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Smith: Carroll can save on school construction

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By Christopher Brooke, Reporter

HILLSVILLE — The big challenge for Carroll County Public Schools — beyond swine flu virus and Virginia’s budget crisis — is finishing the school construction program, Superintendent Greg Smith said in a “state of the schools” address Sept. 14.

Carroll schools officials have many causes for concern these days: reports of more than 20 cases of flu — albeit mild ones — in the community and schools since the summer months, although Smith said the number has decreased in the past week or so ; a state budget shortfall of $1.3 billion that raises the possibility of financial cuts; and continuing need for students to perform well in the classroom.

Ranking right up there with those issues, though, is the fact that the facility improvement program in Carroll still isn’t completed. Smith told the Carroll supervisors that finishing that effort remains one of the division’s most urgent needs.

While seven schools have been extensively renovated or replaced, there’s still the question of what to do for grades 6-12.

The school board narrowed options for improving the remaining schools to two plans:

• spending $62.7 million to build a new high school and renovate the existing high and intermediate schools for grades 8-9 and grades 6-7, respectively.

• or spending $35.1 million to renovate the high school for grades 9-12, and the intermediate school for grades 6-8.

Educators have consulted with financial experts in recent months and found unusually high competition for work among contractors in the construction markets, historically low interest rates and funding assistance from the federal government through the economic recovery act.

School system officials believe those factors can save Carroll taxpayers millions of dollars by going ahead with facility improvements planning now, Smith said.

Savings could come in at 30 percent if the school system moves ahead now, he said. He described it as an unprecedented window of opportunity.

“The savings this county could see if we were to move on this project is amazing,” Smith said.

The more expensive plan featuring a new high school facility could save $24.7 million if bids come in as low as expected. That savings would not include any cost reductions through the stimulus funding, Smith said. The cost for the all-renovation plan could be reduced by $14.1 million.

The new construction plan could go down to $47 million, Smith said. “This is a one-time only deal, believe me.”

Perhaps more astonishing, the superintendent said, is comparing the $47 million to a construction plan not long ago that would have cost more than $90 million.

Total debt service for new construction, including interest, would come in at about $79 million, he said. Resulting annual debt payments would hover around $4 million, starting in 2010.

Smith said educators have evaluated other options for debt service, such as delaying the principle for the first two years and getting those two annual debt payments down to the $2 million to $2.5 million range.

Or the school system could defer all payments for 2010 and 2011, and start paying $2.4 million on debt in 2012, according to documents provided by Smith.

“Now why would I bring this to the board, because I know you have a lot of projects and we support those projects,” Smith said, referring to the supervisors’ intensive efforts to expand public water and sewer systems.

Options that delay school debt service would give Carroll time to bring public utilities online and get established, Smith indicated. Multiple payments could be avoided all at once.

Opportunities through the Build America Bonds and other federal efforts could create even more savings, totaling more than $30 million for new construction and $18.8 million for renovation, Smith told the supervisors.

Carroll County doesn’t have the choice to do nothing, he said. “But look at the saving we could apply to the citizens of Carroll County if we move within a short period of time.”

Debt service for Carroll schools has fallen to $28.2 million, which Smith said would be paid off by 2022-2023 through regular payments.

Debt is coming down at a good rate, with $3.3 million to be retired this year, Smith said. Payments are gaining on the debt. By 2012-2013. the school system will see a gain of $631,467, with the base payment of $3.3 million on the debt.

“You can see we are beginning to gain on this debt quite considerably,” Smith said as he referred to a chart he provided the supervisors

By the end of 2015, the school system will be on the plus side by nearly $1.5 million, and Smith said that’s an amazing prospect.

“Now why do I bring that up? It starts to pay for this project, that’s why.

“If we continue to maintain this current debt service, we can take on portions of the new phase three debt without adding a sizable tax burden to the taxpayers of this county.”

Financial experts have warned Carroll school officials that the opportunities to save will begin to fade as the economy turns around.

“Once again, this window is not going to remain open long,” Smith said. “This soft construction market is not going to last.”

The next step is to finalize a financial plan and apply for the state literary loan program, he said. School projects have to get on that list and get in line for state funding for construction.

Being on the list doesn’t obligate Carroll County to undertake construction, but it puts the school system in position to receive funding when it becomes available, Smith explained.

Carroll supervisors would need to consider a motion to allow the school finance team to complete a financing package to comply with requirements for school construction bonds, if they wanted to proceed. Smith said it is the only way the county and school system could begin to move forward.

“We are in the position in which we can literally... save this county millions of dollars on projects which we all know is going to have to be completed soon.”

Educators have said that Carroll County High School has been around for 40 years without any updates, and they worry that failure of the aging mechanical systems could end up closing that school.

Supervisors’ Chairman David Hutchins asked for the county’s finance committee to consider Smith’s requests and delay further discussion until a later meeting.

Other details Smith brought out during his state of the schools presentation include:

• Carroll had 278 graduates in 2009. Of those, 125 earned standard diplomas, 125 received advanced diplomas, six received special diplomas, 12 received modified standard diploma and 10 received a GED certificate.

• 436 students received 3,132 dual-enrollment college credits.

• 12 students earned 264 dual-enrollment credits through the Southwest Virginia Governor’s School.

• dual-enrollment credits allowed Carroll County families to save $275,585 in tuition costs.

• 478 participated in adult learning programs and 71 people earned GEDs.

• all schools were fully accredited through Virginia Standards of Learning testing.

• new instructional efforts this year include the responsive instruction model, the schools farm at the Hillsville Elementary, more preschool programs, and greater efforts to get truants back in school.