Joint Planning Committee questions architect’s financing option

Published 12:00 am Thursday, September 11, 2014

Some members of the committee planning for the Rowan-Salisbury School System’s capital projects questioned cost estimates presented to them this week for two schools.
Plans for Knox Middle School and a consolidated elementary school were the focus of Tuesday’s Joint Planning Committee meeting.
Robbie Ferris, president of SFL+a — the architectural firm that is handling the two projects — presented a slightly abbreviated version of his discussion with the school board Monday.
“You’re getting really, really new information that we really haven’t vetted through at all,” Superintendent Dr. Lynn Moody told the Joint Planning Committee.
The school board saw the material for the first time and hasn’t voted on any aspect of the process.
She added that school board members wanted to share all the information they had as soon as possible in the interest of transparency.
Although talks have primarily centered on renovating Knox Middle School, a building evaluation issued by the N.C. Department of Public Instruction shows it would be more costly to renovate than demolish the building and rebuild.
Ferris discussed different project options and construction timelines for the two schools.
In order to not go over budget, Ferris proposed a 75,000-square-foot elementary school for about $16.6 million and a 76,000-square-foot middle school for about $17.4 million.
The elementary school would only be slightly under the Department of Public Instruction’s guidelines, but the middle school would fall nearly 20,000 square feet short.
“They are guidelines,” Ferris said. “You don’t have to do everything DPI says you should do.”
Ferris added two additional middle school options to make the school meet the department’s expectations. One comes in at 94,811 square feet and would cost about $21.4 million. The other would be 102,343 square feet and include an auditorium, for about $23.8 million.
The group spent a majority of their time discussing financing options, however.
Based on the county’s funding schedule, the district will receive the money for the two projects in three phases — $12.5 million in 2015, $3.5 million in 2016 and $18 million in 2017.
According to Ferris’ presentation, if the school system decides to go with a traditional delivery method, construction costs could inflate approximately 6 percent and the interest rate could inflate roughly .5 percent each year, leading to a total inflation cost of nearly $12 million.
Leasing from SFL+a, he said, would avoid inflation because the project could start almost immediately. The 4 percent interest on the lease would only equal $2.8 million for savings of more than $9 million.
But Commissioner Craig Pierce said he felt SFL+a exaggerated the cost for the traditional delivery method.
Pierce, who works in construction, said the 6 percent inflation rate estimate was too high.
“I think we’re due for some inflation without a doubt,” he said, but added he felt 1.5 percent was a more realistic figure and said the interest rate might not go up at all.
“You’re right,” Ferris said.
He added that the 6 percent figure was a speculation, but noted that the last time the Rowan-Salisbury School System built several schools, the inflation rate drastically jumped, causing the district to lose funding for one of the schools.
Ultimately, the group decided it was too early for that kind of discussion, but that Interim County Manager Leslie Heidrick would begin discussing the county’s financial constraints with SFL+a to come up with a more realistic figure.