Sunday, May 9, 2021

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Graham, NC 27253
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Commissioners hesitate to give schools permission to tap their own reserves for maintenance projects

Alamance County’s commissioners have declined for the time being to allow the local school system to draw more than $9.6 million from its own capital reserves for various construction and maintenance projects that lie outside the scope of a $150 million bond package that voters approved in 2018.

During a regularly scheduled meeting on Monday, the commissioners voted 4-to-1 to withhold the requested funds for a period two weeks to ensure that the proposed projects go through the school system’s usual review process.

A majority of the county’s governing board accepted this delay after commissioner Craig Turner pitched the two-week deferral to placate some of his colleagues, who were alarmed that the school system was trying to push through construction and repair work without adequate vetting.

The projects which the school system’s administrators presented to the commissioners on Monday weren’t exactly new to them or the members of the Alamance-Burlington school board, which had endorsed the request to the commissioners last week by a margin of 5-to-2.

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The projects which the school board sent to the commissioners include nearly $4.1 million in roof repair and replacements at four area schools, nearly $320,000 in masonry work at Haw River Elementary, and more than $2.2 million in road improvements at Southern High School and an as-yet-unnamed high school that will be constructed with the proceeds from the aforementioned bonds. Also included in the school system’s to-do list were nearly $3 million in additional enhancements that the bond package omits for the new high school, whose proposed site off of NC 119 is situated near the Honda Power Equipment plant in Swepsonville.

Todd Thorpe, one of the school system’s assistant superintendents, had alluded to many of these same projects two weeks ago as the commissioners were considering whether to tack another $20 million in debt onto the voter-approved bond package. A consultant in the county’s employ had suggested that the county could add this eight-figure “premium” to the $150 million package, and still keep its debt payments within their projected levels, thanks to historically low interest rates.

Thorpe assured the commissioners that he had a whole host of projects that would benefit from this additional bond debt. The assistant superintendent even flourished an inventory of $6 million in construction and repair work that he said he was good to go – save for a lack of financing that he hoped would be resolved by the proposed premium. The commissioners nevertheless upended the assistant superintendent’s plans when they authorized only enough added debt to cover the $800,000 to $1.3 million that the county would pay to issue the bonds.

After the commissioners chose to forgo most of this premium, Thorpe openly announced that he would approach the school board with a proposal to tap the school system’s capital reserves for the $6 million to bankroll the recommended projects. By the time Thorpe appeared before the school board last Tuesday, that $6 million had ballooned to more than $9.6 million in putatively urgent repairs and improvements.

The items on Thorpe’s expanded to-do list were no surprise to commissioner Pam Thompson, who had served on the Alamance-Burlington school board before her elevation to the board of commissioners last fall.

“It’s been studied for perhaps the past year,” the former school board member recalled. “It’s been real methodical.

“I’m hearing this hesitation and I’m wondering where it’s coming from because we’ve known about this for a long time,” she added. “This is beating a dead horse. [School board member] Tony Rose used to say that to me all the time, and I just want to pop him.”

But these same projects were as familiar to all of Thompson’s fellow commissioners – three of whom also joined the county’s governing board since last year’s general election.

Commissioner Bill Lashley, who had been present for the school board’s discussion last Tuesday, was flabbergasted by the school system’s apparently discombobulated deliberations. He recalled that the school system’s higherups actually turned to him for the balance for their own capital reserves just because he had been taking copious notes. He added, however, that his figure he gave them turned out to be wrong – although no one realized the mistake at the time.

“There’s a lot of confusion here,” he acknowledged. “I have reservations about the numbers that are in front of me.”

In response to Lashley’s concerns, Alamance County’s manager Bryan Hagood told the commissioners that the school system’s capital reserves are currently on track to reach $24.5 million by the end of the fiscal year. He said that the proposed $9.6 million in outlays would bring the balance down to just under $15 million. He added that the county’s long-term capital financing plan calls for this nest egg to be gradually drawn down over the next several years, ultimately bottoming out at $5.7 million in 2026. Hagood nevertheless said that these numbers would be further refined when the school system’s bond package went out to potential investors on Tuesday.

John Paisley, Jr., the chairman of Alamance County’s commissioners, objected that Thorpe’s inventory hadn’t been vetted by the school system’s technical review committee or its facilities review board, which generally get a crack at such projects before the contracts are let. Thorpe said that there simply wasn’t time to submit some of these items to these appointed advisory boards.

“Some of it there is some urgency, especially with the new high school,” the assistant superintendent said. “We are looking at going under contract, and the last thing you want to do is have a lot of change orders…It’s sensitive that we get started. We have timelines to meet, and if we really want this new high school ready by June of 2023, we have some quick deadlines to meet.”

Thorpe added that workers will begin to “mobilize” on the site of the new high school’s as soon as next week presuming that the school board signs off on a pending contract. He gave the commissioners a hard deadline of 30 days to finance the suggested enhancements before mobilization ends.

Thorpe also acknowledged that some of the projects on his list had been pulled from the school system’s original bond package due to higher-than-anticipated construction costs and other considerations. He noted, for instance, that the $2.2 million in proposed road work was dropped from the package because the N.C. Department of Transportation has agreed to reimburse the school system for these expenses.

The commissioners also received some explanation for the school system’s seemingly sudden repair needs from superintendent Bruce Benson.

“We’re still catching up [with maintenance],” he assured the county’s governing board. “Once we get caught up, we should be able to sustain what we’re doing by applying a percentage of the replacement cost for our facilities cost…and that’s what we’re trying to work toward.”

Paisley was nevertheless aghast that the school board had only received Thorpe’s proposed inventory on the same day it was asked to sign off on its suggested $9.6 million in outlays.

“I’m just disturbed that Tuesday school board members were presented with this disaster of $9 million,” the chairman of the commissioners said, “and then it came to us, and it was the first that we knew there was an emergency of over $9 million…It just bothers me that we’re not going through the normal process.”

Turner eventually rode to the rescue with his proposal to postpone the school system’s request until the commissioners hold their next regularly scheduled meeting on May 3.

Thorpe said that this two-week delay wouldn’t throw off his carefully wrought timetables as long as it’s a “true two weeks” and not just the first in an endless succession of deferrals.

The commissioners ultimately agreed to withhold their permission for most of the proposed projects until May 3. They nevertheless signed off on the funds for the new high school’s proposed road work in response to a last-ditch appeal from the school system’s superintendent Bruce Benson.

“I am concerned about the new high school specifically, and the timeline that we have to open it” he added. “I know from experience that when you get behind in construction, you tend to stay behind in construction.”

Benson went on to ask that for the immediate release of the $523,657 for the road improvements at the new high school. The commissioners voted 4-to-1 to accept Benson’s suggestion and to postpone the rest of the items until May 3. Pam Thompson cast the lone vote of dissent due to her sense that the delay was unnecessary.

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