City of Somerville, MA

Information About Question 5

Shall the City of Somerville be allowed to exempt from the provisions of proposition two and one-half, so-called, the amounts required to pay for the bond(s) issued in order to design, engineer, construct, and equip the new Somerville High School?

• The existing building is structurally deficient. Somerville High School was built over the course of many years, with the oldest portion dating back to 1895. Aging systems in the current building result in significantly higher maintenance and operating costs of systems that are years beyond their useful life. There are serious issues with the building’s exterior and roof, detailed by an independent consultant in 2011.
• The school’s accreditation could be at stake. At Somerville High School’s most recent review by the New England Association of Schools and Colleges, the accreditors stated that a plan for renovation or new construction needed to take place for the next re-accreditation round in 2020, or the school’s accreditation will be in jeopardy.
• There are education concerns with the current building. The vocational and academic portions of the comprehensive high school are segregated; classrooms are not equipped with technology for 21st century instruction; there is a lack of differentiated learning environments; the cafeteria is isolated and too small; and no usable outdoor athletic space exists.
• The cost to renovate almost matches the cost to rebuild. The Somerville High School Building Committee investigated options for the renovation or replacement of the current High School Building. The cost to renovate and upgrade the current High School Building to building code would be upwards of $130 million. The entire cost would be paid by the City. Based on the most recent estimate for the selected design for the new High School, the project cost is estimated to be approximately $256 million, with the State paying $120 million and the City paying $136 million.

• Proposition 2 ½ limits the amount of revenue a city or town may raise from local property taxes each year to fund municipal operations. This amount is known as the annual levy limit. However, the law allows a city or town to increase tax revenues above that limit with voter approval. A debt exclusion increases the amount of property tax revenue a community may raise for a limited or temporary period of time in order to fund a specific capital project. Note that this is different from a Proposition 2 ½ override, which would add to the property tax rate indefinitely.
• The proposed debt exclusion exempts the annual debt service to pay the $130.3 million in bonds for the Somerville High School renovation from the annual levy limit. A time-limited tax increase equivalent to the revenue needed to pay off the annual debt service payments would be levied on property taxpayers. The additional revenue raised by the tax increase must only be spent on construction of the new High School. The payment period will extend from 2018 to 2054.
• The Somerville High School Financing Plan does not call for borrowing the entire $130.3 million up front and raising the tax bill immediately. Instead, the City’s plan keeps borrowing costs as low as possible, and allows the property tax increase to rise gradually over the next 11 years reaching a peak amount in 2027. The property tax increase will be in effect for the payment period, 2018 to 2054, until the debt is retired. (Example: The average two-family home would see an increase of $4 in year one, increasing gradually to $94 in year 5, and gradually up to its peak of $349 per year, or $6.71 per week, beginning in Fiscal Year 2027.)

• CONDOS – According to financial estimates, the average-valued condo would see approximately a maximum of $189 per year added to its tax bill starting in fiscal year (FY) 2027 through approximately FY2047. Prior to 2027, during the first five years of the borrowing (FY18-FY22), the additional annual property tax on the average condo would be less: the estimate is $2 in year 1, $7 in year 2, on up to $51 in year 5. Between year 5 and year 10, the amounts begin to rise until reaching the maximum noted above. The amount would then fall again somewhat at the very end of the borrowing period before reaching zero in FY2054.
• TWO-FAMILY – According to financial estimates, the average valued two-family home would see approximately a maximum of $349 per year added to its tax bill starting in fiscal year (FY) 2027 through approximately FY 2047. Prior to 2027, during the first five years of the borrowing (FY18-FY22), the additional annual property tax on the average two family would be less: the estimate is $4 in year 1, $12 in year 2, on up to $94 in year 5. Between year 5 and year 10, the amounts begin to rise until reaching the maximum noted above. The amount would then fall again somewhat at the very end of the borrowing period before reaching zero in FY2054.
• SINGLE-FAMILY – According to financial estimates, the average valued single family home would see approximately a maximum of $294 per year added to its tax bill starting in fiscal year (FY) 2027 through approximately FY2047. Prior to 2027, during the first five years of the borrowing (FY18-FY22), the additional annual property tax on the average single would be less: the estimate is $4 in year 1, $11 in year 2, on up to $79 in year 5. Between year 5 and year 10, the amounts begin to rise until reaching the maximum noted above. The amount would then fall again somewhat at the very end of the borrowing period before reaching zero in FY2054.
• THREE-FAMILY – According to financial estimates, the average valued three family home would see approximately a maximum of $428 per year added to its tax bill starting in fiscal year (FY) 2027 through approximately FY2047. Prior to 2027, during the first five years of the borrowing (FY18-FY22), the additional annual property tax on the average single would be less: the estimate is $5 in year 1, $15 in year 2, on up to $116 in year 5. Between year 5 and year 10, the amounts begin to rise until reaching the maximum noted above. The amount would then fall again somewhat at the very end of the borrowing period before reaching zero in FY2054.

• Building Permit Revenue – Based on financial estimates, the City estimates an additional $3.5 million in building permit revenues over the next 10 years, and could get an additional $30 million more if all currently planned development projects move forward.
• Sale of Assets – The new high school will allow the consolidation of city and school services, allowing for the sale of up to six city-owned properties across Somerville. The City is already evaluating those properties under the existing and proposed zoning, and by law all funds from city-owned buildings must be used to pay down debt.
• Use of City Reserves – In the last 13 years, Somerville made a concerted effort to build and maintain ample reserves that can be used to fund capital projects.
• Use of any or all of these sources would reduce the impact projections on the average taxpayer as stated above.

Charts & Data

Additional Resources

Home   |   Design  |   Related Documents & Video   |   Process Timeline   |   Meetings   |   FAQ   |   Funding   |   Parking Changes   |   Job Opportunities   |   Somerville High School Website

Contact us: shsfuture@somervillema.gov