February 25, 2020
By: Dwayne Page
A change of plans
Fearing that the Board of Education’s latest proposal for a multi pre-K to 8 school construction project was something the county could not afford long term and still be able to fund other future needs, the DeKalb County Commission Monday night followed the budget committee’s recommendation to deny the Board’s request for a minimum of $48,685,000. The move will force the school board to change its plans for new school construction to something that won’t be quite as costly.
Ten commissioners voted to turn down the school board’s request including Dennis Slager, Sabrina Farler, Myron Rhody, Bobby Johnson, Jenny Trapp, Anita Puckett, Jerry Adcock, Jeff Barnes, Beth Pafford, and Bruce Malone. Two commissioners, Scott Little and Janice Fish Stewart voted against following the budget committee’s recommendation. Two other commissioners, Julie Young and Matt Adcock were absent.
Prior to the vote, County Mayor Tim Stribling asked Dennis Slager of the budget committee to give a report to the commission on the recommendation.
“The budget committee met Wednesday, February 19 to consider the request by the Board of Education for funding of a minimum of $48,685,000. Steve Bates, the financial advisor was present. After much discussion the committee voted 5 to 0 to not recommend funding and instructed the county mayor to notify the board of education,” said Slager.
Sixth district member Jeff Barnes moved to follow the budget committee’s recommendation and deny the funding request. Slager offered a second to the motion.
Third district commissioner Jenny Trapp said while she would vote to deny the school board’s request, renewed efforts should be made to address immediate and long range school construction needs.
“I will vote to concur with the budget committee’s recommendation but it has not been an easy decision for me. I am committed to funding a new school while also being mindful of the taxpayers. I am disappointed that the conversations continue to happen between the county commission and the board of education but yet no progress is ever made. I personally would like to see a long term plan from the board of education about our immediate and forthcoming building needs and then ask that the budget committee to create a long term financial plan that meets those needs. We are elected to make those tough decisions and as a commissioner, not on the budget committee, a lack of information presented to the rest of the commission has been frustrating. I would ask that the budget committee members be mindful of this as we continue our important work,” said Commissioner Trapp.
“We are going to have to build a school but we have to consider the taxpayers. What we are trying to do now is to hammer out how much (cost), how long (time table) and what kind of school (to build). The school (plan) that was presented was to make (expand) Northside for 650 students and about 700 students (capacity) for the other two new schools proposed. What we need is to see what we can do to make Northside and the second school (new school) a little bit larger than what we wanted to handle this crisis because we may soon be busting at the seams. If we made them at 900 (capacity) that would be a heck of a job for a principal and staff but we have to reach some happy medium so that we can divide this up and not break the county and taxpayers,” said Commissioner Jerry Adcock.
In January Director of Schools Patrick Cripps delivered a letter on behalf of the school board to County Mayor Tim Stribling and the County Commission making a request for funding of at least a minimum of $48,685,000 to build 2 Pre K-8 schools and to make renovations to Northside Elementary converting it a Pre K-8. “ We are seeking your approval of funding to proceed with land purchase and the school building project,” said Cripps in the letter.
During the January regular monthly meeting, the County Commission voted unanimously to send a letter to the Board asking for more details on their latest proposal before granting a request for funding.
Steve Bates, the county’s financial advisor, told the budget committee last Wednesday that while the county could issue bonds of $55 million to cover the school board’s request the annual debt payment to the county would be $3 million a year for up to 25 years and new revenue would be needed to fund it. Such a long term obligation would also hamper the county’s efforts to fund other needed projects in the coming years, such as perhaps another new school or jail.
“If you do $55 million at $3 million a year you’re looking at a minimum of a 60 cent property tax increase,” said County Mayor Tim Stribling during the budget committee meeting.
When asked about a possible wheel tax to help fund it, Stribling said last week that a $50 wheel tax would only generate about one million dollars a year and the property tax rate would still need to be raised by probably 40 cents.
The county commission could take action on its own to implement a wheel tax but passage requires at least a two thirds vote (10 out of 14) in support on two separate readings at least a month apart. Residents opposed to a wheel tax could mount a petition drive between the first and second readings to force a public referendum on the question.
Even if the county were to act now on tax increases, Bates said last week that sufficient funding would not be in place for a school project until at least next spring.
“We can’t issue bonds right now, meet cash flow requirements, and take on that kind of debt right now. You don’t have the revenue in place and even if you adopted a revenue source now it probably won’t hit until next March anyway when taxes come in. Even with a wheel tax, February, March, and April are the biggest months for license registration and renewals so you are months behind even if we start now,” Bates continued.
“What is the long range vision is what I would ask the committee on what you want to do and how you want to get there in order to maintain a low tax rate and cash balances. I don’t care what you build. My job is to help you do it at the lowest cost and tax rate but $55 million will strap the county down for a long time because you have to worry about what comes after in 10 years if you need a jail. What happens if you need another school? That is where the long range planning will have to come in. You have to address how much revenue are you willing to raise and are you going to be okay with that for the next 25 years because if anything comes after that then its only to the extent you have paid off some debt that you have any debt capacity left,” said Bates
Should the county choose to fund a less expensive school construction plan, Bates said the payment schedule would be the same but for a shorter and more manageable term.
“I think the revenue stream that is required to keep you where you need to be financially will stay the same. If you do a $30 million bond issue the payment will still be $3 million to help you get to where you need to be but you can do it for 10 years rather than 25 years and pave the way for something else in 9 to 11 years and whether we take some out of the local purpose fund plus a wheel tax and property tax all that can be hashed out later. In 10 years you can knock it out pretty quickly and do something else but if you stretch it out to 25 years it ties you down a long time,” added Bates.
“In DeKalb County you have a debt management policy that says you will keep debt at 9% of assessed value which means about $42 million and debt per capita at $2,200. If you issue $55 million debt per capita it is probably going to be over $3,000 and 12% of assessed value which means you will have to amend your debt management policy,” said Bates.
“This county has been good over the years in managing debt . There have been people prior to this commission and budget committee who have managed debt well in the county and I think it is our duty to do that going forward,” said County Mayor Stribling during last Wednesday’s budget committee meeting.