| G. Michael Dobbs
HOLYOKE – One side believes this is an opportunity that has been offered to Holyoke, while the other says the city cannot afford to move forward with two new middle schools.
The issue that appears to be attracting the most attention in Holyoke’s upcoming election is the debt exclusion question that would allow the city to move forward on the proposed $133 million middle school project.
If the voters approve the question – which is one form of Proposition 2 ½ over-ride – the City Council would then vote on a bond to fund the city’s portion of the project. The Massachusetts School Building Authority (MSBA) has approved funding for the two middle schools at the level of $73,273,858 with the city responsible for nearly $60 million.
The question that has divided the city is whether or not with Holyoke, at the levy limit for its property taxes and coupled with other financial commitments, can afford this project at this time.
Voters will be able to vote “yes” or “no” on this question: “Shall the City of Holyoke be allowed to exempt from the provisions of proposition two and one-half so-called, the amounts required to pay for the bonds issued in order to pay costs of designing, constructing, furnishing and equipping a new middle school of approximately 105,440 square feet, more or less, to be constructed on the open block bounded by Cabot, Chestnut, Hampshire and Elm Streets in Holyoke, Massachusetts, and a new middle school of approximately 105,480 square feet, more or less, to be constructed on the site of the existing William R. Peck School located at 1916 Northampton Street in Holyoke, Massachusetts, including the payment of all costs incidental or related thereto?”
The Holyoke Taxpayers Association released a statement about the question on Oct. 25. The statement read in part, “In a city like Holyoke, not unlike many other Gateway Cities in the Commonwealth, the number of businesses paying the taxes has recently shown signs of diminishing. The residents make up the greatest percentage of accounts paying taxes, with the businesses paying the greatest amount of money due to the split tax rate within the city. We rely very heavily on the Holyoke Mall, which pays in excess of $8M in taxes. We have the experience of having lost the Mt Tom Power Plant, which at the time was the second highest ratepayer. Realistically, the city of Holyoke needs increased business growth to help increase the tax revenue stream. We do have some businesses on the books, with only one of the cannabis business paying anything yet, and that is $100,000. It is a far cry from what we need. The city has worked hard to make up the losses from the Mt. Tom Power Plant, and there are new businesses coming along – but not enough right now to offset the costs of the two schools. Retail is taking a hard hit. Note the loss just recently of Pier I and Kaoud Rugs. There are others in the pipeline. It is abundantly apparent that Holyoke needs new businesses and should have people actively supporting new tax revenue producing development.”
The Keep Holyoke Affordable for All Committee, which includes former City Council President Kevin Jourdain and current Councilor Linda Vacon, are advising voters to turn down the question in order to seek other ways to provide better school facilities for Holyoke students, Holyoke Mayor Alex Morse is leading the support for the vote yes side.
Morse told Reminder Publishing, “So it’s the only option that? we have and it’s the best possible, most affordable plan that we could’ve actually made happen in the city. So we haven’t had a new school constructed in Holyoke in 30 years, we have no adequate middle school space for our students and this is a once in a lifetime – once in a generation opportunity to build two brand new middle schools in our community that every middle school student would attend.
“So we looked at other options, renovations, and this again is the most affordable option for Holyoke and its residents,” Morse concluded.
In an interview with Reminder Publishing Jourdain and Vacon expressed the belief that not all of the options to address the educational needs of students have been explored and the question on the ballot does not include any financial boundaries for the project.
Jourdain noted the city already has the highest residential and property tax burden in Massachusetts and the responsibilities for a $60 million bond would push the rates up even more. He added there is a real concern about the future of the Holyoke Mall, which is already paying $8.1 million in taxes and may not be able to afford an estimated $600,000 increase if the question is passed.
Vacon said she is concerned about Holyoke seniors who have paid off their homes and plan on remaining in them whether or not they can afford an increase in taxes. Jourdain added an additional tax burden would be “really, really tough” for the city’s working poor and the lower middle class.
By law, if passed debt exclusion must be paid first, which has led opponents to the question if the city does not have enough revenue what other elements of city services would be affected.
A presentation made by the opponents showed that Holyoke has an unfunded pension liability of $150 million and a commitment for $20 million to $30 million in combined sewer overflow work, which they say will be affected by the additional debt service of the school project.
In a statement supporting the schools, School Superintendent Dr. Stephen Zrike wrote, “The totality of our schools’ infrastructure woes were detailed in an independent 2016 facility audit. Two buildings – Peck and Lawrence – failed their structural evaluations outright. Five buildings rated extremely low in overall quality across 24 criteria.
“Our case was so severe that in August 2019, the Massachusetts School Building Authority granted the city $75.8 million to fund a two-middle school solution. The award is the result of years of community input on how to address decades of insufficient investment in our schools. This money will pay for nearly 60 percent of the cost of the new and safer schools. The remainder of the cost would be paid via a debt exclusion override that citizens of Holyoke will vote on during the Nov. 5th citywide election. While a modest property tax increase will be required, our crumbling school infrastructure is a crisis. This proposal is an opportunity to act for the health, safety, and education of all of our children.”
He added, “As an educator for more than 20 years, I know that when teachers have access to modern technology, equipment, and learning spaces, they can teach grade level standards with rigor and relevance to ensure our students leave Holyoke ready to compete in a rapidly changing, global economy.”
The mayor’s office recently released a revised estimate on the cost to property owners based on projections from the consulting firm Hilltop Securities. “The newly released estimate of 68 cents per $1,000 on a 30-year bond is well below the initial estimate of $1.16 despite a slight increase in project costs. The change in cost can be attributed to two significant factors; the $1 million commitment from Holyoke Public Schools, and updated interest rates that reflect current market conditions. These updated figures also allow for the calculation of the tax impact on the average single-family home in Holyoke, which is currently valued at $190,637. For a home at average valuation a resident could expect to pay $129.60 annually on a 30-year bond toward the middle schools, should the project move forward. This number is significantly below original estimates that were approximated to be around $250,” read the statement.
The statement continued, “Project Manager Margaret Wood has also confirmed that the city’s allocation from the MSBA is at the maximum rate of 80 percent reimbursement for eligible costs, and that the discrepancy between the final numbers is due in large part to the MSBA’s cap on construction costs which are capped to distribute available school funding more broadly and are not tied to current regional averages.
“She explained, ‘The 80 percent ‘base’ reimbursement rate is easily misunderstood because of the complexity of the funding formula: that said, when we do the math, Holyoke’s effective reimbursement from the MSBA is among the highest in the state. This really is the best-case scenario the MSBA can provide under the current enabling legislation and represents a once in a lifetime opportunity.’”
The $1 million commitment Holyoke School is not in cash nor is a line item in a budget, opponents pointed out. They also accused the lower tax impacts as being “fuzzy math” and an “October surprise.”
The Holyoke Taxpayers Association added it “feels a good education is of paramount importance for the children of Holyoke. We offer up the question: Can Holyoke afford the two new schools as proposed?”