Moore County's Board of Commissioners is ready to fund the construction of four new schools — those at the top of the Schools Board's revised Master Facilities Plan.
That was the clear message from two meetings the Commissioners held on Tuesday, October 20: a Work Session to look at the options for financing school construction and a joint meeting with the School Board to hear about the revised priority list.
"I think our visions marry up very well," Chairman Nick Picerno said at the conclusion of those meetings.
"By having these joint meetings, I think we have shown something that should be a model for every county across our state," Picerno said.
"Get in a room, lay it on the table, say the pros and cons, show where you disagree, try to work to a middle, and get things done."
Programming the Advanced Career Center
The meeting began with a review of facilities decisions the Board of Education made during their October 12 meeting, rearranging the previously approved Master Facilities Plan to give top priority to the construction of the Advanced Career Center [ACC], near Sandhills Community College, and the next three spots in the priority list to three new elementary schools.
The Commissioners appeared particularly impressed by a presentation of the proposed ACC curriculum by the three current principals of Moore County's high schools.
North Moore Principal Jenny Purvis said, "We want to make sure that, if we build this, we are going to have students there."
So the principals pulled together actual course requests submitted by students last year and compared those with the current offerings at the three high schools.
"We decided to focus on those areas where we have large overcrowding," Purvis said, "where we just can't serve the number of students who are requesting the course."
An example would be nursing, where state law severely limits the number of students in the classroom, and the high schools can't meet the demand from students.
They also highlighted situations in which students requested a course — but not enough students to make it feasible to offer that course on an existing campus.
An example would be advanced auto technology courses, where there are not enough students on any one campus to warrant offering the courses, but combining all those requests at the ACC would allow those students to be served.
For the principals, the process means losing some courses on their home campuses, while gaining other advantages.
"I lose a lot of courses," Pinecrest Principal Bob Christina said. "But we are sharing, because we care about all the kids in Moore County."
He mentioned specifically the possibility of losing the ROTC program, which could become a part of the Global Leadership pathway at the ACC.
"What does that do for me? That frees up space," he said. "I'm not giving up practice fields for them to drill. I'm not giving up classroom space for four periods. That frees up opportunities for my teachers who don't have classrooms, and have to float, to have their own classroom."
"I have had students come up to me everyday," Union Pines Principal Andy McCormick said, "asking about what are the course offerings at the ACC . . . . I think it will be a tremendous opportunity for the students of Moore County — making them shine, making them more competitive across the state and across the country."
"Kudos to all of you," Commissioner Graham said. "We need those service jobs. We need those electricians. We need those plumbers. CNAs. They know then that they want that RN, so they don't waste two years and then decide, "Hey, this nursing's not for me.'"
"There are a lot of pathways to being successful," Commissioner Randy Saunders said. "I'm for anything we can do to give our kids a competitive advantage. I think this is a game changer for our kids."
Funding the plan
"The point that I hope the public will hear is that we are looking after the kids of Moore County, and that we are also looking after the taxpayers of Moore County," Chairman Picerno said, turning to a discussion of funding.
Those taxpayers, however, represent the one great unknown in the funding equation: Will they approve a quarter percent increase in the sales tax rate to help fund the construction of new schools? Voters will be asked that question on the March 1 Presidential Primary Ballot. [See our front page story on the Commissioners' vote to put the sales tax increase on the March ballot.]
The $2.2 million in additional annual revenue that tax would provide is expected to be used almost exclusively for building new schools, and it is expected to increase by two percent or more each year as a result of economic growth.
But that is just one piece of the financial resources the County will bring to bear.
Moore County currently has $18.9 million in a capital reserve fund, and is expected to add an addition $3 million, once the final accounting for FY 2015 is complete. Over the past few years, that capital reserve has grown by $6 million or $7 million each year, so this year's transfer is historically low — primarily because the County paid off some outstanding debt early.
School construction funding projections assembled by the County's financial advisor, Davenport & Co., assume that a $2 million transfer will be available in future years to help fund school construction, a conservative assumption.
