Buying better than leasing
By ROBERT A. DELILLI
On Thursday, registered voters residing in the Greater Johnstown School District will have the opportunity to cast ballots on two separate propositions regarding the proposed purchase of a storage and maintenance building and the proposed expenditure of money from the Bus Reserve Fund for the purchase of three new buses. Informational fliers and post cards with details about the vote have been mailed to all district residents, and can also be found on the school website, www.johnstownschools.org.
Under Proposition No. 1, the school district proposes to purchase a building located at 2 Industrial Park Road in the city of Johnstown to house its Facilities Department, to store seasonal equipment such as lawn mowers and snow removal equipment, and to store bulk supplies, such as paper products. There is no suitable space available in any of our school buildings for these activities, and constructing a facility on school grounds for such purposes has gained little support in years past. Therefore, for the past 10 years, the school district has rented space at 20 Crescendoe Road and, prior to that, it leased a building on Snyder Avenue.
Leasing space generally involves annual rent increases, or an increase in cost when the lease expires and has to be renewed. Purchasing a building with planned financing allows the school district to budget based on known factors. Leasing also involves uncertainties as to whether the school district can continue to remain in a building. As we have learned in the past, if a landlord decides not to renew a lease, the school district can be left scrambling to find suitable space within the city of Johnstown for its operations. Purchasing a building will provide stability and continuity for our Buildings and Grounds operations. When a building is leased, the school district as a tenant has little to no control over maintenance, repairs or improvements and is essentially at the mercy of the landlord as to when or even if such matters are addressed. Purchasing a building will allow the school district greater control in providing a safe and well-maintained work space for staff. Lastly, leasing provides no equity in a building. Had the school district been in a position to purchase a building 10 years ago, rather than renting space, it would be well on its way to being paid for by now.
The purchase price of the building at 2 Industrial Park Road is the sum of $625,000, to be paid for using $10,000 from the District’s General Fund and $85,000 from its Capital Reserve Fund, together with Bond Financing of $530,000. The bond financing (principal and interest) would be repayable over a 20-year period, similar to a mortgage. The repayment of principal and interest would roughly equate to the $28,700 sum the school district currently spends annually to rent property at 20 Crescendoe Road in Johnstown. It is estimated that a home assessed at $100,000, with a basic STAR exemption, would see a nominal increase of $1.46 per year. The overall tax effect is small compared to paying rent over the long term.
Under Proposition No. 2 the school district proposes to purchase two additional 66-passenger school buses, and one 42-occupant wheelchair bus, using funds from its existing Bus Reserve Fund. This would have no impact on local taxes. The Bus Reserve Fund is a type of savings account approved by voters in May 2015 specifically for the purchase of buses. It is replenished by state aid reimbursements on past bus purchases. At one time, the Greater Johnstown School District operated 22 school buses, but currently it is functioning with 16. Over the past year, this has resulted in several bus shortages and transportation delays when buses had to be taken out of service for maintenance or repairs. On some occasions, it has been necessary to ask other local districts for transportation assistance. The purchase of three additional buses will help the school district to fulfill its transportation obligations, which includes transporting students as legally required based on the distance between their homes and the school buildings they attend.
I encourage all legal residents of the Greater Johnstown School District who are registered voters to participate in the special district vote on Thursday. Polls will be open from 11 a.m. to 8 p.m. in the Johnstown High School auditorium lobby.
Robert A. DeLilli is the superintendent of the Greater Johnstown School District.