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Williams College "Bonanza"By Susan Bush
12:00AM / Tuesday, November 08, 2005
Williamstown – A 1999 Williams College pledge to minimize property tax rate impacts generated by the cost of building a then-proposed new elementary school has evolved into a gift that may very well keep giving.
College President Morton O. Schapiro announced on Nov. 7 that the college is initiating a $1.1 million endowment fund benefiting the Williamstown Elementary School. The revenues will exclusively target capital repair projects at the school. The funds may not be used to pay for school operations or supplies.
The endowment fund is being created as the Williamstown Elementary School Building Renewal Fund.
Speaking during a Nov. 8 telephone interview, Schapiro noted that the elementary school is a beautiful building and a point of pride for the town. An endowment fund will ensure that any needed repairs can be accomplished within a reasonable amount of time.
“There’s no reason this building shouldn’t be a real jewel for the next 40 years,†Schapiro said.
School Superintendent Rose Ellis termed the fund "a bonanza for the school and for the town."
Maintainance, repairs, and upkeep of school buildings are always a financial challenge for education systems nation-wide, Ellis noted.
"Education tends to put maintenance at the bottom of the heap," she said. "This is one of the reasons that we have so many [school] construction projects going on around the country now."
The endowment fund is being launched while the elementary school building is less than five years old, she noted.
"The opportunity is for us to be able to have and grow this fund while the building is young and new," she said. "This lifts the burden [of repair and maintenance costs] and underscores the wonderful partnership we have with Williams College. This is a beautiful, beautiful building. I am going to be one of those lucky superintendents that doesn't have to defer maintenance."
In 1999, college officials announced that the college would contribute between $1.5 and $2.5 million to construction of the Church Street school. The contribution was meant to keep property tax hikes generated by construction costs at $.75 per thousand dollars of assessed property value. The contribution was to be paid over a 10- to 12-year span.
Town voters ultimately approved new school construction and the school was opened in September 2002.
Interest rates affecting the project’s financing proved to be much more favorable than anticipated and the college was able to meet it’s property tax impact promise after delivering a total of $394,954.
College officials could have honored their commitment by simply writing a $1.1 million check to the town, but after several months of discussion with town officials including Town Manager Peter Fohlin, the decision to create an endowment fund was made, Schapiro said.
For the next five Williams College fiscal years, beginning with the current college fiscal year, $221,009 will be placed in the endowment fund. The fund will be managed by the college and college officials will report to the Town Manager and the Williamstown Elementary School Superintendent about all fund activity and the fund balance.
Schapiro said that the fund will be managed as an endowed account with about 4.5 percent of the principal devoted to a “spending account.†Any additional earnings or financial growth are returned to the principal, which permits endowment fund growth.
Town officials may request that the college relinquish the fund principal to reimburse payments for work done at the school, however, if the principal remains untouched, it will not be capped and may continue to grow without restriction, according to information provided by the college.
“An outright gift of $1.1 million would have been very restricted in use,†Schapiro said. “This [endowment fund] could grow year after year, and once it reaches $2.1 million, the town can cash it in if it wants to.â€
Schapiro noted that, if no revenues are removed from the fund over the first five years, the fund will likely total well over $1.1 million. Continued growth would mean continued increases in the fund’s value, he said.
Speaking on Nov. 8., WES School Committee Chairwoman Judith Fraser termed the fund “an invaluable resource to town residents.â€
“The gift is helping the town protect its’ investment in the school,†she said. “This will give us the means to plan and pay for various maintenance needs.â€
While speaking on Nov. 7, Fraser noted that school and town officials grapple annually with the allocation of “limited public resources to meet the needs of the town.â€
“And each year, we find that our town’s short term operational needs foreclose our ability to make adequate long-term investments in town buildings and infrastructure,†Fraser said. “The cumulative result is years of deferred maintenance, which was painfully evident in the condition of the former elementary school in its final years.â€
The endowment fund “helps provide school and town officials with the means to break this cycle and face our responsibilities with new vigor and confidence,†she said.
Susan Bush can be reached via e-mail at suebush@iberkshires.com or by calling 802-823-9367.
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