How is the reimbursement rate from the MSBA determined?

The MSBA base reimbursement rate is 31%. This number is then increased based on Community Income, Property Wealth, and Poverty Factors. For Amherst, this figure is 64%**.  However, THIS IS NOT THE FINAL % REIMBURSEMENT THAT THE MSBA WILL PROVIDE TO THE PROJECT.

This figure can be increased with Incentive Points granted by the MSBA for a variety of reasons. (See http://www.massschoolbuildings.org/sites/default/files/edit-contentfiles/Documents/Guidelines_Policies/Reimbursement_Rate_Calculation.pdf)  For Amherst, this figure is 68%.  In fact, 2 of these percentage points are “provisional” on how “green” the project actually turns out to be and THIS IS ALSO NOT THE FINAL % REIMBURSEMENT THAT THE MSBA WILL PROVIDE TO THE PROJECT.

This maximum is then decreased based on the certain caps on items and unapproved or ineligible portions of the design and building process – that gets us to the effective reimbursement rate. For this proposal, that number is estimated to be somewhere around 50%. THIS IS ALSO NOT THE FINAL % REIMBURSEMENT THAT THE MSBA WILL PROVIDE TO THE PROJECT.

The Project Scope and Budget includes a figure called the Maximum Facilities Grant – that is, the maximum amount of money Amherst can possibly get from the MSBA. No town ever actually receives that amount, though, as there are always expenses that are incurred during construction that have not been anticipated and that are not eligible for MSBA funding. So, WE WILL NOT KNOW THE FINAL % REIMBURSEMENT THAT THE MSBA WILL PROVIDE TO THE PROJECT UNTIL AFTER IT IS COMPLETED.

This is part of the reason that Town Meeting must appropriate funds for the entire project cost, not just the estimated Town portion.  For Amherst, the total project budget will be  ~$67 million and the Town’s portion (that will require a debt exclusion approval by taxpayers) will be approximately $33 million, not that the taxpayers got to see that amount on the ballot.

The language in Article 2 about reimbursement is confusing.  It lists the 68% but it is not made clear that this is nowhere near the reality of ~50%.  The maximum facilities grant is mentioned but no dollar figure is given.  Hopefully, it will be made crystal clear when Town Meeting is asked to make an important financial decision that will affect the Town for decades to come.

Here is a link to the Project Scope and Budget document, or at least the parts of it that have been posted by the school administration (Exhibit B that describes the Scope  of the project has not been included).

https://drive.google.com/file/d/0By0mz4P0v3bWWXR0ZElmUlE5NG8/view

 

**The District had been quoting 68% throughout the feasibility study until this summer when they were told by the MSBA that they were using an outdated formula to calculate this figure.  This means that the maximum reimbursement rate will be four points lower than has been publicized.

 

 

 

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