Chowan county planning to exceed its self-imposed 2% debt ratio to fund a massive high-school construction project without a taxpayer vote.
Based on the latest meetings and recent recommendation by the Chowan County School Board of Education, has formally recommended that the county commissions should use a USDA loan of $35 million dollars to fund Phase 2 of the proposed $50 million dollars high-school construction project. Keep in mind that the Edenton Gazette reported earlier that a Dallas high school renovated an older school in support of 2,000 students for $46 million dollars.
As the county prepares to assume new debt which needs to be repaid by the taxpayers until 2053, there remain many questions concerning this project, which have not been answered. Why does it cost Chowan County $50 million dollars for a declining student body of 600 high school students? What does the cost of renovating the high school cost over tearing it down and building a new high school when the cost of materials is sky high due to the pandemic?
Did the North Carolina state legislature understand that an administrative word change in lottery grant funding language would be interpreted by construction firms and/or boards that grants could ONLY be used for new school construction and used as a basis to only look at new construction for the high school? A well-architected renovation could be seen as new school construction if that was the end goal of the renovation.
It is agreed that the students in Chowan need great educational facilities and faculty, which is not in question. The question is, does investing $50 million dollars for 600 students at one school and maximizing the county’s debt level, as a result, leave enough in the budget for our elementary and middle schools? Does it support other county needs?
The analysis of costs for new construction versus renovation, required by the state superintendent’s office is in progress and after this is completed, a review by the state historical commission is required given the historical significance of the current high school. The Edenton Gazette will publish the results of the analysis and historical review once it is completed and made public by the state superintendent’s office.
While it is asserted that in the budget finance presentation (Page 11 of meeting minutes) created by LS3P and M.B Kahn Construction Co., Inc. that “The BOE reduced the scope of the HS project and used $50 Million as a projected budget for a fully funded project which resulted in No Tax increase when coupled with the State Grant!” The below chart clarifies this statement since while the funding does not increase tax rates in the proposal, for now, county taxpayers will bear the full load of repaying this USDA loan with taxes until 2053!
Do the county commissioners commit to not raising taxes in Chowan county through to 2053 when this loan is repaid? No, they would not make such a commitment because it would be unrealistic to do so. Taking on this much debt for the smallest county in North Carolina for many is unrealistic as well. Keep in mind that the ratio of benefit for the $35 million dollar loan would not be equitably distributed against all county needs.
Have the needs of the county been projected and evaluated until 2053 or will this be up to the next generation of County Commissioners to deal with. Do we need a repeat of emergency taxes as seen in Chowan County in 2008?
The recommendation would require the Chowan county board of commissioner to willfully exceed its self-imposed 2% debt ratio to fund a massive high-school construction project -without- a taxpayer vote.
Considering the past referendum to raise taxes in support of constructing a new high school failed to achieve taxpayer support. A recommendation to pursue a USDA loan by the Chowan County Board of Education circumvents taxpayer input via a referendum while expecting taxpayers to repay the debt many years into the future and possibly preventing funding of current or future needs within the county that a $35million dollar USDA loan could be applied toward.
The stated reason to pursue the USDA loan does not appear to be aligned with the needs of county taxpayers, as is highlighted below, the motivation appears driven by a desire to fund the project at any costs to the taxpayers, without a pathway for a taxpayer vote. Considering that the county will be free of debt by 2025 without this $35 Million dollar USDA loan
“Howard and Sasscer noted that if the county first decided to do a bond referendum and it failed, the county would not be able to then apply for a USDA loan.
“The federal government would find it hard to fund a project the people didn’t support,” Howard said.”Kevin Howard, Chowan county manager
Commissioners get update on new high school project – Chowan Herald, April 6, 2021 – By Nicole Bowman-Layton Editor
Chowan county schools, Superintendent Michael Sasscer
As recent as 2008, the headlines for Chowan County were “Chowan’s woes just keep expanding” where then the depth of negligence by county leaders became public knowledge. This resulted in an emergency property-tax increase of 9 cents and made 10 percent across-the-board cuts in services to avert a state takeover of county government. Chowan county residents started receiving supplemental tax bills shortly thereafter.
While the county commissioners have worked hard to maintain good fiscal controls, now is not a time to relax their focus and willingly accept breaking their self-appointed debt load.
As has been said, elections have consequences, so does taking on massive debt.
