OLEAN — When Jenny Bilotta, business administrator of the Olean City School District, learned earlier this week that the district had been approved for a constitutional debt increase by the state, she stated it was “great news.”
That’s because the district had recently applied for a debt increase and was quickly approved by the board of Regents and state comptroller. On Tuesday, Bilotta noted an increase with the debt limit will not raise taxes and was requested because of the current approved capital project for upgrades at schools in the district
“Basically what happens is the state puts a limit on what schools can borrow, basically so schools don’t go hog wild and say, ‘Hey, I’m going to do as many capital projects as I want,” Bilotta explained. “So what (the state) does is put a limit on it. We are a small city school, so we’re limited to 5 percent of the full value of properties in Olean” for capital projects.
She said the five-year average of full values is $602,333,047.
“So, if we take 5 percent of that, it equals $30,116,652,” she explained. “This is the maximum amount of debt we can have at any time.”
As the district’s debt is $21,710,000 from the previous capital project, and the new capital project debt is $24,800,000, the total amount is over the limit allowed.
“So one project in and of itself will almost max out our debt limit,” she added. “We pay those projects back over a 20-year period, which is the typical payment period. We wouldn’t be able to do another project for several years, so they give us this ability to file this waiver and ask to be able to take out more debt.”
With the approval, the district will be able to borrow over the current debt limit by $12,833,000.
Bilotta again noted this will not raise taxes as “This is basically the project the voters already approved last March … so the first step is to make sure the voters approve your project, because if they don’t approve your project then you can’t borrow anyway.”
The current capital project has a primary focus on renovations at Washington West Elementary School, and additional upgrades at Olean High School and Olean Intermediate Middle School.
The project will receive 95 percent state aid, with five percent of the cost provided by capital reserve funding. Campus Construction Management Group Inc. and Young & Wright Architectural, which provided work for the first capital project, are heading up the current project. The project will include the restoration of hallways, lockers and floors at Olean High School; upgrading safety measures at East View Elementary; and giving Washington West Elementary a fresh look. Another major project will be the restoration of the high school auditorium.