By Staff
Subcommittee to look at construction project, school system’s compliance audit
By NIKIE MAYO, News Editor
Several leaders representing Beaufort County and its school system will form a subcommittee to look at financial data related to the school system’s plan to build a new John Small Elementary School and the system’s compliance audit before a decision is made as to awarding a construction contract for the new school.
At a joint session with the Beaufort County Board of Commissioners on Thursday night, School Board Chairman Robert Belcher explained how the proposed new school would be paid for and commissioners’ Chairman Jay McRoy explained why the county is gun-shy about funding decisions.
Each board passed motions to form the exploratory subcommittee to take a look at the financial figures and hash them out. The subcommittee will include the chairman and vice chairman of each board, along with Superintendent Jeff Moss and County Manager Paul Spruill. They’ll work in “a cooperative man-ner,” Belcher said.
The construction bid for the proposed new school is $10.4 million. Another $400,000 goes toward “fees, land, permitting, etc.,” according to paperwork Belcher distributed at the meeting. An additional $280,998 is earmarked for a project manager. Thus, the project hovers at just over $11 million.
The school board accepted the construction bid in early January, but it needs the county to sign off on it. The school board also wants commissioners to allow the school system to draw money from the Public School Building Capital Fund and the state-lottery fund to help pay for the project.
The school board can’t tap into those two funds, which total $1,318,857, without a nod from the county. But commissioners want assurances that money is enough before they agree to earmarking it for the project.
Although school leaders contend they can build the new school without any more county money, commissioners appeared to need a little more convincing. Commissioner Ed Booth said he worries they are dealing with “iffy numbers” and Commissioner Hood Richardson said they couldn’t afford to be just close to the project’s cost.
That estimated allotment is $172,000, which is based on quarterly payments of $43,000. The last lottery-fund payment the school system received was $43,000, but that was “a bit of a disappointment,” Belcher said, because the state lottery hasn’t generated the funds that officials anticipated it would generate. Beaufort County’s latest allocation was down from its previous one.
The Rev. Robert Cayton, a county commissioner, told Belcher those numbers presented him “with a moral dilemma.”
The John Small project is the last project associated with the issuance of $33 million in bonds that Beaufort County voters approved in 2004. When that bond was approved John Small was estimated to cost $8.4 million. Of the bond money, only $4.9 million is left, creating what looks like “a big hole,” Belcher said.
The school board, using a combination of sales, reimbursements and deductions, has figured out how to fill that gap, as long as it has access to the $1.3 million the county must approve, according to Belcher.
McRoy stood at a dry-erase board to explain what he called “a lot of misconceptions” about the county’s $13 million fund balance.
He said the state remits the county’s sales-tax allocation “three months behind,” but that appropriation is reflected even if it’s not yet there.
Another big chunk of that balance, he said, goes straight to Medicaid relief.
Some of the money, too, is allocated for employee payroll, he said. Further, the government requires the county to maintain a minimum fund balance or it can’t borrow money, he said.
Putting another wrench in the equation, he said, is the $10 million loan for Beaufort County Hospital’s new surgical unit. The hospital is responsible for repaying the loan. But the county had to sign off on it, and in doing so, has borrowed its maximum amount for the year, he said.
As long as the county borrows no more than $10 million, the county can retain its “favorable” 3.8-percent interest rate on that loan, McRoy said. If the county must borrow more than $10 million this year, it loses its “qualified debt” status that interest rate goes up to about 4.2 percent. That rate would be applied to the county’s total loans, not just to the amount over $10 million, according to Spruill.
County and school leaders agreed to “take a look at the numbers” behind the school board’s request. Those meetings will not be open to the public.
But the subcommittee’s review of the compliance audit will be done in a public meeting, according to the wording of the motions.