Soaring school building costs not sustainable
Lowell officials and taxpayers rightfully have been wringing their hands over the budgetbreaking cost of the high school construction/rehab project.
And though it may be hard to believe, Lowell’s situation could soon pale in comparison to one of its well-heeled neighbors.
To review, Lowell had initially signed on to a project with a $343 million price tag. That would have essentially been the same had the city opted to build a new high school next to Cawley Stadium.
A $210 million contribution by the Massachusetts School Building Authority initially left about $133 million for the city to finance.
However, due to escalating prices brought on by COVid-caused supply-chain issues, that cost has jumped by $38 million, bringing the total bill — as of now — to about $381million for a project with a 2026-27 completion date.
And that additional $38 million falls on Lowell — and its taxpayers.
Language in the current fiscal year budget allocates additional funds for the MSBA to help with construction cost overruns, which should help Lowell and other communities cope somewhat with those unexpected, spiraling costs.
When the Cawley option was first approved — only to be overturned by a newly elected City Council — estimates of the high school debt burden for the average taxpayer over the life of the loan totaled about $9,000.
Lowell, with approximately 115,000 residents, has a current high school population of about 3,000 students.
But you can bet the citizens of Andover would love to be in Lowell’s shoes.
There, the cost for a proposed new high school has come in at least $450 million.
That’s for a community of around 36,000 residents and a current high school population about half Lowell’s number.
The new school would replace the Shawsheen Road structure, built in the 1960s. Proponents of the new school say it is necessary to preempt overcrowding, while others worry about its high cost.
A committee is working to design the new school, which will need approval at Town Meeting and most likely a vote at the polls to become a reality
s you’d expect, even in this wealthy suburb, taxpayers and town officials have expressed concern about how the astronomical cost could affect the town’s — and individuals’ — finances.
That’s been exacerbated by the fact that Andover wouldn’t receive any state funds to offset part of the project’s cost.
The district has been denied numerous times by the state program that helps-municipalities pay for the building of new schools.
Town officials have said the denials will likely continue while the town constructs the West Elementary School, which the MSBA has funded.
And acceptance into the MSBA building program isn’t guaranteed, even after the completion of the elementaryschool project.
The Eagle Tribune reported that during a recent public meeting held on the subject, it was noted that borrowing for the high school project would likely drop the town’s AAA bond rating to AA+, and possibly add an extra $26million to the final bill.
The lower the bond rating, the higher the borrowing costs.
The annual tax impact of the school has been estimated at $2,181 for the average homeowner, who currently sits on a median house value of just under $1 million.
This assumes a $480 million cost for the school. The committee working on the design project has since brought the project down to around $450 million.
Town Manager Andrew Flanagan said 50% of the town’s debt should be retired in the next 10 years. However, this estimate doesn’t necessarily take into account future projects that could be undertaken.
Patrick Lawlor, the town’s chief financial officer, said once 50% of the town’s debt is paid off, the “odds would improve” that the town regains its AAA status, but he added bond rating agencies “do not make prospective statements.”
Andover’s conundrum calls into question the feasibility of projects on the scale of a new high school — or comprehensive construction/rehab of an existing facility — in the current high interest, inflationary environment.
It also poses a challenge to the current model of housing students in a brick-and-mortar building when digital means of instruction now exist in virtually every community.
We can only imagine what Lowell’s cost estimates would be, had the city just put its project out to bid.
We’ll be interested to see the final disposition of the plans for Andover’s new high school, which undoubtedly will be the state’s most expensive to date.
Until the next one.