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EDISON, NJ—Township voters will go to the polls on Tuesday, March 10 to vote on whether to allow the board of education to issue over $18.6 million in bonds to rebuild an elementary school that was destroyed by fire almost a year ago.
The James Monroe Elementary School burned to the ground March 22, 2014 after a janitor discarded a cigarette in a trash can.
The students from the neighborhood served by Monroe Elementary were temporarily sent to classes at the Middlesex County College campus in Edison, before being moved to an unused private school in Metuchen.
The Diocese of Metuchen is currently hosting the students rent-free at St. Cecelia School in Iselin, but the district must move the students out of the school by September 2016 or pay the Diocese of Metuchen $900,000 for every six months they remain.
If approved, the total bond issue will cost the average Edison homeowner an additional $21 per year in property taxes over the next 30 years.
The $21 figure is based on Edison’s average assessed value of $176,700 and a bond interest rate of $3.72%.
The bonds issued are considered “municipal bonds” and the interest on them to the bondholders is not taxable, making them worth more than the stated interest rate to high-income investors.
The district has already received $9.5 million in insurance money for the loss of the James Monroe School.
However, total construction costs for a new school are a little over $28 million, leaving the district with the $18.6 million shortfall that it is seeking to bond.
The district is currently embroiled in litigation with its insurer, the New Jersey Schools Insurance Group (NJSIG).
NJSIG is a public body founded in 1983 by the New Jersey School Boards Association, where some 400 school districts pool their insurance coverage in a mutual insurance fund.
The district is suing chiefly because the insurance group claims that they only have to pay to rebuild the school as it was when it was built in 1963.
Standard insurance policy language includes coverage for rebuilding to comply with changes in “codes and ordinances,” which the group claims only includes Edison Township Construction Codes and local ordinances.
However, changes in federal and state law and state administrative regulations require facilities and equipment that were not mandated or did not even exist in 1963, including handicap facilities, elevators, a minimum square footage per student, fire sprinkler systems (which James Monroe did not have), and space for special education students.
It would be illegal to build a school that does not comply with all contemporary requirements.
The district is arguing in its suit that these other laws and regulations constitute “codes and ordinances” and therefore the insurance group should be required to pay for a new school that is legally allowed to be built.
According to numbers provided by the district, if the lawsuit is successful, every $1 million paid by the insurance company would reduce the $21 assessment by $1.12. The BOE issued the referendum stating that any money received from the lawsuit must go to repaying the debt, and cannot be diverted to other uses.
Members from district administration and several BOE members came to the February 23 Township Committee workshop meeting to discuss the bond issue and answer the council’s and resident’s questions.
A March 4 presentation by Superintendent Richard O’Malley at the Herbert Hoover School answered many questions about the referendum.
The referendum is necessary to raise the funds to build a new school, O'Malley said.
If the referendum is approved, the district expects to have construction completed by September 2016, saving the required $1.8 million payment to the Diocese of Metuchen for the continued use of St. Cecelia's.
Also, if the referendum is passed by the voters, the district would receive $4 million in debt service aid from the state.
According to O’Malley, if the referendum fails, township taxpayers would not get the state money – even if the bond is ultimately issued.
Failure of the referendum does not mean the district will not issue the bonds or rebuild the school.
The district can put the matter up to another vote later in the year, and if the vote fails a second time, the state Commissioner of Education can issue the bonds anyway. If that happens, it would cost the district – and therefore Edison taxpayers – an additional $6 million in the additional costs and lost state aid.
The old James Monroe was a 40,000 square foot, single-story building. The new school plan calls for a two-story building with almost 68,000 square feet.
O’Malley says the difference in size is because of the new facilities required by law and regulation that is the subject of the current litigation with the insurer.
The new school is slated to be two stories in order to maintain the same basic footprint on the Sharp Road site, while still having all the facilities required by law.
The plans for the new school have been approved by the state Department of Education, and the NJ Department of Community Affairs has given preliminary approval of the submitted plans.
Ultimately, if the school is not built, the students would have to be redistricted to other Edison elementary schools, exacerbating the district's overcrowding problem.
“The worst option is the school doesn’t get built,” said O'Malley.
O’Malley told the residents that, if the school is not rebuilt and redistricting is necessary, it would not just impact James Monroe students, but every student in the district.
The cost of the special election is $65,000, a cost the district has to pay the county clerk. If the referendum fails and another special election is held, the district would have to pay the same amount.
When a resident at the forum asked O’Malley about what he felt were the chances of the referendum passing, O'Malley said, “I feel good going into Tuesday.”
Polls are open from 12 pm to 9 pm. Any registered voter in Edison Township is eligible to vote, and residents should vote at their regular polling place.
Edison Now will be reporting the results of the election as soon as they are made available on EdisonNow.com and our Facebook page.