10/24/13 — Board eyes lease option

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Board eyes lease option

By Phyllis Moore
Published in News on October 24, 2013 1:46 PM

The Wayne County Board of Education announced during a special called meeting Wednesday afternoon that it plans to move forward with its planned construction and renovation projects -- without asking for an increased revenue stream from county commissioners.

At the meeting Wednesday, the school board named two architects for its upcoming projects, as well as its desire to pursue a new funding option -- lease purchase -- to pay for the construction of two new schools.

The school board's capital plan was the focus of two meetings between it and the Wayne County Board of Commissioners this year. At the first on July 30, commissioners brought their own version of a school facilities plan and had an architect on hand to discuss a proposed new Grantham School.

At its August meeting, the school board announced plans to hire its own architect and to proceed with the original facilities plan.

The key, though, has been figuring out how to fund it.

One of the options mentioned at the first joint meeting was general obligation bonds, school board Chairman John Grantham said. At a follow-up meeting on Oct. 8, other options were rolled out, most of which would have required several tax increases in the coming years.

"We didn't feel like we had enough time to do a bond," Grantham said. "Personally, I don't think the board felt like a bond would pass at this time."

However, there are other options, board members said, that would not require any future county obligations.

For the $12 million in planned renovation projects, which break down to $1.9 million for the central attendance area and $3.9 million and $6.6 million for classroom additions at Spring Creek Elementary and Charles B. Aycock High, respectively, the school board proposed tapping into the fund balance of its lottery and sales tax funds.

"A suggestion of how we can go ahead and get started on that is pull $6.1 million out of your lottery and another $6.2 million from your sales tax (funds)," said Nan Barwick, assistant superintendent for fiscal services. "If these numbers rang true, we have the current funds available to go ahead and proceed, if we get permission from the county to draw these funds down."

The architect selected for those projects is Moseley Architects.

The school board's other goal is to build new Grantham and Spring Creek middle schools -- at a price tag of $35.3 million.

However, school board members said that, too, could be done without a tax increase using an option called "lease purchase."

The term "lease purchase" is essentially short for lease with option to purchase, officials said. Essentially, it means the architect would own the schools for a minimum of five years with the school board paying to lease them. School board members anticipate being able to use future lottery and sales tax revenue streams to pay on the lease, at the end of which the schools would be turned over to the Wayne County Board of Commissioners.

Such an approach to building schools has already been successful in Hoke County, and both schools Superintendent Dr. Steven Taylor and Jack Edwards, the board attorney, spoke favorably about their findings.

According to the board, the architect for the two schools under the lease purchase agreement would be SfL+a Architects.

Edwards explained the vote did not approve a binding contract for any project at this point, just the selection of architects.

Grantham proposed a joint meeting with the commission to explore the possibility of a lease purchase arrangement for the two new schools.

Board member Dr. Dwight Cannon questioned the need to vote on that.

"We've already agreed that we want to explore negotiations," he said. "So our next step is to court the county commissioners."

"The reason for that is because in the past, we have had a failure to communicate with them," Grantham said. "They didn't feel like we had made clear what we wanted to do. Basically we want to make it clear what we want to do."

Board member Arnold Flowers said the notion of having an official vote would send a "clear signal" of the board's intentions.

"Nothing that we're projecting here to do will affect the county property tax and nothing we're going to do here is going to require a tax increase," he said.

"Maybe we need a meeting like they had," board member Thelma Smith said. "Just go on and bring an architect in and invite us to come in and see. Didn't they do that? That's what they did to us."

She said she was in favor of the direction, but later expressed a nagging doubt.

"Do you see any reason why commissioners would not buy into this with us?" she asked. "I mean, is there any reason you think they won't join us in this venture?"

"Miss Thelma, I think the more appropriate answer is let them see the same presentations that we have seen and see the data that has come about so far," board member Rick Pridgen said. "Let Jack (Edwards) go through the contract that's been there and then I think it would be more appropriate to answer after they (commission) had a chance to experience what we've had to experience."

"My gut feelings are that the majority on that board, and it doesn't take seven, it just takes the majority just like our board," Flowers said. "And they're going to have discussion, I'm sure, and rightly so because everybody comes from different elements. But I feel like the majority would be on board with you. I really do."

Grantham was more succinct.

"We're asking the county to let us spend our money," he said. "We're not really asking for any kind of tax increase, or any kind of revenue stream from the county commissioners. We're asking them to at least look into the lease purchase arrangement with us."