What should school system do about a central office?

Published 12:00 am Saturday, August 20, 2011

By Sarah Campbell
SALISBURY — School and county officials agree the Rowan-Salisbury School System needs a central office, but final approval to either build or buy one has eluded them for years.
Since the city and county districts merged in 1989, administrative staff have been spread out in multiple buildings.
Both boards cite safety concerns at the Long Street administrative office in East Spencer and the inefficiencies associated with operating five facilities as concerns with the current setup.
“I think it’s apparent to anybody who looks at it with non-tinted glasses that it’s not a good situation,” Chad Mitchell, chairman of the Rowan County Board of Commissioners, said.
At least a dozen options have come to the table since the merger, with each plan failing to get the green light from both groups.
There was the Bendix Building in 2005. County commissioners pulled their support after finding out it was on state and federal inactive hazardous waste site lists. Under the proposal, the county would have purchased the property for $2.75 million and spent another $1.25 million for renovations and furnishings.
Then in January 2008 there was the proposed consolidated school office and city conference center on South Main Street for $16.8 million.
Limited funds put that option out of reach.
Last year, commissioners offered the district the former Department of Social Services building on West Innes Street. But at 22,000 square feet, it was smaller than the office on Long Street, which is 29,000 square feet. Talks died after the county officials refused to fund a feasibility study requested by the school board.
The topic came up again at the June Board of Education meeting when private developer Bryan Barwick and Randy Hemann, executive director of Downtown Salisbury Inc., presented a plan to build a 62,000-square-foot facility in downtown Salisbury.
The construction would cost about $8.9 million, but Barwick said a New Market Tax Credit could knock off $1.5 million.
Although school officials tout the proposal as the most viable option to date because no upfront funds are necessary, commissioners might need some convincing before they offer their stamp of approval.
Why a central office?
The school district estimates it would save $200,000 a year by combining its offices and cutting the cost of duplicated personnel, management and maintenence.
“The data suggests that we are not efficient in the operation of five different locations,” school board member Dr. Richard Miller said.
Superintendent Dr. Judy Grissom declined to be interviewed for this story, but sent information about the current setup to the Post through district spokeswoman Rita Foil.
The Long Street Administrative Office poses safety threats and faces infrastructure problems, the statement said. It would cost an estimated $2 million to upgrade the facility.
The 88-year-old building has floor deflections of up to 2 1/2 inches in several areas, according to a January 2008 report from structural consultants Interface for Consulting Engineers.
The firm said the building has “far exceeded the useful service life of floor systems utilized as office and administrative space.”
“In our opinion, the structural integrity of the major floor systems may be compromised with the continued use of the building as office space and record storage space,” the report states.
District officials removed storage items from the balcony in the meeting room after the structural consultants said it was in danger of collapsing.
The Long Street Office uses outdated window units to cool the building and steam radiators as a heat source.
Butch Bivens, the district’s maintenence director, said installing central air would be more energy efficient, but that would require spending a substantial amount of money.
School officials said the Long Street office also acts as a hub for the district’s operating systems, including payroll, email, Internet and telephones, but it needs technology upgrades to continue functioning properly.
“There are more frequent instances occurring where the technology systems are down or needing repair due to the facility problems at the site,” Grissom said in her statement.
Fans continually blow on the telephone system to keep it dry in the building’s basement.
The two-story Long Street building also lacks an elevator and adequate space.
School board member Bryce Beard said files are stored in the basement, which is damp and dark, because there is no room for them anywhere else.
File cabinets also line the hallways upstairs because there is no space for them inside offices.
Although the district has cut major spending on the building at the request of county commissioners, officials say if they don’t get a new building soon, they’ll have to move ahead on spending $2 million to upgrade it.
“A new building would mean a big cost savings over the long haul,” school board Chairman Dr. Jim Emerson said. “In addition, you wouldn’t have to spend millions fixing up old buildings and still have old buildings.”
Although at 106 years old, the Ellis Street office is older than Long Street, Bivens said it is more structurally sound because it is a single story.
School officials say the building poses fewer challenges, but its age also makes it susceptible to issues.
