Boundary Alteration: presentation highlights – August 23, 2017

Below are highlights from the presentation given by Superintendent of Schools Elsie Rodriguez and Assistant Superintendent for Business and Management Services Patrick Cahill during the regular meeting of the M-W Board of Education on August 23, 2017. During the meeting, members of the Board of Education voted unanimously to approve a resolution to alter the school district boundary lines.

Steps taken by the district (2o15 – 2017)

  • To determine the impact of annexation, MWCSD issues an RFP (Request For Proposals) to measure independently the financial impact of the annexation for 164 and 507 acre annexation areas.
  • Study considers lost tax revenue, state aid, impacts to District expenses due to the provision of services that resident non-public school pupils are entitled to from the local public school district.
  • District engages Questar III BOCES, State Aid and Financial Planning Service to analyze the situation and write a report detailing the potential impact.
    • Questar III BOCES
      • Part of the Columbia County BOCES which has over 400 school district clients throughout NYS.
      • Due to complexity of State aid widely regarded as an important resource to turn to for guidance and assistance in state aid matters.
      • As the State Education department has become smaller the staff that remains is less and less able to assist or guide local school districts.
      • The study measures both short and long term impacts.
      • Does not attempt to measure annexation impact to housing market or local economy – outside project scope.

Assumptions and Key Data Points

  • Study purpose “big picture” – weigh lost tax revenue against costs the district would no longer incur
  • All values are expressed in current dollars.
  • Uses other sources such as county study and extrapolation of existing KJ development trends to forecast growth in students and services
  • Current loss in tax revenue 2017 taxable assessed value *
    *2016 tax rates
  • Forecasted changes in annexation area
    • Construction of high density housing leads to population growth well in excess of the non-Village portion of Town of Monroe and surrounding Towns.
      • 164 acres, 15 housing units per acre with a population estimate of 9,996 or 60.96 persons per acre
      • 56 acres x 60.95 = 3,413 people
      • Total projected population on 220 acres = 13,409
    • Increased student population leads to increasing requests for services from public school district
      • Projected student population 13,409 x 50.89% = 6,824 students within annexation area.
    • Additional development leads to increases to tax base or more ‘rate-ables’
      • Computed average per acre value within the Village of Kiryas Joel to calculate change in tax base at full build out
      • $141,254,135 school taxable assessed value / ~709 acres = $199,230 per acre
      • $199,230 x 220 = $43,830,600 – $6,616,300 (current value) = $37,214,300
      • $37,214,300 x $133.061704 per $1,000 of assessed value = $5,832,174 change in revenue due to annexation
      • $5,832,174 represents change in tax revenue for the 220 acres due to annexation

The Matrix

View the matrix link

  • In consultation with Questar III BOCES the District developed a matrix to attempt to quantify the cost and benefits of annexation.
  • Purpose of the scorecard was to approximate a net present value computation of annexation by weighing the lost revenue against costs we will no longer incur.
  • NPV (Net Present Value) analysis is often used to determine whether or not an investment should be made.
  • In our case the question is: Should the boundaries of the District be altered so that the Village of Kiryas Joel or Town of Palm Tree boundaries align with the KJUFSD boundaries?
  • The scorecard assumes that two current trends will continue and incorporates these trends into the analysis:
    •  Increasing utilization of services by pupils attending non-public schools; and
    • Substantial growth in the student population in the annexed territories.

Conclusions

Projected Financial Impact

  • In the short run (0-2 years)
    • The District will experience a loss of approximately $343,860 due primarily to loss of tax revenue associated with the 220 acres.
  • In the long run (3-5 years)
    • NOT moving boundary leads to projected future expenses that exceed future revenue by ~ $1.9 million.
  • The annual estimated tax impact of boundary alteration on a typical home with a market value of $275,000 in 2016-17 is $21.

Maintains course of action established in 1989 with the separation of KJUFSD from M-WCSD

Map of Proposed Town of Palm Tree

164 acre annexation (in olive green) plus 56 acre addition (in pale teal green) to form Town of Palm Tree

Map of proposed Town of Palm Tree incorporating original 164 acres and additional 56 acres