‘Clock’s ticking’ on new middle school

By BROOKE J. WOOD

brooke@southwesttimes.com

For those who haven’t been paying attention, there were two reminders this week that the decision about how to fund a new Pulaski County middle school is less than two weeks away.

“Between now and our next meeting, a decision will be made,” said Timothy Hurst, chair of the Pulaski County School Board, during its regularly scheduled board meeting.

A day later, Andy McCready, chair of the Pulaski County Board of Supervisors, confirmed that the board will make a decision at its July 24 meeting. During Wednesday’s work session, Davenport and Company presented its analysis of how bonds will impact property taxes to support the $45.7 million project.

Hurst pointed out that the school board began the process for building a new middle school five years ago.

“And here we are five years later, and the clock’s ticking,” he said. “We’re down to 30 days or less, and a decision will be made. A decision will be made to either vote to go ahead and fund the new middle school, or a decision will be made to allow the citizens to make that decision, or a decision will be made not to build a new middle school.”

“I think the public understands we’re trying to do our very best to meet the deadline that’s given before us, and that’s exactly our goal, to meet that deadline of July 24,” McCready told those who gathered for the work session. “Don’t want to hold it up. If we need to have another meeting, we’ll have another meeting. If it needs to be at 5:30 in the morning, we’ll do it.”

Earlier in the meeting, the supervisors agreed to pay Spectrum Design $13,000 to complete an architectural review of RRMM Architects’ middle school plan by Thursday. Spectrum was the only one to bid on the project due to the tight deadline. That review will be discussed during a Thursday work session.

Calling the architectural review “a good value,” Supervisor Joe Guthrie made a motion to accept the contract, which was passed unanimously.

County Administrator Jonathan Sweet told supervisors the county is considering asking Hurt and Proffitt to do a traffic and transportation assessment on the RRMM site plan on Route 11, across from Cougar Xpress. The review will look at such things as traffic volume, signal, turn lanes, transportation infrastructure and costs. It will also look at the feasibility of Hatcher Road as an entrance to the property.

Sweet said Hurt and Proffitt “felt like they could be ready to present a report on the 20th.” He also said the total cost for the study was set “not to exceed $14,000.”

Guthrie said he thought the road study didn’t need to be done by July 24. Due to time constraints, he said if there was a “hiccup with the road study,” he would rather wait on that than the decision on a bond referendum.

Sweet added that if the traffic review revealed something surprising or unexpected, staff would share it with the school board as well. Guthrie suggested the engineering firm behind the site plan, Gay and Neel, also be told about any unexpected findings.

Courtney Rogers, a senior vice president with Davenport, explained that the firm reviewed the county’s fiances and debt to determine the amount of debt capacity the county can incur “while staying within prudent financial guidelines.” The firm also looked at debt affordability, or the ability for the county to repay the debt with cash flow, which he equated to the ability to pay a monthly credit card bill.

He said interest rates are currently 2.5 percent and, at this time, the county has a “lot of capacity” to take on more debt.

Rogers explained that Davenport looked at the county’s debt ratio as a whole, “because, if you decide five years from now you want to go out and borrow something for some other project, this middle school project is going to affect the debt as well as your own debt.”

Sweet said that, from the county’s standpoint, once Davenport found out the county had the capacity, the firm “really wanted to focus on the affordability aspect and cash flow.” He pointed out that Pulaski County’s debt capacity is in step with other Virginia counties. He also noted that the county’s rating of debt as a percentage of expenditures follows Davenport recommendations.

Rogers said the school system has $22.1 million of debt service, and the county another $3.2 million.

“The bottom line is that we have to come up with $3.2 million more per year [to cover the increased debt],” Rogers told supervisors after reviewing the county’s debt affordability.

Noting that one penny equals $250,000 in revenue through property taxes per year to the county, he presented six plans for obtaining bonds. Based on expected tax revenues, he presented three base plans, all with 20- and 25-year term options. He also said either general obligation or Virginia Public School Authority bonds were viable for the project.

The first Davenport scenario maintained a level debt service, meaning the annual payment of interest and principal would remain fairly constant over the life of bond issuance. Under that scenario, property taxes would increase by 14.1¢ for a 20-year obligation and 12.4¢ for 25 years.

Pulaski County property taxes are currently 64¢ per $100 of assessed property value.

The second plan used a heavy wrapped debt service, resulting in a 7.6¢ to 7.7¢ increase in taxes with both 20- and 25-year plans. Wrapped debt service would pay off existing school obligations before it began paying the principal on the new middle school debt.

Rogers presented light debt service wrapping as a third option. In this plan, principal is paid off the existing debt only for the first five years, after which the county would go to level financing. This would result in adding 10.6¢ on a 20-year obligation or 8.9¢ on 25 years.

Rogers didn’t recommend the heavy debt wrapping scenario. Sweet said he wouldn’t consider heavy debt wrapping “prudent” because it would hamper the county’s “ability to provide services, capital” to the county and school system in the future.

In the school board’s Tuesday meeting, Hurst said the school system recommended getting a bond through the Virginia Public School Authority, and enlisted Springsted, a advisor for public projects, to provide cost analysis. Springsted determined the lowest impact to taxpayers would come through a wrapped debt service that would increase property taxes by 8¢.

Hurst also thanked those who had worked “hard” on the new middle school project.

He thanked administrative staff, especially Superintendent Dr. Kevin Siers, along with Chris Stafford, an assistant superintendent, and Ronnie Nichols, director of operations. He also expressed gratitude to the programming committee comprised of students, school staff and parents, and to the building committee that included two supervisors and three school board members.

In a previous supervisors’ work session, architect Ben Motley with RRMM was asked about a project in Henry County that came in $4 million over budget. Motley explained that the school building was very close to the original bid, but they only got one bidder for site work. So, the firm rebid with changes to the site plan to reduce the overage from $4 million to $2 million.

By consensus, supervisors decided to get second opinions on the traffic and school design studies.

Tuesday, Hurst said the board went through a precise process to to pick the “correct architect, and Mr. Motley was absolutely the right choice.”

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