The Avon Grove School District is in the process of developing a plan to meet its longterm facilities needs, specifically addressing the aging and overcrowded high school and middle school buildings. On Feb. 27, the district’s Committee-of-the-Whole held the latest in a series of facilities planning meetings at the Fred S. Engle Middle School.

The meeting included a presentation about land-use issues at the State Road campus, a look at the financing of the building options, and a discussion about educational designs of schools.

Keith Lieberman, an engineer with T and M Associates, led the presentation about the high school campus site, and the land-use issues related to the four different building options that are under consideration.

Lieberman outlined a number of areas where the site has zoning non-conformities based on current London Grove Township regulations. He explained that the parking areas are probably too close to the road based on the current regulations. The State Road campus is also likely not in compliance with impervious surface regulations, and the high school's gymnasium also probably exceeds the township’s maximum height rules.

Lieberman emphasized that it is okay for the existing school buildings, which were originally constructed in the late-1950s and early-1960s, to not be in compliance with the present-day regulations. It just means that the site couldn't be developed today in the same way that it was developed back then. However, he noted that making major modifications to the buildings and the site itself could open the door for the township to ask that the school district remedy the issues.

“It's not that you have to remedy them,” Lieberman said on the non-conformities, “it does provide the township with the opportunity to ask you to remedy them.”

Lieberman talked about each of the four building options, and how the various plans would impact the high school campus in terms of land use.

He explained that Option 1D, which calls for a renovation and addition to the middle school to serve grades 6 through 8 and an addition to the high school, would have the highest development density for the site because it adds one grade to the buildings on the already over-crowded campus.

That means that the non-conformities when it comes to parking, impervious surfaces, and maximum building heights would be more significant than they currently are. Additionally, an expansion of the middle school would conflict with the riparian buffer that is in place. This option may also require the district to pay for a traffic study and make road improvements.

For Option 4A, which includes the renovation of the middle school for grades 7 and 8 and a renovation and addition to high school, there was slightly less impact to the site since there is one less grade planned for the middle school than Option 1D. However, the challenges of Option 1D are all present with Option 4A, and will require the school district to obtain several variances from the township regarding parking, impervious surfaces, and other issues. This option would also likely require a traffic study and road improvements. Options that include only additions and renovations to the buildings on the State Road campus could also reduce athletic fields and available parking on the site.

Options 1C and 1A would offer less impact on the high school campus because they include new construction projects on the Sunnyside Road property that the district owns. Option 1C—which was the recommended option of a Facilities Input Group that spent a year and a half looking at various options—calls for the construction of a new middle school for grades 6 to 8, and an extensive renovation and addition to the existing high school to transform it into a modern facility that could meet the needs of students.

Because this option includes the use of additional land, it eliminates some of the the non-conformity issues for the State Road site, and does not add to those issues.

This option would require a parking study for the Sunnyside Road property, but probably not one for the high school campus.

Options 1A includes building a new high school at the Sunnyside Road and moving the middle school grades to the existing high school. The existing middle school could be demolished or used for another purpose. Because this option would only have three grades on the State Road campus, it involves the least development pressures on the site. As a result, it would not require the same number of zoning variances to get the project approved.

Overall, Lieberman said, the State Road campus is a heavily used site, and that is unlikely to change much, regardless of what option the district chooses.

“We found that the site is essentially maxed out,” he said, adding that while they could probably find a way to make any of the four options work, it will be very challenging, and perhaps very costly, to do so.

Regarding going to a township Zoning Board for zoning variances, Lieberman cautioned the school board that that can be a very unpredictable exercise. If the school district has to prove a hardship to gain a variance, it's up to the Zoning Board to grant or reject the variances, and Lieberman said that he has seen instances where very strong cases for hardship have been rejected by a Zoning Board, costing a school district hundreds of thousands of dollars and forcing the plans to be abandoned completely. It might be difficult for Avon Grove to claim a hardship and get a variance for parking or impervious surface rules, and claim that they are necessary because the district is out of space on the State Road site, when the district already owns 150 acres of property in neighboring Penn Township.

Lieberman ranked the options, based solely on land use, and said that Options 1A and 1C are the most favorable, and options 4A and 1D are the least favorable based on the impact that they would have on the State Road campus.

Kenneth A. Phillips, the managing director of RBC Capital Markets, and John Frey, the director of PFM Financial Advisors, provided an overview of some of the financial information that has been collected, ranging from the school district’s current debt to interest rate projections to the impact that debt issuances might have on the school district’s millage rate in the coming years.

Overall, the district is in a strong financial position because it has been rapidly paying off its debt—by as much as $3.3 million annually—and it has a healthy fund balance. That means that Avon Grove will be able to secure low interest rates for long-term bonds.

