Scaled Down School Build Moves Forward
School Board Set to Meet Tomorrow Morning To Accept School Construction Bid
BAR HARBOR—The Bar Harbor Town Council gave the School Board the go-ahead for a slightly stripped down new school to replace the aging Conners Emerson buildings. The Conners-Emerson School Board was scheduled to meet July 11 at 8:30 a.m. to accept the construction bid. This was cancelled at 2 p.m. on July 10.
The move was necessary after the school construction’s lowest bid came in at almost $11 million over budget in late June. The Conners Emerson School Board brought three potential options to the Town Council on how to proceed.
“We had an overwhelming vote in support of the school,” Superintendent Mike Zboray told the councilors, Tuesday night. “There’s been a strong sense of the importance of a new school in this community.”
In June 2023, Bar Harbor voters passed a $58 million bond to rebuild the ailing schools and support the town’s K-8 population. Broken boilers, rain inundation, a wall pulling away from the foundation, poor air exchanges, limited classroom space, and a lack of insulation are just some of the buildings’ recent problems.
The bond passed 1,005 to 502.
“We’ve hit another bump in the road,” Zboray told the Council.
The hand-delivered bids came from Bowman Construction of Newport and Wright-Ryan out of Portland. Bowman’s bid was read first and then Wright-Ryan’s.
Bowman’s bid was for $70,000,960. Wright-Ryan’s came in at $62,956,069. There is a bid contingency that is $2,475,073. Contingencies are usually meant to cover unknown costs.
Whatever option the Bar Harbor School Board and Town Council picked meant finding more money even with the reductions in building size and project details that two of the options offered.
To make matters worse, the clock is ticking for the board to sign a contract to try to keep the project from losing subcontractors and/or having to be rebid.
“We have 30 days,” said a representative from Wright-Ryan, to get the subcontractors under contract.
Without those subcontractors under contract, prices can change or subcontractors can be unavailable.
The clock was ticking in another way as well, according to Councilor Kyle Shank.
“We don’t have time. It is very likely in the next three to five years that you’ll either have a major roof failure, a major steam pipe failure, which will cause the school to not be usable, and then require at least somewhere between a $3 million to $12 million dollar bond to fix it,” Shank said.
The first option was to leave the project as is, which was the highest cost. Scenario A essentially removed just over $2.5 million of the delta. The second was to reduce the third-story by half, losing classrooms and other spaces. That removed approximately $4.2 million of that gap The third option was to no longer build the third story, which would lose 12 class rooms and other spaces. That closed the gap by approximately $8.6 million.
The second option, a bit of a compromise between the other two, was the one the board hoped would move forward. Board member Tyson Starling said option B allows the school to build on that third floor space in the future. School Board Chair Lilea Simis said the board would like the Town Council’s support in moving toward that option.
The Council agreed.
The problem was how to fund that roughly $4 million extra needed for that option.
The contractural obligation for option B is $59 million.
Most of the discussion revolved around bond premiums and property taxes. The bond can be structured to receive extra money upfront to help cover the extra costs.
Sarah Mangs said it was frustrating to not get the cost per square foot on the project so that she could compare the costs to other school builds across the country. Kate St. Denis said that she hoped in the redesign that they would choose to make fewer classroom rather than smaller classrooms, which she said can be detrimental.
“The taxpayers, we’re like the cash cow and at some point it’s going to have to give.” Dave Mangs said during public comment after noting his appreciation to Vice Chair Gary Friedmann for his comments about taxpayers’ burdens. “We just can’t keep spending millions of dollars on theses projects. How much will the bond cost at the end, after adding all the interest and everything, $100 million dollars?”
“Yes,” Friedmann replied.
“$100 million dollars! For Christ’s sake, people, come on. It’s ridiculous,” David Mangs said.
BOND PREMIUMS AND COSTS
“I want to do this with eyes wide open,” Councilor Earl Brechlin said during the meeting. He wanted to know the difference for the taxpayer. To understand that, the Council had to understand how the bond might work.
“The town of Bar Harbor is not taking out a loan. We’re selling a bond,” Council Chair Valerie Peacock said. There are different ways of selling that bond and a premium bond has more money upfront. “We can do that within the way that the ballot was worded.”
It does add cost in the interest later on, she said.
It’s called a negotiated bond, Finance Director Sarah Gilbert said, and it comes at a higher interest rate.
Shank and Gilbert worked together to figure out the impact of the $250,000 annual estimated increase with bond premium option on taxpayers. The numbers are estimates because the actual values will not be known until the bond sale occurs in August. Historically, Shank said, the estimates have been “on the nose.”