Additional money will be freed up as the County retires existing debt from General Obligation School Bonds approved by the voters in 2008. This year, the County will make just over $10 million in loan payments, with nearly $6 million of that attributable to school bonds. But those payments will decline over time, freeing up funds that can be used to fund new school construction.
Those are the County's available cash resources to support school construction.
Davenport also analyzed the County's capacity to take on additional debt and found that the County could borrow an addition $68.9 million over the next four fiscal years.
The bottom line: it appears the county could support roughly $100 million in school construction costs between now and 2020.
Current estimates of the cost of building the top four projects on the Board of Education's Master Facilities plan put the total at just under $119 million. However, that total includes site acquisition, architectural fees, and furniture and equipment. Construction costs, taken by themselves, total $97.7 million.
The Boards agreed that the $2.3 million cost of land acquisition could be covered through the use of NC education lottery funds. Moore County's lottery fund account has a current balance of just under $2.8 million, and is expected to increase by $880,000 each year.
The Davenport analysis looked the possibility of tapping into two sources of funds on the School Board's side of the equation: $2 million in unassigned fund balance and $4.4 million in funds left over from the 2009 School Bond.
Though the size of Moore County Schools' [MCS] fund balance has been a point of contention between the school Board and Commissioners for a number of years, Chairman Picerno granted, during the October 20 meeting, that is has now sunk to a level consistent with good management practices. So that potential funding source was taken off the table.
School Board member Helena Wallin-Miller explained that the $4.4 million in leftover bond funds has already been allocated to upgrades at the three high schools — principally replacing HVAC systems that are 40-50 years old.
"The reality for us is that funding is what we use for some of our capital projects that are important, especially right now, at each the high schools," she said. "It needs to be used for some of our backlog of modernization projects . . . . There is close to $9 million in capital projects that are awaiting funding."
Picerno asked the School Board to reconsider committing those funds to new construction, noting that they have been sitting unused for a number of years.
Agreeing to move forward
"I feel we can get a big number," Commissioner Randy Saunders said, talking about the amount that the County can realistically borrow. "I just ask that you look close at your number. Let's find out how we can get something that works. I feel we are close. We are real close."
"The hardest part for both of our boards is educating the people, educating the taxpayers, why you need to vote yes," said Commissioner Catherine Graham, referring to the sales tax referendum. "It is not going to build something fancy, but to meet the absolute needs of our children. And perhaps remind them that we are taking care of those behind us. At some point in the past, someone took care of all of us, and we had public education in the state of North Carolina."
"And God help us if we ever lose the ability for our people to want to support public education, that educates the child from the ghettos and the child who lives at the Country Club of North Carolina or some other gated community."
"We want you to be as frugal as we are," Commissioner Ritter said, "To bring this number down so that we can bring this number down to do what's right by the taxpayers and our kids."
Commissioner Jerry Daeke, a retired real estate appraiser, encouraged the MCS Administration to look closely at its projected land costs, which he felt were overstated.
The School Board's timeline envisions beginning design work on the Advanced Career Center on January 1.
The Commissioners suggested delaying that start date until after the March 1 referendum on the proposed quarter-percent sales tax. Should that referendum fail to be approved by the voters, the County's ability to pay for the projects would be significantly damaged.
MCS Superintendent Dr. Bob Grimesey noted that beginning design work may be prudent, because, until actual designs are in hand, actual construction costs are unknown.
"The only disadvantage of putting it off a few months is, actually, if the cost is going to come down, we really won't be able to see how to cut those costs until we actually start doing design work," Grimesey said. "The way to get to lower costs is to get into the design process. We don't anticipate that those costs are going to go up."
The Commissioners agreed to have Davenport revisit its financial modeling, removing the MCS fund balance and the remaining 2009 School Bond funds from the equation.
A future joint meeting to revisit the details of the facilities plan and financing is expected.
"We are committed to try to make this work," Chairman Nick Picerno said. "You may have to sharpen your pencil and you may have to lean on those contractors to make them come in under budget, and you may not get everything, and you may have to start in April instead of January . . . whatever it is. But I think our Boards are committed to making this work."