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HILLSVILLE — Citizens who opposed the idea to renovate the high and intermediate schools believed that construction costs would increase taxes, Carroll Supervisor Andy Jackson said at Monday's county board meeting.
But county officials believe that their financial planning — combined with several other favorable factors — means that the county will be able to afford the facilities program without a tax increase.
After a lot of what the supervisors called “sleepless nights” worrying over the decision, they unanimously supported seeking the $26.7 million in financing from Rural Development to proceed with the Phase III construction plan.
The 18 citizens who spoke during the public hearing Monday on the facilities improvement plan far and away supported tackling the improvements that would add the ninth grade to the high school and the sixth grade to the intermediate school.
(For more on their comments, see the related story on page 2.)
Educators wanted to take advantage of competitive bid prices that resulted after construction work fell off as a part of the recession, plus increased opportunities for funding through the federal stimulus program.
The supervisors will partner with the Carroll County School Board and the Industrial Development Authority to apply for the loans made available through Rural Development and through the Build America Bonds.
Though Supervisor Tom Littrell has been inclined to believe that buildings do not educate students, he can see the value in having modern school facilities and technologies that will prepare the students for a new world.
With that, he made the motion to allow the schools and the IDA move forward with Phase III renovation with a cost not to exceed $26.7 million. This is contingent on getting financing and the bonds from the federal government.
"When the day is done and the dust settles… our children will be the ones that pay for this project should it be passed" Supervisor Manus McMillian said, providing the second. "And should it not pass, the children will be the ones who suffer from the lack thereof."
Making the decision was a struggle, several supervisors said in comments leading up to the vote.
"'No new taxes' has been a word that I have heard from the constituents in my district repeatedly," Supervisor David Hutchins said.
Supervisors have to think about the impact all the citizens, including those people Hutchins did not believe were represented at the public hearing — those below median income. But the county officials also have to think about what's right for kids in the future.
"The thing that makes it palatable is we are saving several million dollars in interest," he said.
Carroll officials plan to pay off existing debt, so the county's debt service would not increase drastically with the renovation project, Hutchins noted.
"The main thing is we can do this without a tax increase," Supervisor Sam Dickson said. "I definitely would not vote for a tax increase…"
Carroll County is a progressive place. "If we say no to schools and no to things that make us a better county, I don't think we're doing what we're elected for," Dickson said.
The easiest thing Dickson could have done that day was stay in bed and claim he was sick, he joked.
Supervisor Andy Jackson asked County Administrator Gary Larrowe for a guarantee that taxes would not go up as a result of the renovations.
"Mr. Jackson, there's no way to guarantee anything," Larrowe said. "However, our planning has been that there would be no increase that would be necessary to cover the project."
"Ninety percent of my calls have been people telling me to vote no on this because they're convinced there's going to be a tax increase," Jackson said.
Coming from a family with three generations of educators, Jackson described himself as pro-education.
"Our youth is the greatest resource we have, and we've got to give them the best opportunities," he said.
Buildings don't educate the children, but he acknowledged that students today need more than the potbellied stove in the one-room school house.
The supervisors unanimously approved an 11-page resolution and support agreement spelling out the county's and the IDA's responsibilities regarding the loan.
After the supervisors received a round of applause from the audience, County Attorney Jim Cornwell immediately asked for the approval of a resolution from the bond counsel.
Hutchins made a motion to approve the resolution, and it also passed unanimously.
After more than two years of putting the emphasis on infrastructure projects, negotiating a settlement with Hillsville after years of disagreements, supporting small business growth, supporting regional growth efforts with Galax and Grayson County, Hurst said the time has come to invest in the county's "human capital."
The time is right, with low interest rates and the best bidding environment for construction, he said. These funds from the federal government aren't expected to be available for long.
"With the Phase III project… we are working to 'break the chain' of higher unemployment and are taking advantage of the other investments we have made in the community," Hurst said in prepared remarks. "There should be no question that investing in our people will be one of the last elements that will create prosperity for our community."
The supervisors have taken care to build financial reserves and pay debt down without increasing taxes, Hurst noted. That has prepared the county to help with Phase III by having funds available to pay down existing debt.
Hurst asked the supervisors to approve a motion to dedicate $1.5 million of the county's fund balance to debt payments for the five "bridge years" that will require additional monies. That will leave county officials another $800,000 in debt payments over five years to plan for.
The supervisors approved a motion by Jackson to pay down the debt service by using the fund balance.
Noting that requests for improvements to the band room came up three times during the public hearing, Dickson asked the architects and planners to keep that in mind.
He also hoped that the schools would do everything possible to promote using local workers and buying local to keep the money in the community.
Recalling that many speakers at the public hearing said that Woodlawn school's time has passed, Dickson felt that the school could be put to other uses — possibly as a recreation and community center.
The schools decision may strengthen the community by leading to more economic development and more jobs for the students to take advantage of, Hutchins said. "It's just sad that the thing we export is our children."
The resolution that the board approved contained a lot of technical language about seeking the federal loan and the Build America Bonds.
The IDA will issue Virginia Moral Obligation Revenue Bonds in the amount needed to cover the project costs.
Carroll County will also work to qualify for the benefits of Build America Bonds, which would rebate 35 percent of the interest paid on the loan.
The authority will lease the schools property in order to use the bonds and lease the facilities back to the school system. As a part of the bond issuance, the authority will provide a "leasehold deed of trust" to Rural Development.
The documents detail that a financing lease will be made between the authority and the school board, "to pay rental payments being sufficient to pay the installments of principal of and interest on the bond," the resolution states.
The school board agrees to complete the renovation project and pay rental to the federal government on behalf of the IDA, the support agreement notes.
"The board [of supervisors] acknowledges and agrees that the school board has agreed to cause the project and the project land to be operated and maintained in a manner to provide essential public school facilities for the benefit of the county and the general public and for its welfare and propensity," the support agreement states.
The agreement remains in effect until the bonds have been paid in full, the document says.
Rural Development's Southwest Virginia representative, Travis Jackson, has been helping county officials prepare to apply for the loan and the bonds.
The federal loan is for a 40-year term with an interest rate of 4.125 percent.
County officials will be able to defer payments for up to three years, to give them some "breathing room" at the beginning of the loan term.
Educators and planners have broken up elements of the construction projects to add the space needed to make room for the new grade level at each school, like building the "Ninth Grade Academy" onto the east side of the high school.
Needed renovations, like upgrading the 40-year-old heating and air conditioning system at the high school, new entry and lobby for security reasons, media center and more, will also be parts of the base bid.
Other work such as building an athletic field house addition, upgrading parking lots, building a new auto mechanics and horticulture building, are included as add-alternates, to be pursued if the base bids come in low enough.