dollars in debt.

"If we finance the three projects, with the repayment of principal and interest, our debt will go from roughly $118 million up to about $515 million,” said Skrocki, who added that the number factors in both principle and interest paid.

Skrocki said that the debt schedule would carry roughly $20 million per year through 2048, though he added that there is a substantial drop-off in 2028 for the district’s current debt.

"it’s a long way out, no doubt about it,” said Skrocki. "But, it’s a structured sequence to try to maximize the return for the school district and take advantage of some of the existing debt that is falling off.”

From a homeowner point of view, Skrocki said the average annual tax increase for a home with an assessed value of a district-average $147,965 would be $103—or $2871 over 28 years—just for the aforementioned proposals.

One member of the audience took exception with the average assessed value of a home within the school district, stating that they didn’t believe it could be that low. Officials responded by saying that there’s a big difference between assessed value and fair market value.

"There’s a dramatic difference between assessed value and fair market value,” said Skrocki. "The last county-wide assessment was in 1997, so there’s a [common level] ratio that applies.”

Skrocki added that North Penn School District has the fifth-lowest taxes in Montgomery County, and they are 23 percent below the county-wide average.

"[We are] a very high-achieving school district with low taxes,” said Skrocki. "That’s an ideal situation from my point of view.”