The numbers only relate to changes to the bond premium and the school’s debt service and property tax levy, not using bond interest to potentially offset the increase, so the real impact to taxpayers could be lower.
It would create a difference to the median home owner of $53.86 and a 1.03% mill rate increase. The median property tax bill already in fiscal year 2025 would be $5,244.39. This would increase it to $5,298.25.
Somewhere between $1.5 million to $2.4 million would be a reasonable estimate for interest to be reapplied to the $4.2 million, which would reduce the taxpayer’s immediate burden. The market rate on the investment should be somewhat stable, the town’s bond expert said.
“Bond premium is pre-funded cash proceeds to the borrower, the town. The bonds that the town is selling are tax exempt to the purchaser—with that comes less exposure to capital gains taxes by offering an interest rate a few basis points higher (but don't know until we go to open bond market),” Gilbert explained Wednesday.
”The tax exempt bond, a general obligation bond, is wholly backed by the taxpayer - if the interest rate on the debt service is higher, the semiannual payments are higher. Debt service is part of CIP budget,” she wrote.
Gilbert also worked out some hypothetical details for the school’s debt service after the meeting using both a $58.5 million bond and that bond with the $4.2 million premium use.
Fiscal Year 2026 will have an increase to pay school construction debt service of $1.8 million or .72. The town has budgeted in Fiscal Year 2025 $1.99 million, which taxpayers will see reflected in their September 30, 2024 tax bill.
The bond sale is scheduled for mid-August
“I feel like this is a sacrificial action you’re asking the Council to take,” Friedmann said, though he added that he wasn’t opposed to that second option.
“Even another 1%,” Friedmann said is significant and the town shouldn’t be cavalier about it. “That’s going to hurt next year.”
Town Manager James Smith asked, “What is the dollar value of the construction project as it sits under option B. That will be the amount you need to sign a contract for option B?”
The hard costs are $57,657,886 under that option. That does not include the soft costs. They would take the soft costs and move it to the construction value.
OTHER COUNCIL CONCERNS
Friedmann suggested using a federal cash-back program for the school’s proposed geo-thermal systems. He also suggested taking College of the Atlantic’s approach to geothermal systems rather than the one proposed by Harriman’s, the firm in charge of the project. This, he said, may create some cost savings.
Friedmann also said that Higgins Pit was a revenue bond, which is different than how the school bond would work.
Councilor Joe Minutolo asked for a monetary estimate of the benefits to the taxpayers and town budget by the school using a geothermal system. That was not currently available.
Councilor Matthew Hochman was concerned about limiting music space and theater space in the second option. “Other than moving some bleachers, I don’t see anything coming out of sports.”
He said because of this, he was unsure he could support the cuts. He was also concerned about decreasing classroom size and if that would put the school in the same situation it is now, which is not having the space that is needed.
Dr. Heather Weir Webster, principal of the schools, said the stage dimmer was taken out, but the opening to the cafeteria and stage area was still accessible. They are talking about reducing music room size but also locker room size.
“That wasn’t the first place we went to cut,” she said.
Minutolo asked if there were any anticipated staff needs for the new school.
”Just the addition of two pre-K classrooms,” Webster said.
The current school population of 350 is predicted to go up to approximately 370 with the addition of pre-k.
“We’re building to educate approximately 24,000 over the next seventy years,” school Zboray said.
This number is meant to reflect the approximately 342 students that the school educates each year. Those students, however, don’t change out every year. Approximately 43 new students currently enter the Bar Harbor school each year. Over 70 years, that is approximately 3,000 students.
There could potentially be a vote on a reorganization of the schools next spring. Reorganization would be a short-term goal and then consolidation would be a longer term goal.
Possibility for a reorganized system would be two elementary schools, one on this side of the island serving Mount Desert and Bar Harbor. Mount Desert would potentially host the middle school. Tremont would potentially be the elementary school and Pemetic would be the middle school on the other side of the island.
“It keeps all of our schools open but moves kids around,” Zboray said of that possibility, but they haven’t gotten to that point in the discussions quite yet.
LINKS TO LEARN MORE
To check out the project, click here.
Here is a link to bond advisor’s Joe Cuetara’s discussion.
For information on the Bar Harbor School Committee, click here.
For information on the Conners Emerson Building For Our Future project, click here.
https://www.harriman.com/projects/
UPDATE AND CORRECTION: This story was edited to reflect the July 11 School Committee meeting cancellation. It was also updated to have the correct name for David Mangs, which I somehow heard as David Banks. So many apologies to Mr. Mangs.
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If you actually believe that a contractor is going to walk away from $11,000,000 cost estimate overrun without attempting to pad back in at least a decent chunk of it I've got a bridge in NYC I'll give ya a deal on!
Consolidation is needed