School board member Mike Caskey said he would like to see a consolidated office so the district can terminate its lease at Corporate Square, a $30,000 per year expense.
School board member Kay Wright Norman said the district has wasted so much money on repairs and duplication that it could have built an office by now.
“It’s not just a place for the superintendent to have a big office. It’s where you run the business of the school system,” she said.
Beard said with building costs down, now is the time for the district to act.
“This is a 22-year-old Band-Aid that just won’t work anymore,” he said.
Other capital needs
School system officials say the central office isn’t the district’s only capital need.
Built in 1927, both Woodleaf and Cleveland elementary schools need to be replaced due to aging. Knox Middle, constructed in 1958, is also on the list for replacement because of the way the campus is spread out.
But district officials say it would cost about $55 million to rebuild those schools, and the only way to obtain that much money is through a bond referendum.
The recent controversy associated with the upkeep of Knox Middle has some questioning whether the district should pursue a central office.
Carl Ford, vice chairman of the county commissioners, said he’d like to see the district address the “deplorable conditions” at Knox before focusing on a central office.
“Let’s get these school buildings straightened out first,” he said. “I’ve heard from a dozen school system employees in the last couple of weeks and not one of them wants a new central office because of the economy and the conditions at the schools.
“And I didn’t ask them about it, they came to me.”
But Beard said the district has been “very dedicated’ to upgrading its buildings.
“We’ve done additions or renovations to almost all our schools,” he said.
“Since the merger, we’ve built nine new schools, which were all funded by bonds.”
Commissioner Jim Sides accused the district of focusing solely on a central office rather than school buildings.
“I contend that they have neglected maintenance and upkeep at some of the schools for the past four or five years,” he said.
Mitchell said he also doesn’t want the schools to be left in a “state of disrepair.”
“I don’t see it as much as a priority debate as a technical debate on how to free up money so those schools can be replaced, renovated or repaired,” he said.
The latest plan
Norman called Barwick’s plan to build in downtown Salisbury the best option she’s seen in her 15 years on the school board.
“In the past, I think all of them were less than ideal,” she said.
The district could acquire the building through a lease-purchase agreement. No payments would be required until the employees move in.
“It seems like the smartest way to develop a central office if you don’t have the money to put into it right now,” Norman said.
Sides said he’s not for any plan that involves a lease.
“The plan they have submitted is the most ridiculous plan I believe has ever been submitted,” he said. “If now is the time for a central office and it’s the right thing to do, we ought to get the funds, build the building and we ought to own it.”
Commissioner Jon Barber said he hasn’t made up his mind about the project, but he does see some positives.
“I am very open to private/public partnerships,” he said. “The option being considered by the Board of Education, if I understand correctly, would cost Rowan County government no money out of the general fund and we would collect property tax revenue for eight years.”
Barber said it could also spur the downtown economy, which could bring jobs to the area.
Hurdles to cross
Mitchell said he hasn’t seen a formal proposal yet, but the idea seems intriguing.
“There are some hurdles that have to be cleared, things like (Local Government Commission) approval; the thing is dead in the water without that,” he said.
The plan could face some challenges before it’s approved by the Local Government Commission, said Leslie Heidrick, the county’s finance director.
She said Biff McGilvary, a Local Government Commission official, told her the plan would take “extensive consideration.”
“He said to his knowledge nothing containing the elements of this lease/purchase agreement have been approved by the Local Government Commission in the past,” she said.
The proposal includes three different scenarios with zero, $1 million or $2 million in principal reductions.
“I don’t think the $1 (million) and $2 million scenarios would be approved by the LGC because there are certain requirements over financing,” Heidrick said.
She said it would create a backlog of debt that is not acceptable to the state agency.
Heidrick said another thing that jumped out was the New Market Tax Credit of $1.5 million.
“I don’t know that it is certain they can receive this tax credit,” she said. “I know they can apply for it, and whether they can receive it or not would certainly be in question until it’s approved.
“The LGC would not approve what they call contingent financing.”
But Heidrick said officials at the Local Government Commission are willing to work with the county and the district to come up with a solution.
“I think there are some opportunities, we just haven’t discovered the right one,” she said.
Ford said if the Local Government Commission gives it the go ahead, he’ll at least consider the latest option.

Contact reporter Sarah Campbell at 704-797-7683.
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