02/26/06 — Smith: Plan will include priorities and dollars

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Smith: Plan will include priorities and dollars

By Andrew Bell
Published in News on February 26, 2006 2:10 AM

EDITOR'SNOTE: This is the third in a four-part series examining the debate over funding for Wayne County school facilities improvement. Asked to respond to questions, in addition to Wayne County Schools Superintendent Dr. Steven Taylor, school board Chairman John Grantham and County Manager Lee Smith, Wayne County Commission Chairman Atlas Price has also been interviewed. His responses will appear Monday.

1. The school facilities issue has been on the table for years with no resolution. What kind of message do you think that sends to the students and residents?

"That we are responsible. Because, ultimately, government, and that includes the school board, has a responsibility to the taxpayers and the citizens to provide what they demand. Granted, we, the county, schools and cities, have to provide certain things because it is required by law.

I know the school board has presented information, and we've gotten probably the most detailed information we've ever had in the fall of 2005. Up until then we had not had detailed information. We hired Evergreen Solutions to come in. Bottom line is, the Board of Commissioners want to make sure that if you are spending $1 million or $100 million, you are investing the money the right way. And that's a key word -- investment.

Wayne County's population, student and general population, has not changed much. There's been a shift in population ... so we have to adapt to that. I don't have an answer for that. What we will do is we have Evergreen Solutions looking at that and the facilities plan and the facilities and looking at growth trends. And, as a third party, they will take an objective, unbiased look at what they think our demands are ... then we have to put it on (the public) ... We have to go out and tell the people what the costs are. The schools have a need for additional dollars, and they have increased costs and the Board of Commissioners understands that, but we wanted to make sure that we know what those increases are. Well, then you have to find a balance with the taxpayer. You have to have good facilities and you have to fund teachers and classrooms and all those things. What's that balance -- what are people willing to tolerate? Once you get that vote of confidence from the people and find out what they are willing to do, then the Board of Commissioners will get a general obligation bond or through other means of conventional financing. I think all of us would rather, if this was four years ago, have gone through this process quicker, but I'd also rather not make a $100 million mistake because you pay for that for 25 years."

2. What kind of investments has the county made toward facilities?

"They get capital money every year."

How much?

"Between $2 and $3 million (per year) ... Plus, they get from sales tax additional monies. In fact, in some counties, the sales tax money is not necessarily mandated to go to schools. The commissioners have basically allowed all of that to go to schools ... If you look over the last six to eight years, the commissioners have spent out of the county's fund balance, and that's part of what got the county in trouble because we used cash that we really didn't have to use. We gave it to them for several projects. The said they needed things, and the county commissioners tried to help and the county got into a position where they couldn't give just cash. It became an issue where we would have to finance and the board started asking for a good, solid facilities plan ... The plans we had got were one or two pages and they said this school, $1.7 million; a cafeteria, $2.7 million. That wasn't enough, and the board kept saying we need more detail.

There is this issue that the two boards don't get along. But if you got both boards to sit down, we want the very same things, and we are not that far off. But the commissioners, the one thing they kept saying was what is the money for? Are we going to build one, and it not be large enough and all of a sudden this 10-year construction plan that is paid for over 22 or 25 years, you are back in seven years saying, 'Oh, by the way, we have to expand it.' Now, granted you will never get it perfect and a plan is going to change. You need to look at it every single year and look at your trends.

I'll tell you my personal feelings, I've heard that the school board for four years has asked for money, and they have, but the county commissioners have also asked for the justification. The schools are much more likely to have success with a bond referendum or a vote of confidence from the people if we jointly are able to go out and convince folks why we need to do these things. Sure, we would like this (school facilities process) to go quicker, but does it bother me? Not really, because the Board of Commissioners has asked for this, and I believe what they have asked for is reasonable and that's why both boards have agreed to bring in a third party. We asked two years ago for this to be done. It was not agreed upon by the school board. They did not agree to it. That's not being critical. The county commissioners have said for years 'Why not bring in a third party?' ... So, get somebody to look at the whole picture, and that's what Evergreen is doing. I wish we would've had this study two years ago when we asked for this study two years ago."

3. Since this involves Wayne County students, would it be a benefit to have some kind of a biased opinion?

"You've got to remember, growth trends are growth trends. If your population is such that you say in this region of the county our population is growing and K though 5 is increasing by this percent every year -- it is what it is. You need to have performance standards. We need to get kids out of school with higher proficiency in learning and drop the dropout rate. The schools have a job -- to teach. I will tell you, the school board has a tough job. They have standards that conflict, and that's understandable because we have standards that conflict, but we're saying prioritize your programs and figure out what you want. I can understand where the schools get on the defensive but the thing is, is that the county commissioners are saying the same things. They're not their adversaries. Once the commissioners find out what that middle ground is they can go out and sell that to the public. So, the public's gonna have to vote. I would hope, by the earliest, November 2006."

