LYME/OLD LYME — Facing as much as a 10 percent budget increase next year, the Board of Education unanimously chose to add an advance payment of $853,000 toward the new K-8 building construction costs, bringing the 0.62 percent budget increase for the 2024-25 school year to 3 percent – still among the lowest in the state.
At a meeting on Wednesday, Superintendent Ian Neviaser likened the addition of funds to purchasing a car — the greater the down payment, the less the buyer has to pay over time.
“It does save us money and when we have such a low budget, it’s a good time to do it,” said Neviaser.
Next year, to take the analogy further, the towns of Lyme and Old Lyme will still be stuck paying off the last car even as the new car payments come due. But by paying down an extra $853,000 this year, the towns could save about $400,000 in the long run over future costs, and reduce next year’s budget increase.
Board of Finance member and Building Committee member Andy Russell told CT Examiner that yesterday’s meeting of the Finance Committee, just prior to the Board of Education meeting, was the first time he had heard of the idea, but that he believed it made sense, particularly given that the new bonds would overlap with existing debt for the first few years.
“With this project coming online, the debt payments and interest payments are going to be pretty significant in the first few years. And the bonds for the $57 million project will overlap with the bonds remaining from the projects done about 20 years ago on the schools and the high school project that was done about 10 or 12 years ago,” said Russell. “So it makes that have more impact on Region 18’s budget, and therefore on Lyme and Old Lyme.”
Russell said that the Board of Education had not spoken to the entire Board of Finance about the idea.
Lyme-Old Lyme residents voted in November to borrow $57.5 million for renovations and upgrades at the two elementary schools, Center School and the middle school. Neviaser said he expected the cost to be closer to $36 million after state grant funding.
Even so, Neviaser told the board that he anticipated debt service could increase by as much as $4.4 million in the 2025-26 budget — a more than 10 percent increase.
Neviaser told board members another option would be to put money toward paying off bonds from 2015, but with the interest rates on the bonds at about three percent, that approach would end up costing even more.
“Paying off the bonds is not a choice I would advise,” Neviaser said.
Board of Education members were largely in favor of the plan.
Board member Chris Staab said the towns were originally expecting a 4.75 increase in 2024-25 because the referendum approving the school construction costs was expected to be approved in spring 2023. Delaying the vote until November simply pushed the cost increase off to the following year.
Staab told CT Examiner in a phone call later that both towns had been represented in a meeting of the Finance and Facilities Committee on Wednesday, and that both had agreed about adding the funds to this year’s budget.
“It’s basically like, ‘Hey, you spend $800,000 you get a $400,000 coupon.’ So it works for everyone and seems like the right path to go forward,” said Staab.
Board member Xander Lowry asked why the board couldn’t add even more money to the budget — perhaps bringing the budget increase to 3.5 percent rather than three. But Neviaser said he felt that would be “pushing it” in terms of what the towns would accept.
“This is the ‘easy’ year,” said Neviaser. “Next year is where we need to get creative to try to drive that ten percent expected budget increase down.”