Important Vision 2020 Information

In speaking with our architect and New York State aid specialists, we have learned that 92% of the $114,800,499 combined Proposition 1 and 2 projects would be eligible for a New York State aid at a rate of 54% per year.  thumbnail124978
In speaking with our architect and New York State aid specialists, we have learned that 92% of the $114,800,499 combined Proposition 1 and 2 projects would be eligible for a New York State aid at a rate of 54% per year.

Dear South Huntington Community Members:

I hope this letter finds you well.

I want to take a moment to thank you all for your important comments and questions relative to our Vision 2020 Bond process. We have been working to address these inquiries and provide as much project clarity as possible. We have also been acting upon various community suggestions and requests, specifically to calculate the costs based upon the current interest rate (rather than the 4.25% default estimate we have been using thus far) and to factor an estimate of New York State Aid reimbursement impact.

The first suggestion was relatively simple to fulfill as it really just required a yearly cost calculation based upon the current Bond borrowing interest rate. This calculation revealed that the annual cost for both Proposition I and 2 at the current 2.5% interest rate would be $72/year for a $353,850 house, $103/year for a $507,700 home, and $135/year in a $661,540 dwelling. We note that these figures are a bit lower than those presented on June 19, 2019, as we were using an estimated 4.25% interest rate, which now seems far from the 2.5% current reality and Federal Reserve indications.

The taxation impact of the New York State Aid reimbursement formula took us a bit longer to calculate, as we wanted to be absolutely sure which parts of the Bond were aid eligible and make certain that the aid disbursement could be presented to you in most accurate, transparent manner.  In speaking with our architect and New York State aid specialists, we have learned that 92% of the $114,800,499 combined Proposition 1 and 2 projects would be eligible for a New York State aid at a rate of 54% per year. This essentially means that New York State will reimburse us at a rate of 54 cents on the dollar for $105,616,459 worth of the Vision 2020 spending.

The $57,032,887 in reimbursement would be paid to the district through the life of the Bond in the form of New York State Aid.  The New York State Tax Cap formula then deducts each year’s Building Aid money from the taxes that a district can collect from a homeowner. As a result, the 54% State Building Aid on the Bond Tax results in an equal savings from the overall tax bill.

Another way of looking at the overall Bond cost would be to say that 92% of $103 a year tax increase (which is predicted for a $507,700 home at a 2.5% interest rate) would be eligible for the 54% New York State Building Aid. As a result, the actual yearly increase in the sample $353,850 house related to the Bond would be $36.23. Similarly, the yearly increase in a $507,700 house related to the Bond would be $51.83, and $67.83 in a $661,540 home.

The yearly costs described above are applied to each of the seven years of borrowing, so the $507,700 house described above would see a new $51.83 increase each year for the first seven years of the bond. The seven yearly increases for the $507,700 then peak $362.81 ($51.83 x 7) and remain at the number for the next eight years. The costs then begin to go down at a rate of $51.83 annually from year 16-21, at which point the Bond borrowing is completely paid.

We are confident in the reimbursement allowances and calculations that have been confirmed by our architects and aid specialists. We are also comfortable with the interest rate estimation and would be more than happy to talk individually with any community member about their individual bond impact.  Additionally, attached you will find three charts that identify the yearly costs for each home value scenario--$353,850, $507,700, and $661,540 at 2.5% interest.

Further information pertaining to the Vision 2020 bond can be found on the following website:  http://southhuntingtonvision2020.com/

Thank you all for your input, and I look forward to chatting more about these exciting projects as the summer continues.

Sincerely yours,
Dave Bennardo
Superintendent of Schools