4. If you have gone out and seen the conditions the schools are in and know the problems, why wasn't the bond issue brought up last year?

"It was. It has been brought up every year. We have said if they give us more information, the county commissioners have always been prepared to go out and do it, but you have to give a detailed plan. You have to give justification. There has to be better communication between the county commissioners and the school board. Granted, I will never know as much as Steve Taylor about schools, but they need to be willing to go out and get us information so we can actually sell why we're going out and doing what we're doing for schools. If I look at the county budget over the last four years, just to survive and get our fund balance in order, we were using $5 to $7 million a year out of our fund balance. You can't live off your savings. The schools have spent out of their fund balance, and we have to examine how to fix that. In our case, we had to give more money to schools and Medicaid was going up $1 million a year. So, what little amount of money we were getting in increases from property taxes got ate up just on school operations and Medicaid."

5. If you want the same things and say the same things, then why not have more joint meetings to find more middle ground?

"We have. The middle ground is having this study done. We were basically at a stalemate. In order to avoid more conflict, we decided to look further and bring in that third party. When (the results) comes back, we are going to meet and look over the results and then there is going to have to be, at that point, a resolution. I can't tell you what that's going to be because you have two elected boards, but the two boards, when they get that information, are going to have to agree or find some middle ground because they are not going to agree on everything."

6. What is the best way to iron out the disagreements when you do get the study back?

"From our standpoint, the commissioners will get good facts. If you've got good data, just look at the data and you have your middle ground. The public needs to demand from the county, schools, city or any government a certain level of performance based on what their demands are. If boards don't do their jobs, the public will make a change. The school board and county commissioners are 14 people out of 115,000. There needs to be hearings and public sessions ... You can't go in and say we're going to build jails and schools and the price tag's $100 million and we are going to do a bond and it is going to cost you $2 million a year to pay for it for the next 30 years. I've got to tell them that $2 million is going to cost them 4.5 cents on the tax rate, and then they have to decide if they are willing to pay for it."

7. When you got the detailed plan in November, would it have been possible to set up a bond referendum for May 2006?

"There was no way because if we would have started on Dec. 1, you would have had four months and come back March 1 and the bond referendum would have already had to be prepared and you wouldn't have had time. November would have been the earliest anyway. If you could find out in advance what the tolerance is, that would be great. If you put a bond referendum out that is unaffordable in the public's mind, then you are wasting your time. The commissioners have said that an education council should have been formed years ago back in 1997 or 1998 where you would have a council that would work on these things on an annual basis. The schools should have done that, and they didn't do it and I think now you are making up for lost time. I don't know if we have the temperature of the public and know what they want. Although there was some planning going on, I don't think it was as comprehensive as it should have been."

8. Were there any things the commissioners could have done in the past few years to be more proactive with the school situation?

"We had an education committee and the first two years they were meeting pretty regularly, but there was no resolve in those committee meetings. Everybody agreed to the larger picture that we had needs, but they couldn't get together on what each one had to say. They had to find someone to come to the middle and find out what the real issues are. Could we have done things better? Sure, you could always do things better. I wish communications had been better between the county commissioners and the school board. How could it have been done? I don't know, but I'm not real upset at where we are because I think where we are is appropriate. The county, financially, in the last 36 months was not in the position to finance. We were not prepared. My job when I started four years ago was to bring this county to a place financially where we could begin to look at financing long-term projects and everyone was involved with that -- the schools, they didn't get everything they wanted. In fact, they have gotten increases every year for the last 10 years. The schools have never been cut. They have always had increases or at least stayed the same. The commissioners had to figure out how do they balance the schools' demands with all of the other demands and that is not an easy job. The schools have asked 'How much will you give us? Then we can tell you what we can do.' The commissioners keep saying they want to do what's affordable. What's affordable to you and I might not be affordable to the taxpayer. What's affordable to him is not another tax increase."

9. With the tax increase, has the money from that gone back into the fund balance or is it going to go to the schools?

"When you look at the increase last year, there were very specific things we had to pay for -- Medicaid. We had some revenue, but it was something like 2 percent. When you look at 2 percent growth -- it was actually about $1.8 million in revenue growth from property tax and sales tax -- and Medicaid took $1 million of that. So, you are left with $800,000, and just like the school board, we had an increase in gasoline costs. I have a $100,000 increase for fuel that is required. We knew we needed to put money away for Economic Development for economic incentives ... and the benefits have shown -- look at Andrew Corp. That wouldn't have happened if we hadn't put some money aside, which creates jobs, builds houses, builds businesses and brings more money into the circle. It also brings more kids, which makes it kind of a vicious circle. Wayne County would tell you it's growing so much it wishes it could stop. We had increased cost issues with schools. Even though we negotiated with the schools and they got $350,000 to $400,000 -- plus the $400,000 left in reserves -- that was a 1.5 cents or 1.75 cents (tax) increase to do that. To put some money aside to build our fund balance to prepare for borrowing money. Could we have just handed that over to the schools? Sure, we could have done that. But, in the long-term, was that responsible? If we are not building our fund balance to prepare to borrow money, then I'm going to keep telling the school board no because the local government commission will tell me no. The bond rating companies will tell me no, because it is irresponsible. And that little amount (from the tax increase), what does that equal? Because we are also retiring debt. And everybody says, 'Oh, you've retired that debt, so you must have a lot of money.' It's probably $1.5 million a year. That doesn't buy a lot, but can I use that $1.5 million to leverage by building my fund balance and use part of that money toward debt service when I have expected growth and revenue and know what my operational costs are with the schools and use that as leverage for a 20-year financing plan to build a school that they and the students need? Yep. And that's what we've been trying to do, but it's taken this amount of time to get where we are."

