Alamance-Burlington school board members voted 5-2 this week to ask Alamance County’s commissioners for $9.6 million in capital reserve funding that would be used for repairs at four existing schools, road improvements, and add-ons for the county’s forthcoming seventh high school that weren’t part of the original scope of work outlined in the $150 million bond package that voters approved in the 2018 general election.
The school board’s vote follows a decision by Alamance County’s commissioners last week not to sell for more than the maximum amounts approved by voters.
Favorable bond market conditions and current interest rates meant the county could sell the ABSS bonds for $150 million, generating up to $168.3 million in total bond funding for ABSS; selling the ACC bonds for $23.3 million would generate approximately $3 million in total bond funding for ACC, based on figures that Alamance County Bryan Hagood cited last week. The commissions have opted instead to sell the bonds at below face value to keep the debt in line with the combined total of $189.6 million that voters originally approved for ABSS and ACC in 2018.
“If the schools would’ve [gotten] the extra money, it would’ve meant the county was going to have higher debt service payments every year.”
– county commissioner bill lashley
“If the schools would’ve [gotten] the extra money, it would’ve meant the county was going to have higher debt service payments every year,” Alamance County commissioner Bill Lashley said Tuesday afternoon in an interview with The Alamance News.
Yet that could’ve triggered a future budget deficit or additional tax increases to cover debt service payments, said Lashley, who works as a commodities trader and also serves as one of two commissioner liaisons to the school board. (Commissioner Pam Thompson, a former school board member, is the other liaison; she and Lashley attended the school board’s meeting at central office on Tuesday.)
School board members voted 5-2 Tuesday afternoon to ask the county to release $9.6 million in school capital reserve funding to cover the estimated costs for add-ons at the new high school, roadwork, and repairs at four existing ABSS schools. The add-ons (or “preferred alternates” and “additional alternates”) weren’t included in the original estimated $67 million cost to build the new high school that was outlined in the 2018 bond package for ABSS, as well as repair projects at four existing schools (see accompanying chart for a detailed breakdown).
The county currently has about $10.5 million on hand in school capital reserve funding, which comes from a combination of sales tax and property tax revenue, ABSS finance director Jeremy Teetor told school board members this week.
School board member Ryan Bowden voted against asking the county for the $9.6 million in capital reserve funding, telling his fellow board members that, “as a taxpayer and a businessman,” he has reservations about exhausting the school capital reserve funding all at once. School board member Patsy Simpson also voted against asking the county to release the capital reserve funding, telling her fellow board members that she was opposed because of the alternates, which she said “are luxuries.”
The $9.6 million in reserve funding that ABSS will ask the county “to release” would be used for the following:
· $4.4 million in estimated costs for roofing projects and minor repairs at four existing schools (Haw River Elementary, Woodlawn Middle, Graham Middle, and Graham High schools);
· $2.2 million for required road improvements (primarily turning lanes at each school entrance) at the site of the new high school along N.C. Highway 119 and along Southern High School Road;
· $2.7 million for “preferred alternates” at the new high school;
· $264,975 for “additional alternates” at the new high school.
The $150 million bond package that the county’s voters approved for ABSS in November 2018 included the estimated $67 million cost for construction of a seventh high school, but didn’t include more than $2.9 million in costs for extras. Those costs reflect $2.7 million in “preferred alternates” and $264,975 in “additional alternates” for the new high school, based on figures that ABSS assistant superintendent Dr. Todd Thorpe presented Tuesday afternoon (see accompanying chart).
Asst. superintendent says ABSS would be reimbursed for $2.2 million in road improvements
The state Department of Transportation (DOT) is requiring ABSS to complete the road improvements at the site of the new high school and at Southern High School, Thorpe said Tuesday, adding that DOT “has committed” to reimburse ABSS for those costs. The road improvements at Southern High School are being required as part of a forthcoming $20.7 million expansion that will be funded by proceeds from the 2018 bond package for ABSS.
The new high school is targeted for 90 acres off N.C. Highway 119, near the Honda Power Equipment plant in Swepsonville, and is currently scheduled for completion in the spring of 2023, based on timeframes that Thorpe previously outlined for the school board.
ABSS would exhaust nearly all of the school capital reserve funding the county currently has on hand, Teetor confirmed for school board members this week. The capital reserve fund “built up pretty quickly” after the “tax rate changed,” but how much ABSS receives in school capital reserve funding fluctuates annually, he said.
Alamance County’s commissioners voted in June 2019 to raise the county’s property tax rate by 8 cents, from 59 cents to 67 cents per $100 of valuation; 7.04 cents of that amount was earmarked for future debt service payments for the $150 million bond package for ABSS and $39.6 million bond package for ACC that voters approved in 2018.
