Commissioners halt high school plans

Published 8:46 am Tuesday, August 17, 2010

JACKSON — Plans for a new centrally located high school in Northampton County have been put on hold.

On Monday, the Northampton County Board of Commissioners decided to stop all actions pertaining to placing a $24 million new high school general obligation bond referendum on the November ballot and further table the decision until the future.

The commissioners voted unanimously (4-0) for the measure with Commissioner Virginia Spruill absent from the meeting.

The board’s decision came after County Manager Wayne Jenkins presented the commissioners with two different bond orders and resolutions relating to the new high school.

Jenkins began by answering a few questions the commissioners had asked from their last meeting.

Jenkins said after talking to County Attorney Charles Vaughan and the county’s Bond Counsel he found that after a public hearing for placing the referendum on the November ballot was held the process would have to continue.

“At that point in time, after you adopt the bond order and order resolution, actions cannot be stopped at that point in time,” he said.

Jenkins said at the commissioners last meeting the board asked him to produce an option that would address the need for a new high school.

Jenkins referred to the information before the commissioners, a bond order in line with their April decision which was to proceed with placing the referendum on the ballot.

Additionally, he presented the commissioners with a bond order with a different option as requested by Commission Vice Chair James Hester in their previous meeting. That option re-phrased the wording to have the board pursue the issuance of general obligation bonds with a maximum amount of $24 million to finance, in part, the construction of high school facilities.

“So what you have here, if approved by the board and then if approved by the voters in November, will allow the board of commissioners to do either; build a new high school at a new site or spend up to $24 million in repairing and renovating the existing high school facilities,” he said.

Hester asked what kind of interest rate the county was looking at with the bond.

“Sir, we don’t know at what point in time in the future we would actually be selling the bonds,” Jenkins responded. “A representative from USDA did some calculations last week and on August 5 the USDA interest was at four percent.”

“And I understand they will be public bonds,” said Hester.

“Yes sir, there are two ways to raise the money, one is to sell general obligation bonds on the public market and they carry a term up to and not to exceed 20 years,” Jenkins said. “Then of course, the preferred method is to work this through USDA Rural Development’s communities, facilities loan and grant program, where USDA buys the bonds and that gives us a 40 year term.”

Hester asked on a 20 year term what would be the annual debt payment for the county.

Jenkins said the payment would be estimated between a $2.1 million and $2.2 million and with USDA with a 40 year term is estimated at $1.2 million.

“And where would we get the money,” questioned Hester.

Jenkins said going back to conversations with school officials the school board had put forth a private-public partnership proposal and that carried a $1 million annual repayment schedule.

He continued by saying, the repayment, as proposed by school officials, of the $1 million would come from several different sources including: $300-$350,000 of current expense savings from closing Northampton County High School-East, North Carolina Lottery proceeds of $150,000, ADM (average daily membership) funds, local annual capital outlay appropriations and any excess of sales tax.

Jenkins noted a caveat with those sources was that an additional $125,000 in capital from the county was being requested to help make the $1 million.

Hester said capital outlay is used for repairs to schools and while there wouldn’t be a need for repairs at the two high schools what would happen to the other schools.

Jenkins said he along with Assistant Superintendent Phil Matthews, who was in attendance, had several conversations recently regarding the matter.

“He realizes that it would be unrealistic and unpractical to move forward and remove that $445,000 annual appropriation,” said Jenkins. “We still have six or seven other schools we have to maintain.”

Jenkins said if the board of commissioners was to move forward with the referendum that additional thought would go into utilizing the capital outlay funds for the repayment.

“Looking at the source of the funds that the Board of Education looked at for assisting in the repayment of (the $1 million), I would like you address this board on what is happening with the Lottery proceeds and with the ADM funds,” said Commissioner Robert Carter, directing his question to Matthews.

“Now, I’m talking cold here, so don’t quote me on these numbers,” said Matthews. “Our expected Lottery proceeds is $350,000 for this coming school year, but that has been reduced to about $220,000 this year because legislators are taking some of the Lottery proceeds and directing it toward employing teacher staff.”

Matthews continued saying that legislators were expected to place ADM funds “back in action” this coming year and the school system did not receive ADM funds this year. He said he was not sure of the amount of ADM funds the schools receive and estimated the figure to be around $200,000-$300,000.

Carter questioned the sales tax and asked Finance Officer Dot Vick to comment.

“They will have no sales tax to go toward this debt payment,” said Vick.

She continued that because the old debt payment that the school system has now was set up with the principal payment lower until the older debt was paid off.

Vick said in the coming year the principal payment goes from $135,000 to around $400,000.

“I’m estimating they will receive between $700,000 and $800,000 next year in sales tax,” she said. “Their debt payment is eight hundred and something thousand on the last school that was built.”

Commission Chair Fannie Greene asked how many years they had on the school they are paying off.

“Ten or eleven years; we’re financed up to 20 years,” responded Vick.

Hester addressed his fellow commissioners.

“Over the past few weeks I have given this subject a lot of thought and find this proposed action very troubling,” he said. “Before I offer a motion, I would like to preface my motion with this comment.

“Please know that I am in no way opposed to the Board of Education’s concept to operate one high school in the county. I fully support the youth of our county, public education and the facilities needed for education. With the financial uncertainty looming over our state government where projected deficits are over $3 billion going into fiscal year 2012 and, due to the current economic uncertainty of our county, state and country, and to preserve the fiscal stability and health of Northampton County and its future, I make the following motion:

“That the Northampton County Board of Commissioners stop all actions pertaining to placing a $24 million new high school referendum on the November ballot and further table the decision until a future date to be determined by this board of commissioners.”

Carter offered a seconded to Hester’s motion. The motion passed without objection.