SALEM — The City Council gave a green light to building a new Salem High School Thursday night when councilors unanimously took an initial vote to borrow up to $447.4 million to pay for construction of the new school.
The Massachusetts School Building Authority is expected to reimburse the city between 45% and 60% of the total project cost, but that percentage won’t be finalized until after the MSBA’s meeting in February. The MSBA requires communities to commit to paying up to the full amount of a new school project in order to move forward.
The bond order authorization of $447,385,518 represents the full project cost as submitted to the MSBA, including soft costs, construction costs, and contingencies, according to the city.
The project would create an entirely new four-story, 365,000-square-foot building between the current high school’s footprint and Highland Avenue with an estimated construction period of 30 months.
The city intends to raise property taxes to pay for much of its share of the project by temporarily exceeding the limits of Proposition 2½ via a debt exclusion override that would come before voters this spring. The city won’t know the total amount to be raised locally until the MSBA has an exact reimbursement figure.
Thursday’s meeting included three votes associated with the bond order, starting with first passage of the order and referral to the Committee on Administration and Finance co-posted with the Committee of the Whole, which will meet Jan. 21.
That meeting will include further discussion and a presentation from Superintendent Stephen Zrike, Mayor Dominick Pangallo, co-chairs of the High School Building Committee, the city’s finance director, and the building project manager.
Councilor at-Large Ty Hapworth stressed that Thursday’s initial vote wasn’t the end of the process. “This is very much in the middle of the process. I know it feels sometimes like the first and second passage is finalizing anything, but it’s really just keeping us eligible to receive those funds.”
The second vote was regarding a special election for May 5, in which Salem voters would consider a debt exclusion tax override. Councilors also referred the election order to the same committee meeting.
As opposed to a regular tax override, which is a permanent increase of the tax levy, a debt exclusion is a temporary increase for a specific project, with the levy limit returning once that debt is paid off. The city’s finance director and bond counselor are working through how long the project will take to be fully paid off through the bond, according to the city.
If voters were to reject the debt exclusion override and effectively city officials’ plans to pay for a new high school, Salem is still required to do a basic renovation of the existing building to bring it up to code. That smaller scale project is still estimated at $353.6 million, but with the cost entirely placed on the city, with no state funding.
The building committee says that renovation would also likely have to be spread out over more than 30 years, with an assumed 5% in cost escalation each year, making the true cost much greater than new construction now.
“I understand there are people in Salem who still have a lot of questions about this, I myself have a few, especially as a new councilor,” Ward 6 Councilor Katelyn Holappa said. “I can understand the apprehension. This is a lot of money that will have an impact on taxpayers. But I can also understand the excitement from a lot of folks, that this is a huge potential investment in the future of our city. So I am looking forward to discussing this in committee.”
The third vote Thursday was to spend $29,540 from Free Cash for expenses related to a May 5 special election. This was referred to the upcoming committee meeting as well.
Following the Jan. 21 committee discussion, the full council will reconvene Jan. 22 to vote on the second and final passage of the bond order.