School referendum reduces town bond limit

BY MICHAEL OLOHAN OF PASCACK PRESS

Hillsdale

Some borough officials were taken aback to discover that, should the $82.7 million school bond referendum pass in March, it will temporarily reduce the boroughʼs available bonding capacity from $43 million to approximately $24 million.

The boroughʼs auditor mentioned it in early January. Both the townʼs bond counsel and auditor work for the school district in the same respective capacities.

Town officials emphasized that the districtʼs need to exceed its bonding capacity and leverage some of the boroughʼs was unlikely to affect borough operations — though it might affect bond ratings and credit risk, which could increase borough bonding costs.

The practice is allowed under state law, it went into effect here automatically, it will not encumber the borough, and no one has alleged any wrongdoing. Mayor John Ruocco and Councilwoman Abby Lundy said they would have wanted a heads-up.

Although the Hillsdale Public Schools District and the boroughʼs governing body serve Hillsdale residents, they are separate government entities. Each is funded by property tax revenue: 2022ʼs property tax bill shows the local school district received 45.2%, Pascack Valley Regional High School District 24.4%, Borough and Library 20.9% and Bergen County 9.5%.

An $82.7 million bond referendum to replace the century-old

George G. White Middle School is set for March 14. The district says the facility and fields have proven inadequate for modern class sizes and needs, and that people informed on the matter support a new building.

A virtual public forum on the referendum is set for Thursday, Jan. 26 at 7 p.m. The public can ask questions of consultants Di Cara Rubino Architects and Phoenix Advisors.

Check the district website for a link to the forum. Our coverage of the session will appear Feb. 6.

Ruocco said it was unlikely that the borough would end up paying more on its own bond issues. “It is also possible, though unlikely, that the rating agencies could downgrade the boroughʼs debt rating because of the George White bond. If that occurs, the borough would pay a higher interest rate on future borrow- ings.”

Superintendent Robert Lombardy told Pascack Press that the district informed “the financial arm of the borough” after receiving state approval of $5.4 million in aid for its bond referendum in late December.

He said, “As the bond is repaid the boroughʼs debt capacity margin would continue to increase until fully satisfied. It is important to remember that as a Board of Education we must ask voter permission to sell bonds.”

The districtʼs referendum web portal was updated with a FAQ noting, “The borrowing capacity of a New Jersey school district is limited by several factors, including the total average equalized value of property in that district. This could be compared to an individual consumerʼs credit limit.”

It adds, “For the significant expense of building a new school, a district can borrow beyond the margin that the stateʼs formula assigns. Hillsdale Public Schools would use some of the boroughʼs borrowing margin, but the borough itself would not take on any of this debt. Its dayto-day operations would remain unaffected. That arrangement has to be stated on the ballot.”

If the referendum passes, school officials have said bonds will

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