Cape superintendent: District in desperation mode

Enrollment growth and rising operating expenses, combined with dwindling federal funds and the lack of a tax increase since 2018, are driving the Cape district’s revised May 21 referendum, officials said at an April 21 press conference at the district office.  

“We are in desperate need of additional operating money and also in desperate need of additional space at Cape Henlopen High School, which is now over 2,000 students,” said Superintendent Bob Fulton.

The district is growing by 200 to 300 students a year, which comes with additional expenses, Fulton said. The last referendum passed by district residents in 2018 increased taxes by $46 a year, he said, and a planned 2020 operating expense referendum was canceled due to the pandemic.

Since 2014, the district has grown by 1,500 students and 160 new employees, and it has completed almost 10 major capital projects – Frederick D. Thomas Middle School is set to open in September in Lewes – totalling nearly $300 million, he said. The district now has more than 6,600 students.

Cape is the top-performing district in Delaware and is outshining schools in other states, Fulton said, noting students regularly accomplish feats in the classroom, on the field and on stage.

A new expense this year arose from the hiring of safety and security personnel, Fulton said; every district school has at least one resource officer or constable. Additionally, the district will continue to hire every position it qualifies for in order to keep class sizes small, he said.

The local expense for payroll is $1 million every two weeks, he said. The district now has more than 1,000 employees and continues to grow, he said, and every new position costs between $30,000 to $40,000 in local share, not including raises and benefits. 

The district is also approaching scheduled technology and curriculum replacement cycles as well as playground and athletic field maintenance and upgrades, said Cape Finance Director Oliver Gumbs. 

Reserve funds have not been added to in several years, and the $1.4 million remaining in federal pandemic funding must and will be spent by Sept. 30, Gumbs said.

The Elementary and Secondary School Emergency Relief Fund was allotted during the pandemic to address the impact of COVID-19. The district has used the federal funding to get by the past several years, Fulton said.

Land is needed to build a new district office so the current one on the Cape High campus can be removed and the high school can be expanded, Fulton said. The new district office would also house employees working from the Fred Thomas Building on DuPont Avenue, he said.

The only landowner who responded to the district’s queries regarding selling their property offered a 102-acre parcel along Cedar Grove Road for $15 million, Fulton said. On this land, the district can construct a $21 million district office and a $6 million bus parking and maintenance facility.

With the office gone, Cape High can be expanded with adequate parking and stormwater management facilities on site, Fulton said, and the district will submit a certificate of need to the state next year to create a school addition.

The cost of land will only go up, Fulton said, noting land prices have doubled since the district purchased the property for nearby Love Creek Elementary for $75,000 an acre 10 years ago; the cost is now $150,000 per acre.

The property will allow for a centralized office and bus facility, with enough space for a future school or other projects, Fulton said. The local area is populated, so it would be easier to access for more people, he said, noting if the land was developed with 300 to 400 homes, it would be more congested.

Regarding the tax impact, Fulton said 90% of the requested increase is for current expenses.

The referendum seeks a $0.086 increase to the debt service tax rate to purchase the land and build facilities. For these improvements, the average homeowner would pay $24 per year, or $2 per month, the first year. In subsequent years, the rate would decrease.  

The referendum also calls for a $0.305 current expense tax rate increase that will generate almost $4.6 million annually in revenue for staffing, utilities, technology and instructional materials. This increase will cost the average taxpayer $85 per year, or $7 per month.

Together, the impact on the average taxpayer would be $110 per year, or $9 per month. Fulton said he calculated the average taxpayer’s costs based on the assessed value of homes currently selling in the $500,000 range. 

The assessed value is not the same as the appraised value, Fulton said. For example, a local home that sold for $450,000 a couple months ago has an assessed value of $26,600, he said.

The assessed value, not the home’s sale price or appraised value, is used to determine a home’s tax impact. The home with an assessed value of $26,600 would see an increase of $81 annually, or almost $7 a month, Fulton said, in the 2025 fiscal year for both the current expense and debt service tax rate increases.

The tax rate for this home would increase by an additional $6 per year in 2026 and by almost $17 in 2027 for a peak high of $104. In 2028, Cape High will be paid off, Fulton said, and the tax impact will decrease.

In the 2028 fiscal year, taxes will decrease by almost $29, and will decrease another $6 in 2029, district figures show. Every penny raised or lowered equals $150,000 in revenue for the district, Fulton said.

The state allows districts to go to referendum twice in a year, Fulton said, so regardless of what happens May 21, Cape is unable to hold another vote until March 27, 2025.

This timetable increases the importance of the upcoming referendum, Fulton said, because operating funds would be collected this fall. If the referendum fails, it will have a significant impact on school operations, including safety and security and staffing, he said.

If the district is unable to purchase the land on Cedar Grove Road, then any addition at Cape High is further delayed, Fulton said, noting the last thing he wants to do is put modular classrooms on the school property, as they would also cause safety and security issues and challenges. 

Tax assistance programs are available for senior citizens, disabled residents, disabled veterans, and property owners who have been full-time county residents as of July 1, 2024 and whose annual income doesn’t exceed $15,800 for single residents or $20,000 if married.  

For more information on assistance programs, go to capehenlopenschools.com/domain/670. To view Fulton’s presentation, go to tinyurl.com/5n8yc5mw

The referendum is set for Tuesday, May 21. Polls will be open from 7 a.m. to 8 p.m. at Cape High, Mariner Middle, Beacon Middle, Rehoboth Elementary and Lewes Public Library.