“It's an attractive time to borrow,” said Frye.

The school district has about $18 million in outstanding debt, and by 2022 most of it will be paid off, freeing up the money that the district currently budgets annually to make its debt-service payments. The district, overall, has a comparatively low amount of debt.

“You're always going to have debt,” Phillips said. “You're always going to have buildings, and you're going to need improvements so you're going to have debt.”

It was noted that the Act 1 Index limit—which caps the percentage of the tax increase that a school district can approve without seeking approval from residents via referendum—makes it much more challenging for school districts to plan a construction or renovation project. Careful planning is necessary in order to stay within the Act 1 Index.

A large construction or renovation project will certainly require a tax increase, leaving less room under the Act 1 Index limit to pay for other educational initiatives. Since most of a school district’s costs are fixed, it’s difficult to reduce expenditures from one year to the next.

Superintendent Dr. Christopher Marchese said that the district has made projections about the impact that options will have on the budget so that they won’t force cuts to the educational program.

The district will need to increase millage rates to make sure that they don’t completely drain the fund balance or endanger the district’s bond rating, which ensures that Avon Grove secures favorable interest rates.

Daniel Carsley, the director of business administration, outlined a number of different financial scenarios based on various borrowing levels. There are many different variables that could impact the financing of the project, so projections are typically only reliable when they go out a few years, and are generally less reliable when they are extended out further than that.

One major area where there is uncertainty is the potential of reimbursement for a portion of the total costs from the state through the PlanCon process. At one time, the state would reimburse as much as 15 to 20 percent of the total costs of a construction project to the school district. However, for much of the last decade, the state hasn’t been offering the reimbursements at all, or has been late in approving the reimbursements. A hold was placed on them during the recession around 2008 and 2009, and the state has been facing revenue shortfalls of its own, even as the economy has improved.

Phillips said that for Avon Grove’s project, they aren’t relying on any reimbursements to be forthcoming because of the uncertainty.

Carsley explained that the district has already submitted PlanCon documents with the state for a project, locking in Avon Grove's place in line for reimbursements if the state does resume them. The options with new construction would be eligible for reimbursements under the documents that the district filed, while the options with only renovations—options 1D and 4A—likely would not be aligned with those documents, Carsley said.

During the course of the discussion, with school board members asking questions, one of the points raised was that a new construction project would offer a savings over renovations to buildings that are 50 or 60 years old. There will be savings on energy costs, and a new building would allow the school district to get rid of the modular classrooms that are now used widely in the district because the schools are overcrowded. Right now, the district spends about $250,000 annually on the costs of the modular classrooms, and that money could be used for a different purpose with new construction.

Marchese emphasized that one long-term goal for the district is to not rely on modular classrooms to accommodate increased enrollment. They want the school buildings to be safe and secure, and to be able to meet the needs of all students.

Another goal that Marchese and the administration have made clear is that they want the middle school to have three grades—six, seven, and eight. The superintendent said that the three-grade middle school, which is the most popular configuration for middle schools in the U.S., is important to the social, academic, and emotional development of students.

Another initiative that the administration wants to support with the construction project is STEM education and incorporating technology into the curriculum, especially in the middle school and high school. Avon Grove places a heavy emphasis on science, technology, engineering, math, and the arts, and the existing buildings aren’t designed for 21st century education, and they do not offer the flexible learning spaces that allow for the communication and collaboration.

“We are emerging as a leader in Chester County,” Marchese said of the district’s focus on technology education. “We are doing phenomenal things in Avon Grove because the focus is on teaching and learning.”

Marchese showed two short videos that illustrate the kind of flexible school spaces that would align with what Avon Grove is trying to provide to its students.

The superintendent said that before the school board can make a decision about what kind of building project is the best fit for Avon Grove, it must make some decisions about the educational direction of the district. Does Avon Grove want a middle school for grades six, seven, and eight?

He encouraged the school board to have a discussion about that at the next facilities planning meeting, which is set for Thursday, March 8. The meeting will begin at 6 p.m. at the Penn London Elementary School.

School board president Tracy Lisi also asked each of the board members to consider the amount that they would approve the district to borrow to pay for construction or renovation projects, and to come to the March 8 meeting prepared to discuss the maximum amount of borrowing.

Once discussions about the configuration of grades and maximum borrowing levels take place, the school board should have a better idea of the direction that they are heading in. The school board is expected to make a decision about how to address the district’s facilities needs in April.

After the March 8 meeting, other upcoming facilities planning meetings take place on Tuesday, March 27 at the Penn London Elementary School, Tuesday, April 3 at the Fred S. Engle Middle School, and Thursday, April 12 at the Avon Grove High School.