School board chief backs downtown central office

Published 12:00 am Sunday, January 8, 2012

By Sarah Campbell
SALISBURY — The head of the Rowan-Salisbury Board of Education said he still wants to see the district’s central office downtown.
That’s despite Rowan County commissioners’ decision to hold off on approving the proposal in order to weigh other options.
“I can’t speak for the entire board, but I do know the general feeling is that we ought to go for the downtown center,” Chairman Dr. Jim Emerson said. “The bottom line is that we know they hold the purse strings, but we think the Board of Education ought to be able to pick the site.”
The proposal includes two financing options, one through a private developer to enter a lease-purchase agreement and another to use conventional financing by borrowing through the county, to construct a new facility.
Salisbury City Council members have agreed to donate the land worth $200,000 at the 300 block of Main Street for the three-story, 62,000-square-foot building. The city will also provide parking for up to 160 vehicles.
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But commissioners have raised concerns about the financial details of the project.
New Market Tax Credits will knock the final cost of the building from $8. 6 million to $6.9 million, but that doesn’t include interest.
If the school district enters a lease-purchase agreement with Charlotte-based developer Bryan Barwick, its total annual payments, starting in 2014 and ending in 2021, would equal an estimated $9.5 million, assuming the lease rate is 4.5 percent. No upfront money would be required.
The school system could save operating costs in excess of $4.4 million over a 10-year span by consolidating its five administrative offices. That would eliminate additional rent and duplicated services such as utilities, Internet, cleaning and clerical.
It would also eliminate maintenance costs to the facilities. The district anticipates having to shell out about $3.2 million in repairs and upgrades to its Long and Ellis street administrative offices within the next decade.
The district will also have access to sales tax money for capital projects after it finishes paying off bond debt in 2015-16. That will free up at least $1 million a year to put toward the new building in downtown Salisbury.
“The main thing that I get real bent out of shape about is the county is putting nothing into this, all we want is permission,” Gene Miller, the district’s assistant superintendent of operations, said.
Miller said after years of trying to consolidate the offices with no success, typically because of the lack of funding, he began searching for other ways to get the project done.
“That’s when Randy Hemann and Bryan Barwick came into the picture and said, ‘We’ve got a way to build this building,’ ” Miller said. Hemann is the director of Downtown Salisbury Inc.
Without upfront funds, Miller said there is no other way to get the project done unless the county borrows the money.
“The point I want to get across is we don’t have any money,” Miller said. “People who think we’ve squirreled away all this money to build a building are wrong.
“We’ve either got to depend on the lease or we’ve got to depend on the commissioners to borrow the money. That’s where we’re at right now.”
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If county commissioners opt to take out a loan for the building, it could end up costing more than the lease-purchase scenario through the developer, coming in at roughly $9.8 million, if the interest rate is 3.5 percent.
County Finance Director Leslie Heidrick told commissioners the county could borrow the money at an interest rate lower than 3 percent, depending on the market.
When the county closed on a loan for its communication project in December, it received a 2.38 percent interest rate on $9.7 million to be repaid over 10 years.
Miller said the district will lose out on the $1.5 million in tax credits if it goes that route.
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Commissioners have been reluctant to vote on the downtown proposal, putting it off to have a special meeting to discuss other options at 3 p.m. Jan. 25.
That decision has ruffled the feathers of some school board members, who will discuss the central office during a work session at 5 p.m. Monday at the Long Street Administrative Office in East Spencer.
“We’ve looked at other options, we didn’t just start talking about this yesterday. We’ve examined all the options,” school board member Kay Wright Norman said. “Our board decided this is the best thing for this county, for the children and for the community at-large, so it’s time to get moving.”
School board member Dr. Richard Miller said it’s not the county commissioners’ job to pick a site for the central office.
“I think they have to understand that they don’t get to pick where the central office will be and they don’t get to pick the plan,” he said. “I ran as a candidate for school board the same way they ran for office. Let me do my job.”
Gene Miller has told commissioners that state law puts the school board in charge of determining the location of the building.
“The authority to locate and build school facilities rests with the board of education,” Ken Soo, a Raleigh-based attorney who represents the school board, wrote to Gene Miller in an email. “The Board of County Commissioners has finance oversight and must approve a school board’s purchase of property and capital budget.”
Richard Miller said he feels commissioners view the school system as a drain to the county rather than an asset.
“I think it’s high time that not only the county commissioners, but the community recognize that the school system is one of the largest employers in the county,” he said. “We employ more than 3,000 people and we have a payroll of over $110 million.
“I’m getting weary of anything for the central office or for the school system in general being played as taking away tax money.”
Emerson said continuing to operate out of five different offices is an inefficient use of taxpayer dollars.
“I am conservative and tight-fisted when it comes to money, and as a taxpayer, I don’t what to waste a dime,” he said.
Downtown is the ideal location for the administrative offices because of its proximity to county and city government offices, Emerson said.
“I would think that years down the road, we will be very sorry if we don’t take advantage of the offer by the city to use that property,” he said.
Richard Miller said he’s in favor of the downtown office because of the economic development opportunities.
“It builds the community, it brings jobs,” he said.
Gene Miller said he’s going to recommend the school board stay the course with the downtown office proposal during Monday’s board meeting, despite commissioners’ vote to consider other options.
“I hope the board says ‘We want to go downtown, that is what we presented to you and that is what we want to do,’ ” he said.
Contact reporter Sarah Campbell at 704-797-7683.
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