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It’s complicated: Talks begin on HCHS

South Boston News
Members of a joint facilities subcommittee charged with developing a plan for the future of Halifax County High School. Seated at the end of the table is Ted Cole with Davenport & Company, the county’s financial advisor. / February 17, 2020
With $100 million in sales tax revenue flowing in over the next 30 years, Halifax County may have enough money to pay for a new high school without the need to resort to further tax increases.

Or maybe not.

Halifax County could save some $70 million in borrowing costs if it moves forward with a high school modernization plan in time to take advantage of what a financial consultant described as a “highly favorable interest rate environment.”

Unless the market changes.

School officials have considered the construction of a 1,500-student high school, which may be too big with enrollment trends pointing downward — or not, if the projections are wrong.

Members of the Halifax County Board of Supervisors and School Board convened Friday afternoon for the first session of a joint facilities subcommittee to mull these issues and many more as officials work to come up with a final answer for what to do about the county’s aging, tattered high school.

Over a span of nearly three hours, members of a joint facilities subcommittee — three supervisors and three trustees — sat around a table to hear presentations on possible fixes for HCHS, with an eye towards maximizing dollars from the recently-enacted 1-percent county sales tax, dedicated exclusively to school capital needs.

County Administrator Scott Simpson, seated at the head of the table with Superintendent of Schools Mark Lineburg, cautioned members of the joint panel to keep in mind there will be no second chances — and that the high school isn’t the only school building that Halifax County must upgrade for coming generations of students.

“Whatever decision this group makes is the decision we need to stick with for the next 30 years,” said Simpson.

Simpson noted that it will cost millions to fix, maintain and possibly consolidate the county’s fleet of elementary school buildings, especially older facilities in the northern part of the county. Halifax County faces many other financial challenges, Simpson added, citing a big one — the pressure on fire and rescue departments to maintain staffing at a time when volunteerism is on the decline.

Another sobering possibility: the possible demise of the coal-fired Clover Power Station, which brings in about $2 million in annual county tax revenue.

“There are a lot of items out there we need to think about,” said Simpson.

Much of Friday’s panel discussion centered around two presentations — one on the options for modernizing HCHS, the other outlining the county’s fiscal capabilities. The latter presentation, by public finance consultant Ted Cole of Davenport & Company, offered a number of money variables for panel members to consider.

By itself, the annual revenue from the sales tax — around $3.3 million — would finance borrowing of around $51 million, Cole said. According to school officials, that sum would not be enough to pay for any of the three options that school officials have developed for HCHS: repair, renovate or replace.

That was the subject of an earlier, detailed presentation by Scott Worner, director of secondary education for Halifax County Public Schools and the Central Office’s point person on HCHS modernization. Worner spelled out the pros and cons of repair, renovate and repairs options for HCHS — which would cost somewhere between $63 million to $107.3 million.

To handle any of those numbers, the county will need to tap into additional revenue, Cole told panel members.

Two possibilities present themselves: an increase in property taxes to go along with the sales tax revenue, or no tax increase, with the extra money obtained by dipping into the county’s cash reserve for debt.

With much of the debt service cost falling off after 2027 — when middle school renovations and construction of Cluster Springs and South Boston elementary schools are fully paid for — the county will have around $6.9 million annually to rededicate to school facilities spending.

The four financing scenarios that Cole outlined for panel members are as follows:

» the first calls for relying solely on the 1-cent sales tax revenue to borrow $51 million. That sum would not be enough to replace HCHS’S failing systems and repair the interior and exterior of the building, school officials say.

» the second option calls for borrowing $75 million, supported by sales tax revenue and expiring debt service.

» or Halifax could borrow $100 million — roughly the projected cost of a new high school facility — by relying on the sales tax and a temporary bump in the real estate tax, estimated at around 8 cents on top of the existing rate of 50 cents.

The increase could be temporary, Cole said, because debt service demands would tail off in future years.

» or, the county could borrow $100 million by tapping a combination of sales tax revenue, expiring debt service funds and a property tax increase of 3.3 cents.

While the first two options — for $51 million and $75 million — would leave tax rates untouched, it’s also possible that the county could borrow $100 million without any need for more tax revenue, Cole said. That’s because loan projections are based on borrowing at 5 percent interest. Currently, market rates are sitting at 2.4 percent.

