• The total cost of the project will be a maximum of $447 million. This is inclusive of design, construction, furniture, technology, and contingencies to ensure the project will not exceed this amount. It also includes the cost of demolition and the construction of athletic fields.

  • The cost is determined through the work of the project manager, the designer, and the contractor, working with the oversight of the Building Committee. The estimate of construction, which is the largest component, was determined by two separate estimators (one for the designer, one for the contractor) working independently. These estimates were then reviewed together and reconciled to ensure all costs are captured within the estimate. Other costs, including contingencies, were estimated by the project manager based on similar projects.

  • Salem

    • Size = 354,695

    • Enrollment = 1,000

    • Escalated Project Cost ($/sf) = $1,050

    Lexington

    • Size = 510,209

    • Enrollment = 1,100

    • Escalated Project Cost ($/sf) = $1,293

    Watertown

    • Size = 200,032

    • Enrollment = 720

    • Escalated Project Cost ($/sf) = $1,187

    N. Attleboro

    • Size = 266,740

    • Enrollment = 1,025

    • Escalated Project Cost ($/sf) = $1,270

    Revere

    • Size = 422,600

    • Enrollment = 2,450

    • Escalated Project Cost ($/sf) = $1,283

    Waltham

    • Size = 414,854

    • Enrollment = 1,830

    • Escalated Project Cost ($/sf) = $1,163

  • The estimated grant from the Massachusetts School Building Authority (MSBA) is $208 million. Salem will be responsible for the difference of $239 million. Some of that will come through other grants, utility incentives and savings, and other non-property tax revenues, but most of it will be funded through property taxes.

    The MSBA’s funding for grants comes from one penny of the Massachusetts’ state sales tax. It is not subject to federal funding and so it’s not at risk for any federal cuts. Right now, Salem residents pay sales tax every day and those dollars flow through the MSBA to other school projects in cities and towns across Massachusetts, such as the projects in Lexington and Watertown listed above. Approving the debt exclusion ballot question and advancing the new construction project for Salem High School will instead bring that money to Salem.

  • The MSBA determines a reimbursement rate for each community and applies the rate to “eligible costs”:

    • Construction: eligible construction cost is up to $678/sf

    • Fees: eligible fees for design and owner’s project management services for construction cost up to $678/sf

    • Furniture: up to $1,915/student

    • Technology: up to $1,570/student

    • Contingencies: up to 1.5% of construction

  • On May 5th, Salem will have a special election in which voters will be able to vote Yes or No on a “debt exclusion” ballot question. Debt exclusions are mechanisms allowed by state law in which residents of a community can affirmatively vote to allow property taxes to be raised for a specific capital project outside of the limitations imposed by Proposition 2-1/2. Once the bond is paid off, that allowance goes away and the normal limitations return. The language in the ballot question is specified by law. A Yes vote means that you, as a taxpayer, agree to pay an additional amount of property tax related to the project for 30 years, which is the duration of the bond for the project. A No vote means that you do not agree to an increase in property tax for the proposed project.

  • If the funding vote does not pass, the City will instead need to conduct a code renovation to address the problems in the existing building. There are two options to fund that renovation.

    The first is to re-enter the MSBA pipeline at step one, which will take several years during which the cost will escalate 3%-4% annually. That will likely result in a future renovation project that would effectively be as much as the new construction project is today.

    The other is to locally fund the renovation, without using MSBA funds, and phase it over 30+ years. This would consume a substantial amount of the City’s capital budget each year, leaving little remaining capacity for other school and city building projects, road and sidewalk repairs, parks and playgrounds, public safety vehicles, and water/sewer infrastructure maintenance and upgrades. It would impact teaching and learning as the project is carried out around students and teachers for three decades. And, ultimately, it would cost Salem taxpayers a projected $932 million when interest and inflation are considered.

  • The median increase for residential property over the 30 years of debt payments is $682/year (or $171/quarter), which is 10.6% of the current median residential tax bill. Put another way, the median residential taxpayer will, after the 30 years are complete, have paid $20,460 toward the school. Divided over 30 years, it’s $682/year.

    The median increase for commercial property over the 30 years of debt payments is $1,233/year (or $308/quarter), which is 11.2% of the current median commercial tax bill. The median commercial taxpayer will, after the 30 years are complete, have paid $36,998 toward the school. Divided over 30 years, it’s $1,233/year.

    The amount your taxes will change will vary based on many factors, including the availability of non-tax funding like grants and energy incentives that can be applied to the project over time. It may also vary based on new growth to the City’s tax base or other economic factors. Use the tax calculator on this page to find out more about the estimated impacts of a “Yes” vote to your tax bill.

  • As outlined above, if the funding vote for the new High School fails, the City will need to engage in a multi-decade phased renovation of the existing building to ensure it meets current codes and Salem can continue to have an accredited public high school.

    In that case, the median increase for residential property over the 30 years of debt payments for the code renovation option is $909/year, which is 14.1% of the current median residential tax bill. The median increase for commercial property over the 30 years of debt payments is $1,644/year, which is 15.0% of the current median commercial tax bill. Again, you can use the tax calculator on this page to find out more about the estimated impacts of a “No” vote to your tax bill.

  • Costs related to the new high school will appear on tax bills once permanent financing is in place and long-term bonds are issued, which is tentatively scheduled for the spring of 2028.

  • The following measures are built into the current project cost to avoid having to seek a second debt exclusion should project costs exceed what has been estimated:

    • The project has been estimated very conservatively.

    • The construction estimate includes conservative assumptions for escalation and other construction contingencies ($49.1 million in total)

    • The estimate also includes $14.5 million in contingencies, outside of the construction contingencies.

    • Two additional estimates will occur before the project goes to bid. These estimates will provide opportunities for cost savings, if necessary, to align the project with the proposed project cost.

    • The City will continue to pursue grant and non-property tax revenue opportunities to lessen the amount needed from property taxpayers.

  • The City is currently planning for a 30-year bond, so the payments will last for 30 years. Bonding ensures that future residents are also contributing fairly to the cost of the school, and it’s not just current taxpayers alone funding the whole cost.

  • No. By law, when the bond is paid off the debt exclusion ends and the levy ceiling returns to the non-excluded limitation.

  • No. For a debt exclusion, state law only allows the raised funds to be used for the specific project stated in the ballot question approved by voters. In this case, the construction of the new high school building is the only project in the ballot question.

  • No, the tax increase for a debt exclusion applies to all property types – residential, commercial, industrial, and personal property.

  • The estimated total cost to Salem taxpayers after 30 years if the funding is approved and new construction takes place is $428,046,056. If the funding is not approved and the code renovation takes place, the total cost would be $931,931,822, just over half a billion dollars (or 118%, more than double) more.

Financial Questions

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