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BY MATTHEW STONE
Staff Writer 10/07/2008

AUGUSTA -- Facing the prospect of reduced revenues during the coming budget cycle, the state Department of Education will delay issuing bonds to finance 12 pending school construction projects.

District superintendents and Department of Education officials said Monday it is too early to know how severely the funding delays will affect the timelines for building the new facilities.

The state will delay payments by six months on some construction bonds and by a full year on others. The delays in bond payments apply to 12 of 20 pending school construction projects.

The nation's credit crunch has complicated efforts by some state governments -- including California and Massachusetts -- to access financing. But the state's decision to delay construction bonding is most directly an outcome of reduced revenue expectations, Department of Education spokesman David Connerty-Marin said, and not necessarily the result of an inability to secure financing.

By delaying bond payments, Connerty-Marin said, the Department of Education is free to devote $9 million more in funding during the upcoming budget cycle to educational programming rather than construction financing. The state awarded nearly $873 million in general purpose aid to local school districts during fiscal 2007, according to Department of Education figures.

"We're delaying the bonding," he said, "but that's not the same as delaying the project."

Department officials made superintendents aware of the bonding delays last week, the same week Gov. John Baldacci ordered all state agencies to find budget cuts worth 10 percent of current spending levels.

"It's pretty clear that there's a lot of pressure there," Connerty-Marin said. "If we can preserve projects but move them back, I think that's a very responsible thing to do under the circumstance."

In Farmington-based School Administrative District 9, Superintendent Michael Cormier said the bonding delays are likely to push back the timelines for construction on a new elementary school and renovations to Mount Blue High School.

"Probably, the school would open up to a year later than we thought it might open," Cormier said of the proposal to construct a school serving students in pre-kindergarten through grade 3.

But the bonding delays afford the district more time to plan the new and renovated facilities, he said.

"This may, for us, be a gift of time," Cormier said.

Funding for the construction of new schools in Chelsea and Jefferson, both of School Union 132, will be delayed by one year under the Department of Education's move.

The state will issue bonds for the projects in the spring of 2011, rather than the spring of 2010, as originally planned.

"It's a serious concern for us obviously, because it is how the projects will eventually be funded," Union 132 Superintendent Frank Boynton said. "We're trying to avoid or minimize the effect of a delay as much as possible."

The Chelsea school project, which would result in a 305-student school for students in kindergarten through grade eight, has earned preliminary approval from residents and the state board of education.

Jefferson's bid for a new school earned residents' backing in a straw poll last week and a nod from a state board of education committee on Monday.

The state typically issues a bond at the halfway point of construction.

"One step at a time, we're still moving forward," Boynton said. "The issue with this is how soon the bond issued. We're looking at ways to get that to work for us."

School Administrative District 22 Superintendent Richard Lyons said he will explore alternative financing measures to keep a high school building project in his district -- which serves Hampden, Newburgh and Winterport -- on track.

"Can we bond multiple times, for example?" Lyons said.

"Here, you may be looking to construct some nontraditional options."

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