Tisbury is free to skip a Proposition 2 1/2 override vote on the $26 million borrowing article for the town school renovation and addition, following a decision announced this week by the Massachusetts Department of Revenue.

The state ruling means the town can choose to skip a ballot vote, but a two-thirds majority at a special town meeting is still required to authorize issuing an additional $26 million in bonds. The town had previously set that meeting for Sept. 20.

“[T]he additional $25,610,841 of project costs are deemed to be covered by the debt exclusion approved by the voters on June 22, 2021 and, therefore, are excluded from the limits of Proposition 2 1/2,” wrote Deborah Wagner, director of accounts for the DOR’s Division of Local Services, in a letter to town administrator Jay Grande dated August 22.

Tisbury voters overwhelmingly supported last year’s $55 million borrowing article to update and expand the 1929 school with extensive reconstruction that includes removing hazardous materials and building a new gym.

Increased labor and materials costs have subsequently pushed up the project budget by more than 50 per cent, to more than $81 million, although construction managers told the school committee this week they have found about $900,000 in savings as guaranteed maximum price (GMP) bids have come in from contractors.

“We have a confidence level that we’re not going to exceed the ask amount,” said Jonathan Rich of WT Rich, construction manager at risk for the school renovation and addition, at an online meeting of the Tisbury School building committee on August 22.

To prove to the state revenue department that the increased costs are due to inflation and not to changes in the voter-approved project, the town submitted a sheaf of documentation including reports on the original and revised project costs and an analysis of the reasons for the cost increase.

Meanwhile, next week teachers and staff are set to return one last time to the old school, followed by students after Labor Day. But almost as soon as they arrive, they’ll begin packing to move out.

New modular classrooms installed on the West William street side of the building are expected to be ready in November, once utility work is completed.

“We still do not have a final [electrical] design from Eversource,” Mr. Rich said at the August 22 meeting.

While workers began removing hazardous materials from the gym last week, WT Rich project manager Evan Moore said structural demolition will wait until after Sept. 20.

“We’re on hold right now until after the town vote,” he said.

The project team is also waiting to order structural steel, as a safeguard against costly cancellation and restocking fees in case the special town meeting fails to reach a two-thirds majority in favor of the $26 million borrowing request.

Steel may well rise in price over the weeks to come, Mr. Moore said, but the difference would fall far short of the potential six-figure penalties for canceling.