03/06/09 — County not sure funding available

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County not sure funding available

By Steve Herring
Published in News on March 6, 2009 1:46 PM

Wayne County does not yet have the anticipated $5 million in lottery funds in hand that are needed to kick start a $23 million school facilities plan.

County Manager Lee Smith and school officials appear optimistic that the county will get the funds, but Smith said it is still too early to say whether the school system will be able to meet a March 22 deadline to let bids on Part B of Phase I -- Norwayne and Eastern Wayne middle schools.

Gov. Beverly Perdue last week said she would take $50 million in lottery funds earmarked for schools. The money will be placed in a special fund for possible use to help plug a $2 billion state budget hole.

The school board, at the urging of commissioners, had already started the process of obligating the monies.

Meanwhile, Smith said he is exploring the availability of U.S. Department of Agriculture grant funding, similar to what has been utilized by Sampson County.

Smith and his financial staff met Tuesday with Superintendent Dr. Steve Taylor and his financial staff to hash out concerns about funding and the project's timing raised earlier that afternoon by commissioners.

The $5 million in lottery funds was the main topic of conversation of the staff meeting, Smith said.

Questions remain and the two groups will meet again sometime within the next two weeks.

"We each kind of have some objectives to meet as far we still are doing analysis of what the state is going to do on the lottery," Smith said. "That is still not completely settled."

Smith said it "looks like" the county will receive the money.

"We just don't know what the time frame is," he said. "We are having to look at that. Since we have Part A of Phase I out for bid, obviously the approval of those bids is contingent upon the assurance from the state that they (Wayne schools) have the $5 million. If not, then from what I heard from the board (of commissioners), those projects could not be approved. Remember, as far as the budget you would not have any monies that have been appropriated because you have to do a budget amendment. There-fore you could not legally approve them (school projects) because you do not have any money appropriated for those projects. You have to do those in advance of approval."

The state also is reviewing the project plans, Smith said.

"We are also doing a deeper analysis on the sales tax so we are considering time frames -- are the projects timed correctly for the budget," he said. "So, we are asking these questions and we are going to get back together and come back and look at it again."

During the Tuesday joint meeting between the two boards, school officials floated the idea of using revenues from the one-half cent sales taxes for debt service.

Currently, those revenues are being used to pay down the existing debt service of just over $2.2 million. About two years remain on those payments.

Whether that could work or not is "a matter of timing," Smith said.

"We don't know yet and we are looking at all of those issues including the economy and applying it to a schedule over the next two years and looking at when the monies come in," he said. "You also look at when you borrow the money and get the Local Government Commission's approval and you get approval to move forward and you accept bids and get your money from the bank. When you get your money from the bank, the payments begin anywhere from within three to six months of receipt of that money and not just interest payments. Some-times you can have interest and principal. You got to examine that and look at all of those time frames."

Smith said he has met with USDA officials and plans to bring them in to meet with the school and county officials "as soon as we can."

"Right now there is some grant money available," he said. "If we could get some percentage of grant, that could help reduce even more of our debt we would borrow against. But it will have to be done pretty quickly.

"We don't have answers to any of those things because everything is on the table."

As for the March 22 deadline, "I don't know," he said. "I can't answer that right now. Based on us getting together next week or the week after I can probably answer that a little better. Right now I can't. I don't know."