Shore Reg'l H.S.: Vote for referendum, get state $$

BY SUE MORGAN
Staff Writer

WEST LONG BRANCH - Shore Regional High School District taxpayers are being urged to take the state's money and run.

Actually, it is $17.5 million in debt service aid from the state Department of Education (DOE) that residents of the district's four sending communities could lose if the Shore Regional Board of Education's proposed $49.8 million bond referendum fails at the polls on Tuesday, according to Ronald J. Ianoale, bond counsel for the project.

Because the financially troubled New Jersey Schools Construction Corp. (NJSCC) no longer has any grant money to help fund school building projects, the $17.5 million pledged to the district by the DOE for the planned renovation of its single school building will come in the form of debt service, Ianoale told about 50 persons gathered at a Sept. 12 public forum on the bond issue.

"[The NJSCC] will say that there is no grant money because it has been expended," Ianoale told district officials, board members and residents gathered inside the media center at the school in West Long Branch.

"The alternate to the grant is debt service aid," said Ianoale of the McManimon and Scotland law firm in Newark.

Should the referendum pass with a majority of voters in the four sending towns - West Long Branch, Oceanport, Sea Bright and Monmouth Beach - Shore Regional would be eligible to receive $17,495,980 or about 35 percent of the total referendum price tag of $49,797,221 in debt service aid, Ianoale said.

The balance of $32,301,241 or 65 percent of the tab would be paid by district taxpayers over 30 years, he added.

"I feel comfortable that you will get 35 percent in debt service aid," Ianoale told those in attendance. "If you really feel you need these improvements, the time to do it is now."

With interest rates currently hovering around 5 percent, now is "a good time to sell bonds," said Anthony Inverso of the Mount Laurel-based Acacia Financial Group, the district's financial advisement firm.

Even if the referendum goes down, both Ianoale and Inverso indicated that a watered-down building plan will probably be crafted for a vote at a later date.

"These improvements will have to be done one way or the other," Inverso said.

It is unlikely that the grades 9-12 district, which the DOE considered to be one of the wealthier ones in the state, would receive any grants from the NJSCC given that entity's troubled circumstances, both Ianoale and Inverso said.

Most of the money that the NJSCC had for building since it was created by the state Legislature in 2000 has been spent or is earmarked for forthcoming projects.

Last week, the Interagency Working Group on School Construction, an entity created to oversee and review the actions of the NJSCC via an executive order signed on Feb. 7 by Gov. Jon S. Corzine, recommended that lawmakers consider borrowing a total of $3.25 billion to get the beleaguered agency back on its feet.

If the referendum goes through, the district can look into the possibility of receiving NJSCC grant money as opposed to the debt service, Ianoale said.

Even if the district were to apply for and be approved for NJSCC funds, it would still have to borrow money in anticipation of receiving a grant, Ianoale said. That grant would then be used to repay the loan.

For now, the district will go for the $17.5 million in debt service aid, until it knows the financial status of the NJSCC, Inverso said.

The $17.5 million in debt service aid that Shore Regional expects is contingent upon passage of the referendum and those funds come from the DOE, not from the NJSCC, which only handles grants, McElroy said.

In creating its referendum package, Shore Regional did not apply directly to the NJSCC for a grant, but to the DOE to see what type of aid is available, he explained.

As a rule, school districts do not apply directly to the NJSCC for grant money to help support a pending referendum, but directly to the DOE, he continued.

"There is no application per se," McElroy said.

Once a referendum goes through, the NJSCC is contacted by the DOE to review the building plan and make an offer to the district before it starts construction. It is then up to the district to accept the funds, McElroy said.

"The referendum must pass first before [a district] can ask for the grant," McElroy said.

The district was notified of its eligibility to receive the $17.5 million from the state in an Aug. 30 letter to Shore Regional Superintendent Leonard Schnapphauf from Bernard E. Piaia Jr., the DOE's director of school facilities.

Piaia wrote that districts whose building plans are approved by the DOE can receive the state aid in the form of a NJSCC grant or through debt service aid.

The DOE has set the money aside for the district on the basis of that letter, according to Steve Brennan, Shore Regional's business administrator.

"The money has been earmarked for us," he went on. "But we will not receive it until the referendum passes."

Each of the four sending towns will pay proportionately their share of the referendum costs based upon a state-approved funding formula, district officials have said.