By Leslee Kulba- The Buncombe County Commissioners agreed to take out a maximum of $44,161,525 million in debt to fund improvements to Buncombe County Schools. Finance Director Tim Flora explained how that amount was derived.
He said the School Capital Fund Commission compiles a list of capital needs based on data submitted by the schools in the Asheville City and Buncombe County school districts. The needs must be for projects estimated to cost more than $100,000 each. The commission then prioritizes the list for a vote of the county commissioners. The SCFC oversees a fund that has already committed allocations to school projects.
Flora provided some perspective. The combined school systems include over fifty campuses with more than 5 million square feet of buildings for over 28,000 students. Five of the schools date back to the 1920s. Two of the old schools, Asheville High and the Community School, made the short list for urgent repairs.
The commission receives its funding through sales taxes. The state collects seven cents for every dollar spent on most goods and services. Of the amount collected in Buncombe County, half a cent on the dollar is dedicated toward school capital improvements, as overseen by the SCFC. This year, those dedicated revenues are expected to total $18.5 million. With what Flora described as conservative estimates, the fund would rise to over $22 million in the next six years.
The fund currently totals $29.3 million. Of the incoming $18.5 million, all but $400,000 would be spent on previously-approved projects already in process. Then, another $15.3 million would be spent on debt service, leaving $14.3 million at the end of the year.
The projects prioritized by the SCFC for 2017 totaled $60.9 million. At the top of the list were three “critical” needs. $25.3 million for Asheville High School was to be spent over three years, funding roof repairs and collateral damage incurred by the appurtenant deferred maintenance. Additional renovations for the architectural landmark would also be funded.
Montford School, formerly known as the Randolph School, is in need of $1.6 to $5.6 million in repairs, and the Community High School is up for $12 million in refurbishment. The rest would go toward systemwide projects. Only a third of the capital needs listed by the schools would be funded.
At Commissioner Holly Jones’ request, Flora named the top “systemwide” items: $580,000 for Owen High ADA compliance, $160,000 for Avery’s Creek Elementary HVAC, $1 million for Valley Springs Middle roofing, $780,000 for Williams Elementary roofing, $200,000 for Erwin High repaving, $588,000 for Reynolds High roofing, $1 million for Avery’s Creek Elementary cafeteria and canopy, $210,000 for the BCS Administrative Services Building switchgear services, and $725,000 for Owen High track replacement.
Flora said the decision on where to draw the line financing projects, and the amount of debt to take out, were informed by statutory requirements as well as school system representatives, the former county General Services Director Greg Israel, and other financial advisors. The SCFC is working with financial officers to apply for a single debt issuance, at an estimated 3-4 percent interest rate, this spring. Flora said projects could be broken out for special financing if a better rate can be found for them.
The SCFC currently services debt to the tune of $15 million a year. This amount would increase to $25 million for the next five years, zeroing out the school commission’s fund balance. Flora said the trajectory after that would bend upward as more debt is retired.
Flora was comfortable taking on the debt at this time. He said it would leverage the county’s AAA bond rating while taking advantage of overall low market rates. It would further be preferable to contain costs by deferring maintenance no longer.
Commissioner Brownie Newman, who serves on the SCFC, echoed this and said he thought it was the most economic way to invest public money for public benefit. Newman said population growth had been integrated into the need assessments, and it is good the county is rehabilitating old buildings.
Ellen Frost, the other county commissioner on the board, said everybody agreed children were the number-one priority in weighting the projects. When Commissioner Mike Fryar asked if any of the projects could be “put on the back burner,” she said narrowing the list had been an “agonizing” project. Everything making the cut was a “critical, critical need.”
Chair David Gantt provided some history. He said in the mid-1980s, Buncombe County had been listed in the Dilapidated Dozen by the National Association of Educators. It was ninth from the bottom nationwide. The North Carolina General Assembly responded by creating a dedicated tax, but the formula prescribed distribution to schools on the basis of average daily membership (ADM).
Consequently, the city “could never fix things up;” and the county had to step up and provide $5 million in capital funding for Isaac Dickson and Asheville Middle School. Senate Bill 888, passed during the last legislative session, now allows the SCFC to allocate funding based on need instead of ADM.
In Other Matters –
The commission approved the standards to be used in the upcoming appraisal. Commissioner Tim Moffitt commented, “Like most county residents when we hear that revaluation is right around the corner, we face it with a lot of apprehension. I just wanted to say that after working with [Tax Director Gary] Roberts and [county assessor Keith] Miller and going through the schedule of values and understanding the excellent process you guys have put together to help us understand better what the value of our property is and how that relates to our overall responsibilities as taxpayers, my confidence is very high in the process.
“So, I no longer really dread the revaluation because it’s clear in my mind that you’re not the bad guys. We are. We’re the ones who ultimately set the tax rate, which is how we fund a lot of the services or most of the services that we provide as a county. So, I commend you for an excellent job. I commend Gary for an excellent job for nearly thirty years or so running the tax assessor’s office. You do a great job. I hear nothing but great things about how you approach very difficult situations. And the way I choose to look at this now is, I get a free appraisal every four or eight years.”