School borrowing options on hold

Published 10:02 am Wednesday, August 22, 2018

The decision to delay school borrowing options until figuring out how much money is needed and the complete scope of school needs passed at an August meeting of the Charlotte County Board of Supervisors.

Wylliesburg/Red Oak Supervisor Kay Pierantoni originally offered a motion to table the borrowing option until hearing back from the school board about what else is needed.

However, Drakes Branch Supervisor Garland Hamlett, Jr. offered a substitute motion.

“I move that this board delay this until we meet with the School Board and then have a called meeting to make a decision on how much money is needed and what action to move forward …” said Hamlett.

The motion carried.

According to a notice, a special called meeting was held in the school board office Tuesday night to review and approve PPEA construction plans for Bacon District Elementary School and Phenix Elementary School.

“Well, it is unfortunate that we are at this point and I went back to try to understand how we got to this point and it goes back to December 2017 that it was very clear in the Board minutes … in the recording … that there was $400,000 left over from the $6.1 million that was borrowed,” said Wylliesburg/ Red Oak Supervisor Kay Pierantoni.

In May 2017, according to a summary of school financing options, “Davenport (and Company) distributed a competitive bank RFP in order to assess interest rates for viable financing options as it relates to the repairs and renovations to the Eureka Elementary School and various other schools, purchase new school buses and pay the costs of issuance, totaling $6.1 million.”

Pierantoni said additional money did not have to be borrowed for two proposed standalone gym projects slated for Phenix Elementary School and Bacon District Elementary School.

She said Saxe Supervisor Royal Freeman did a good job of previously stressing the fact that the money did not need to be borrowed, it was already available.

“Then the schools came back and said ‘well, we need to do these classrooms too,’ so then it was we need to do classrooms and the gyms and it’s going to cost $3 million,” said Pierantoni.

She said then the figure proceeded to $3.2 million, but the figure is really $3,286,000.

She said the price just keeps going up. “We borrow money and then we can’t track it …,” said Pierantoni. “We can’t keep ignoring these sums of money.”

A summary of school financing options said, “the county is considering a borrowing to fund improvements to its Bacon and Phenix Elementary Schools totaling approximately $3.2 million, plus costs of issuance.”

At a July meeting of the Charlotte County Board of Supervisors, Davenport and Company Representative R.T. Taylor was available to discuss school financing options for renovations in Charlotte County.

During that time, three options were presented for consideration.

According to the summary, option one would require an extended credit through BB&T with a fixed interest rate of 3.72 percent.

No additional assets would be needed, as the existing collateral of Eureka Elementary School could be utilized.

In July 2017, the Board of Supervisors and the School Board approved financing with BB&T for a fixed interest rate of 2.60 percent over a 15 year period.

An issuance costs of an estimated $75,000 would be associated with option one.

Option two would include a competitive bank RFP process, which could take upward of 60-75 days. The summary said the county/school system would also have to identify additional assets available to be pledged as security.

Issuance costs could run about $100,000 for this option.

Option three would allow the county to apply to and issue bonds through the 2018 VPSA fall pool. The application deadline for option three is August 27 and interest rates would not be set until VPSA bond pricing, occurring near Oct. 16.

The timeframe for option three could take approximately 120 days, according to the school financing options summary.

In addition, while options one and two would not require a public hearing, option three would not.

Pierantoni said at some point, money is going to run out. “We took $1.7 million from the reserves this year to balance the budget.”

She said the fact of the matter is that Bacon District Elementary needs a lot more than the indoor activity room currently slated.

Pierantoni said if community schools are going to be supported, then the money will have to be spent.

She questioned why Bacon District is always left out.

Pierantoni suggested the $3.2 million not be borrowed until “we know what Bacon needs and then we borrow what we’ve got to borrow and we raise taxes for what we’ve got to raise taxes, but we make Bacon equal to other schools.”

Phenix Aspen Supervisor Donna Fore said the deadlines for some of the options would be coming soon and if the decision was delayed too long, some of those options would no longer be available.

“Why are we borrowing anything until we get our monies all straight?” asked Pierantoni. “That’s all I have to say.”

“Yes, they’ve neglected the buildings, but they have not neglected Bacon District,” said Red House/Cullen Supervisor Nancy Carwile.

She said the test scores have come up at the school and one grade has a class size of 12 children.

Carwile said it is a matter of neglecting capital in favor of education.

“You’ve got to realize that the citizens of this county do have some say over what we do and what the School Board does and they wanted an elected school board …” she said.

Carwile said both boards always hear sentiments opposed to raising taxes.

She said the reason the school buildings have suffered is because the money has been put in to personnel and not in to buildings.

“Without raising taxes, something has to give,” said Carwile.

She said programs are leaving the schools because the money is being cut coming to the school division from the state because there is less enrollment.

“Everybody wants a neighborhood school, but they don’t want to pay for it,” said Carwile.