The bonds for ABSS and ACC are currently scheduled to be sold next Tuesday, April 20, Hagood said last week in presenting commissioners with two options for the sale. Selling the bonds for ABSS at $150 million could yield an additional $18.3 million (for a total of $168.3 million) for the school system, based on market conditions and interest rates as of mid-March, he said.
Also scheduled to be sold next week are $23.3 million in bonds for ACC that will be used to fund construction of a biotechnology center of excellence and a student services center on the community college’s main campus in Graham, based on timeframes that ACC and county officials established in late 2018. The remaining $16.3 million from the overall total of $39.6 million in bonds that voters approved for ACC are scheduled to be sold in September 2022 and will be used for renovations and other new facilities, including construction of a public safety training center on 90 acres of land in Green Level that ACC is leasing from Martin Marietta Materials.
ACC president Dr. Algie Gatewood told the commissioners last week that the extra money generated by the “bond premiums” would be used to for furnishings, fixtures, and equipment (“FFE”) for the forthcoming biotechnology center of excellence and an expansion of a nearby parking area. Construction of the $17.4 million center of excellence is scheduled to begin this spring and targeted for completion in June 2022, based on timeframes that ACC and county government officials have previously established.
Hagood acknowledged to the commissioners last week that the additional funds generated by “bond premiums” would also have to be repaid within the existing 20-year term for debt service payments for the ABSS and ACC bonds.
Thorpe, for his part, estimated for the commissioners last week that ABSS will save a net total of $6.1 million for several ABSS bond projects as a result of bids coming in lower than expected.
However, Thorpe said that rising costs for steel are driving increases in the previous estimates for renovations at Southern High School and Williams High School, which were also included in the 2018 bond package.
During the school board’s discussion this week, Simpson blasted the county commissioners for not selling the bonds for the maximum amount possible, generating up to an estimated total of $168.3 million in bond funding for ABSS.
“I watched the county commissioners’ meeting,” Simpson told her fellow board members Tuesday afternoon. “We’ve done our part; for years they said we were not up front, we didn’t disclose. It appears we have an opportunity to address [our needs] without liquidating the capital reserves fund. I’m just not understanding – knowing the neglect we’ve had over the years – what else we could have done to make it more clear to them. I guess I’m just venting, to let the public know that this was an opportunity to finally catch up in the county and the board [chose] not to do that. But they took care of themselves and the expense of the bond that they would have had to incur. That shows me they could have gone a little bit further with the needs that were demonstrated to them.
“For the commissioners to say we’ve got to neglect something – they should’ve known that if they were concerned we were about to liquidate that money – they had another method,” Simpson continued. “At some point in time, all of us as taxpayers are going to have to pay the price. We need to use CARES Act money, to the extent we can, to help out the county, but it’s not our job to be reserving and not taking care of our needs – it’s their job to fund it.”
Governor seeking statewide bond referendum that includes $2.5B for school construction
ABSS is estimated to receive a potential total of more than $100 million in federal coronavirus relief funding, based on the latest figures that Teetor has outlined for school board members. ABSS received approximately $35 million through the two federal Coronavirus Aid, Relief, and Economic Security (CARES) Act stimulus packages that Congress passed in March and December 2020.
ABSS stands to receive up to approximately $70 million – nearly double what it received from the CARES Act – from the latest stimulus package, the American Rescue Plan Act of 2021, that Congress passed in March, based on preliminary details he’d received from the state Department of Public Instruction (DPI), Teetor told school board members last month.
Meanwhile, ABSS is also estimated to receive $3.3 million in capital funding from the county for the upcoming 2021-22 fiscal year, based on a long-range capital funding plan that the county commissioners adopted in June 2019.
Governor Roy Cooper also recently renewed his earlier call to place a statewide school construction bond on the ballot. Cooper announced on March 24, as part of his annual budget proposal, placing a $4.7 billion referendum on the ballot for November 2021 that would, if approved by voters, set aside $2.5 billion for K-12 school construction needs, according to the governor’s office.
The county bonds for ABSS will be used to fund construction of a seventh high school, which is planned for 96 acres along N.C. Highway 119 within the Hawfields community in the eastern part of the county, and to renovate eight existing ABSS schools.
The bonds for ACC will be used to fund construction of the forthcoming biotechnology center and a student services center, both of which are planned for the college’s main campus in Graham.
Read newspaper’s editorial comment (“School board ingrates”) on school board action, comments: https://alamancenews.com/school-board-ingrates/