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Thornton presents cost estimates for single Mecklenburg County high school

SoVaNow.com / September 03, 2014
Mecklenburg County Superintendent of Schools Dr. James Thornton spent part of the August meeting of school trustees presenting his own analysis of the cost to build a new consolidated high school in Mecklenburg County in response to a recent analysis put forth by County Administrator Wayne Carter.

Using numbers compiled in 2010 by Construction Control Corporation engineering firm, McGuire Woods law firm, Southwest Securities and the SWS Group, Thornton said Mecklenburg County homeowners would see a 7 cent increase in their property taxes if the County built a new consolidated high school today. For the homeowner whose house is valued at $200,000, that equals $140 per year in new taxes.

An earlier analysis put forth by County Administrator Wayne Carter concluded that the cost to build a new consolidated high school, with no borrowing, would be about $75 million and translate into a 16 to 18 cent property tax increase for Mecklenburg County homeowners.

Carter estimated the cost to build a combined high school/middle school complex at $125 million, and said this could cost county taxpayers 24 to 28 cents in additional property taxes per $100 of valuation. By comparison, Thornton estimated the cost of the combined facility at around $105 million and said the cost to county taxpayers was 15 cents in additional property taxes per $100 of valuation.

The bottom line, Thornton told school trustees and parents at a recent school board meeting, “I can show why waiting [to build one or more new schools] costs us, and does not save us any money.”

He said that he understood the desire of the Board of Supervisors to limit the amount of debt incurred by the County for building new school facilities. At the same time, in his opinion, the arbitrary requirement that the school system must first accumulate a construction down payment equal to 30 percent of the cost of a new building was unrealistic, and unnecessary.

In 2010, Mecklenburg County commissioned a study by a team of experts to determine building costs under three scenarios: a new consolidated high school, a new consolidated high school and middle school campus, and a new consolidated high school and middle school campus with three new elementary schools. Their findings, according to Thornton, do not align with the cost figures quoted by the County Administrator Wayne Carter at a recent meeting of the Board of Supervisors.

The 2010 report concluded that due to then existing financial incentives a new consolidated high school that would normally cost the County $65 million could be built for around $49 million. Similar savings were available to build a combined high school and middle school – typical cost was $105 million, but with 2010 incentives that was reduced to around $80 million and a combined high school, middle school and three new elementary schools, which would have typically cost $155 million to build, could come in at $117.8 million.

Thornton said the group took into consideration federal stimulus legislation that in 2010 included access to bonds known as “Build America Bonds” that carried with them 35 percent to 45 percent in tax credits, and access to 0 percent interest construction loans. None of these incentives are currently available for school construction.

The debt services on a project costing $49.4 million in 2010, with no down payment, was $3.3 million. The county was already setting aside $2 million per year into a capital fund. To raise the additional $1.3 million, Supervisors would have had to approve a property tax increase of 4 cents per $100 of valuation. This would have cost a homeowner whose property was valued at $200,000, $80 a year in new taxes.

Thornton continued. Today, assuming the cost to build a consolidated high school is still $65 million and there are no financial incentives, the debt service payment would be $4.4 million per year, with no down payment. Under this scenario, Thornton said the Board of Supervisors would have to increase property taxes by 7 cents per $100 of valuation to raise the additional $2.4 million needed to cover the debt service.

Even using current numbers, not those from 2010, in Thornton’s view the tax increase that the citizens of Mecklenburg County would face is less than half of that projected by Carter.

He performed a similar breakdown for the project costs to build a consolidated high school and middle school campus.

The 2010 construction cost for a consolidated high school and middle school campus was $79. 8 million. The debt service on this, assuming no down payment would have been $5.4 million. In order to raise the additional $3.4 million the county needed to pay the debt service – assuming the county continued to set aside $2 million – property taxes would have increased by ten cents. This would have raised taxes for the homeowner with a $200,000 house by $200 per year.

Today that same project would cost $105 million, according to Thornton. The debt service would increase to $7.1 million, with no down payment, and the tax increase would be 15 cents or $300 per year for the homeowner with a $200,000 house.

“Right now only one county [in region 8, the school region that includes Amelia, Appomattox, Brunswick, Buckingham, Charlotte, Cumberland, Greensville, Halifax, Lunenburg, Mecklenburg, Nottoway and Prince Edward Counties] has a lower tax rate than Mecklenburg.” Lunenburg County’s real estate tax rate is 38 cents per $100 of valuation, compared to Mecklenburg County, which comes in at 40 cents.

Cumberland County, which built a new school while Thornton was Superintendent, has the highest real estate tax rate of any in region 8, at 74 cents per $100 of valuation. The average tax rate for the regions is about 49 cents.

There are several benefits to moving forward with the construction of a new high school or a new combined high school/middle school complex, Thornton said. Chief among them, interests rates on construction loans are still low. “



The combination of great pricing with low interest rates will enable the county to realize savings.”

Thornton argued that “by waiting ten more years to have an arbitrary number like 30 percent down could eat up the potential savings of moving now.” He also noted that the County currently has $9 million saved in its capital fund and an additional $2 million in the school building fund that could be used for a down payment.

Thornton said he hoped his analysis would assist the public “with understanding the cost and tax implications of a new facility project.”

After the presentation, Sandra Tanner received approval from the trustees authorizing her, as co-chair of the joint education committee – made up of members of the school board and board of supervisors – to seek funding to hire an architect to begin the process of site selection and building design.

She also pointed out that should the county only build a new consolidated high school, they would have to spend additional money to “retrofit the existing high schools” turning them into middle school facilities. Glenn Edwards said RRMM architects from Chesapeake had estimated that cost at $16 million.

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This is a mistake! Thorton does not mention paying down the debt, just debt service, every time I have questions a politician on this, they finally admit that is just interest. Look at the problems we have in Halifax, we should have built two high schools. One school will not solve the problem! You have some people on the school board who voted to keep this guy because they want a new school. Buildings do not make education, the teachers do.


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