At Hanover Area, the numbers may lead to consolidation

Dec. 17—HANOVER TWP. — The district-wide building review and recommendations from SitelogIQ and Schrader Group were unveiled for residents, staff and administration at Hanover Area School District this week, and the news wasn't exactly cheery.

The company cited multiple issues with each building, and estimated a new single, consolidated elementary building would run between $60 to $80 million. The Junior/Senior High School is in the best shape among the district's five schools, but could still use an estimated $42.1 million in upgrades and renovations.

The study calculated a "Facility Condition Index" (FCI) for each of the five schools based on a review of the age of systems and needs for replacements or upgrades, as well as recommended improvements in security and updates to meet Americans with Disability Act requirements. Major renovations should be considered if the FCI falls between 45% to 60%. If the score is above 60%, the building should be considered for closing/replacement.

Of the district's five buildings, only the junior-senior high school scored below the "replacement" threshold, in the upper 40s. Hanover Green scored 71%, Lee Park was 70%, Lyndwood had the worst score at 75%, and Memorial Elementary had the lowest score among the elementary schools at 63%.

The report estimates "asset protection" costs for each school, the money it would take to sufficiently renovate them, and the numbers range from a low of $9.3 million for Hanover Green to $16.5 million for Memorial, with a total for all four at $47.7 million. It also estimates the cost for replacement buildings, from $13 million for Hanover Green to $26.1 million for Memorial, for a total cost of $69.2 million.

But both the report and Superintendent Nathan Barrett pointed out that none of those plans include adding space for enrollment increases that have already crowded the existing buildings and are expected to continue. "It doesn't give us a square inch of new space," Barrett said of the renovation estimates.

The study included enrollment projections, calculated by looking at live-birth data, building permit and subdivision activity — including a 116-unit townhome development underway, and the "survival ratio" for the district, meaning the percentage of students that remain enrolled year to year.

All told, the report projects a modest enrollment gain over a decade, but Barrett suspects the numbers are off. "They projected over 10 years only a net gain of 140 kids. We're already at 88 kids."

The report notes "all buildings are projected to continue to experience enrollment pressure in five years." There are several indicators, not mentioned in the report, that suggest elementary classrooms could get crowded. If past is prologue, the district had previously closed Lyndwood due to enrollment declines, only to re-open it later as the number of students grew. Along with the new townhomes under construction, the district has seen a steady increase in large business construction, such as warehouses and manufacturing facilities.

The report recommends the district build a new, consolidated elementary building at the high school site, while possibly retaining Memorial as a STEM (Science, Technology, Engineering and Math) facility. The notion of consolidation onto one campus is not new in the area, at least for smaller districts. Greater Nanticoke Area renovated and expanded buildings near the high school, and Dallas has brought all students to several buildings in the same area for years.

A concept drawing for a new school puts the building southwest of the high school on undeveloped woodland. The new school and the high school would roughly bookend the existing baseball field.

Cost, and how soon the money is needed, are obviously important, Barrett said. "We're one of the highest taxing municipalities in the county, and we're trying to factor that in."

The district will likely have to float long-term bonds to pay for any major work, whether renovating existing buildings or constructing a new one, adding to the annual debt service payments. There is no way of knowing firm numbers until the district actually contacts financing companies, but Barrett said they did use a generic bond calculator to see how much a $60 million bond would cost, and the number was steep: "About $4 million a year, or $330,000 a month."

The good news is that all the large industrial buildings will put a lot of added money into district coffers through property taxes. Calculations "show us with a net gain of $3 million," Barrett said. The bad news is that all those buildings were given tax breaks that will remain in place for at least another three years.

Once the increase in tax revenue kicks in, it should mean the cost of any borrowing "will not fall on the average taxpayer," he said. "But that's three years away."

It is usually possible to arrange long-term borrowing so the annual debt payments are low for several years before jumping to a much higher level. Local school districts have used the tactic when older debt is scheduled to be paid off in a few years, keeping the new debt payments low until the old payments are completed. This can keep the overall annual debt service roughly the same despite all the new debt.

The School Board will have to discuss what comes next, Barrett said. The next scheduled meeting is Jan. 9.

Reach Mark Guydish at 570-991-6112 or on Twitter @TLMarkGuydish