The lower interest rate would save Halifax County about $70 million over the 30-year life of a loan to fix HCHS, Cole said. Borrowing costs are at or near historical lows, and have been stable for some time. “We keep saying rates are going up, and it hasn’t happened,” said Cole.

Sandra Garner-Coleman, one of the three school board appointees, said at least one upshot of Cole’s presentation is clear: the county should move as quickly as possible to lock in borrowing at 2.4 percent.

“Is that something we can agree to?” asked Garner-Coleman. “Take it back to your boards — the people that are here, do you think that’s a good suggestion?”

As a practical matter, Simpson interjected, it could take a year to follow through on such a debt issuance, based on the county’s ability to begin repaying the loan.

Making the numbers work was one of only several uncertainties for the panel’s consideration.

Members also debated how to handle construction disruptions at the high school if the decision is made to opt for basic repairs or more extensive renovations to the facility. According to Worner, the repair and renovation options would take anywhere from eight months to 40 months to complete. The work would require moving classes out of the main building and into leased mobile units.

Ricky Short, ED-1 supervisor, suggested an alternative idea: busing students to classrooms that could be set up inside the Bethune Office Complex in Halifax. Space would become available with the judiciary moving out of the Bethune Complex and back into the renovated courthouse. “We already bus students to the STEM Center,” Short noted.

Garner-Coleman questioned whether that option would be feasible, but she also voiced distaste at the idea of holding classes in modular units. “It’s horrible,” she said. “I don’t want to embrace that.”

Panel members questioned two aspects of tentative plans for new school facility: its size and the construction budget for athletic facilities, including a teardown and rebuild of the HCHS football stadium.

While details are being kept under wraps during a negotiating period, the Central Office has received two package proposals for a new high school, from separate contractor-architect consortiums under the state’s Public-Private Educational Partnership Act (PPEA). In general, school officials have spoken of replacing the 312,000 square foot high school with a 285,000 square foot facility, capable of housing 1,500 students.

With enrollment at the high school around 1,300 students and shrinking, members of the panel called for constructing something closer to a 266,000 square foot building.

“I don’t know why you’d plan to build a school for 1,500 students,” said Simpson.

As a rule of thumb, Worner said, a reduction of 20,000 square feet in the building size would save about $6.4 million on construction costs. Lineburg, speaking to that concern and others, said “we’ve been real particular not to guess at any numbers” but “I think any of it is worthy of consideration.”

Simpson also brought up the estimated $8 million expense to rebuild and renovate athletic facilities, saying Tuck Dillard Stadium could be fixed for far less by tearing down the visitors seating and putting the home field bleachers there along with other facilities, including a modern press box.

Visiting fans could go sit in bleachers that could be built where most of the stadium now stands. “There’s a lot of options you need to think about,” Simpson said.

While expressing openness to suggestions, school officials raised concerns with another idea for lessening expense and disruption — returning sixth graders at HCMS to the county’s elementaries, and shifting ninth graders to the middle school while work is under way at the HCHS campus.

There are several problems with that idea, Worner said, including the fact that the middle school and high school operate on separate classroom block schedules. Although they would be housed at HCMS, ninth graders would remain high school students.

Also, Worner said such a plan would complicate athletics at both the high school and middle school, and more importantly, require a redrawing of elementary school attendance zones.

“If you take the current sixth grade class and put [it into the elementaries], you’re not going to be able to fit them into some of the buildings, so there would have to be some rezoning as well.

“It’s doable, but there’s a lot of collateral — I don’t want to say damage, but there’s a lot of collateral things that would have to happen,” said Worner.

He acknowledged that the schools could save money by shuffling students to other buildings — perhaps as much as $3.2 million — but Lineburg expressed skepticism that the estimate would hold up in practice. “I don’t think it will be a significant savings if we do that,” he said.

As the meeting drew to a close, members of the joint subcommittee broached another topic: how to present the information on options for HCHS to the public at a series of town hall-style meetings that are tentatively scheduled for March.

The meetings will be held at Cluster Springs, Clays Mill and Syndor Jennings elementary schools and Halifax County High School to bring the issues to the attention of residents throughout the county.

The joint subcommittee will hold its next meeting on Thursday, March 5 at 4 p.m.

Repair, renovate or replace: school officials offer estimates

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When has a tax been temporary? The county decals were suppose to be temporary. Now they are 47! The only good thing that may come out of reduced registration fess from the democRATS is that the cost of the county decal would have to go down.

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