Questions about activity center answered
(By Tyler Gansebom,
Activity Center Committee)
OSMOND — Thanks to all of you who took time out of your schedules to either listen to or attend our Monday, Jan. 27, community meeting on the proposed activity center. Based on feedback and questions from the first community meeting, the following is information from questions posed.
Many questions have been brought forward around why the committee chose this design or if modifications will be made before the vote.
The committee has been meeting since August of 2019 with many ideas and designs brought forth and much discussion had on those designs.
There was originally a thought of adding a walking track, stage and also locker rooms to the facility. Because of costs associated with the project, those specific wants were removed from the final product to get where we are today.
With the bond amount being established, the design being presented is what the bond vote will be based on.
Total cost to construct this project will likely be between $5.7 million and $5.9 million based on estimates given by our architect. No official bids are given by contractors until funds are known to be available showing the project will continue.
The school currently has $1.3-$1.4 million in special building funds and depreciation funds which have the ability to be used for the project. (These funds are already collected and in the district bank accounts.)
These funds have not been declared yet for use by the board as donations could also help with this project to lower the overall cost to the taxpayers.
As for the additional costs to the taxpayers of the district, the information we have given in the paper, on Facebook posts, flyers and the community meetings is how your taxes would be impacted based on the bond.
The board has submitted a $4.89 million bond (total amount to be borrowed which would never be exceeded no matter the final bids) which would be paid back during a period of 20 years.
Based on current interest rates, the expected rate the district would pay would be around 2.67% which is historically low and would result in a payment of around $305,000 per year, or a 7.85 cent levy increase.
This is a cost of $78.50 per $100,000 of valuation. (see flyers and foam boards around town for expected costs on specific property examples)
Total project interest through the next 20 years is expected at $1,653,007, this number is factored into the $305,000-per-year payment.
Another question from the meeting was around the overall costs of the project. While we agree the number is large in totality, it is realistic given the information we have received from different construction companies and architects and is only going to continue to rise into the future, likely at higher borrowing costs. When will be the “right time” for a project?
The normal inflation rate for construction costs is 3-5%, compounded annually. Let’s just use the very conservative end of that range and go with 3%. In 10 years the New price tag for the exact same projects would be $7,929,106, before interest costs!
If construction inflation happens to rise at 5% the price tag would be $9,610,478 before interest! Our overall costs spread out through 20 years on this project because of low interest rates will be around $7,553,007. ($5.9 million overall cost plus $1,653,007 interest)
A question was posed around expected operating costs for the new facility. We are working on updated cost expectations and will update those numbers once they have been received.
The 20/20 Activity Center Committee will continue to keep you up-to-date on any updates to the project. We will continue with articles in the paper, distribute flyers and boards around town and have another community meeting on Wednesday, Feb. 12, at 7 p.m. at the school.
You can also stay up to date on information about the project on our Facebook page. (https://www.facebook.com/2020OsmondActivityCenterCommittee/)