10. Speaking of the public, you had mentioned the affordability factor. What is the best way to gauge that?

"The county's responsibility will be to show them how much (the costs) equals, and then people will determine what they will tolerate. I don't know what it's going to be, but there will be some town hall meetings. I think we are going to have some uncomfortable meetings. My board and I hope the school board would all be willing to take the heat - to go out there and talk about. Therein lies the reason why we need justification of why we have to add on to this school. They have to be able to answer those questions because I don't know how to answer them. I don't even know how to help. So, give us good justification. We have a good start with the schools, and I think Evergreen Solutions is icing on the cake. And that is the data we are looking for."

11. Who would be the ones to hold the town hall meetings with the public?

"I've got my personal feelings on that. I think it should probably be a combined effort with the school board and the commissioners because I think they both need to hear what the questions are. I can't say for the school board, but the commissioners are willing to do that.

12. What is an unbiased opinion if you are having to decide to build a roof or not?

"We all went out and saw the schools and saw things that needed to be improved. These were not death-defying issues. Nobody was unsafe. That is something that should be addressed every year in the budget by the school board if something is not safe. They were not big-ticket items. The other thing is, we do all have biases. We've got biases to what we want in the schools and what we want in the county. If you bring someone in that just looks at the data, that is the information you need to base a decision on. Granted, when (the public) comes into the decision-making process, will biases come out? Possibly. But the public will have good data to help make the decision. One thing my board has been concerned about is what the lottery is going to bring. The state school bond -- is that going to happen in the next two years? No matter what you do, you are not going to let bonds go in one fell swoop. It will be over a three- to five-year period as far as so much money at a time, because you can only borrow so much at a time. As far as the process on bonds, the Board of Commissioners has tough decisions in the next 24 months, so does the school board. They've got tough decisions. That's what they're there for. All Steve Taylor and myself can do is bring the boards good information. Is $120,000 worth going down and finding out what is at the bottom of the good data? Absolutely. That's a lot of money to you and me and to the individual taxpayer that is a lot of money. That is more than some people ever hope to make. But was it worth it as a whole? Absolutely, with no doubt in my mind."

13. What would be the point in continuously asking the school board to make these plans if you wanted to go to a consultant anyway?

"They never agreed on one. They didn't think it was necessary. You've got ever-changing boards. The board in the past 24 months has zeroed in on schools as a big issue. That's when they asked if we needed a consultant. I don't think the school board knew the answer exactly because they would say we have needs -- how much will you give us and we'll tell you what we can build. That told me they didn't know what the operational costs were either. Now, we've got the best one we've ever seen and applaud them for the job they did. Internally, they did the best they could do with the information they had. Do I wish we would have had Evergreen two years ago? Absolutely. But I also think if Evergreen had been here at that time, they would have ... (said) you don't have the ability to pay borrow yet and the frustration level would be even higher."

14. If the regular taxpayers came in this office and said they don't believe the county commissioners think schools are a top priority, what would you say to them?

"I would tell them that the success of Wayne County depends on the schools. Industry is going to come here because of the quality of the student that comes out of Wayne Community with a two-year degree. Even if they have a four-year degree, I would tell a taxpayer the most important thing we do is educate children. Without a doubt."

If that same citizen asked you what you have down to prove that, what would you say? The consultants?

"I think so, because right now everyone is just speculating. I have to have some data to make a decision. The schools gave us a presentation last year. I think we need to have more of that -- probably twice a year. We should know what they are thinking and what their expectations are."

15. What information could you provide to the school board that could help them out?

"The county commissioners have to prioritize schools, jails, animal control, senior services, sheriff's office. You have to prioritize all of that. If you say education is first, then these are the things you are going to do. The county commissioners have a problem with the fact that 87 percent of our budget is mandated. You can't change that. That 13 percent is something to work with, but some of that is already obligated. I have included within that 87 percent the $17 million we contribute to schools, which I think is a mandated cost. You can't lower that -- it is a mandate. That's why you have to look at that 13 percent as an investment opportunity. You have to invest. We might have some differences on that, but we have to come to a general consensus as a county."