Tuesday, March 5, 2024

‘Building to catch up’: Pender’s proposed multi-million school bond will alleviate overcrowding, increase taxes

Six of Pender County Schools are over capacity, with more nearing capacity. A proposed $178-millon school bond would help alleviate the congestion by building two new schools and improving or expanding others. (Port City Daily/File)

PENDER COUNTY — While Pender County taxpayers might rejoice in the county commissioners’ decision to not increase taxes in the next fiscal year, that doesn’t mean they won’t face a financial obligation in the near future.

The Pender County Board of Commissioners officially gave the greenlight at Monday’s meeting to proceed with a school bond referendum on the November ballot. The proposed bond could increase tax rates in the county by a minimum of 9 cents and a maximum of 26 cents, if approved this fall.

Residents have seven days to submit in writing any opposition to the referendum.

READ MORE: Pender County Schools requests $178M bond referendum on November ballot

Pender County Schools formally requested the county add a proposed $178-million school bond referendum at last month’s commissioner meeting but has been discussing the need since March. The funds would cover much-needed capital projects, as the county faces overcrowding of schools and accelerated growth.

In the county’s approved 2022-2023 budget, there is no tax rate increase. County manager Chad McEwen explained while the county could have benefited from one, due to proposed projects in the pipeline, he didn’t want to jeopardize the school bond.

“I didn’t feel that to be fair to the board of education coming on the heels of the school bond, with an understanding: If the bond is approved, taxes will go up to pay it,” he said. “I didn’t want to do that twice.”

A total of $39.6 million has been appropriated to Pender County Schools within the new budget for operating expenses, capital outlay, debt services, a reserve contribution and for school resource officers.

“We’ve identified the education of our children as our number one priority and backed that up in our budget allocation,” Chair David Piepmeyer said at Monday’s meeting. “I think that’s the right place to put our money.”

There have been discussions in recent years about the congestion within Pender County Schools, with a current population of more than 10,500 students. Six schools are over capacity, totaling 445 students more than they are outfitted for, and others are near capacity, according to Hill. To help alleviate the future impact to an already overpopulated district, PCS will construct two new schools, as well as make needed improvements or expansions to a handful of others.

Dr. Jerome McKibben, with McKibben Demographics out of South Carolina, and Superintendent Dr. Steven Hill clarified the schools are in desperate need to add more classrooms to the overall system.

Based on McKibben’s research and analysis of the county’s demographics, the schools currently over capacity are all located along U.S. 17. Hill referred to PCS’ current state of affairs as “triage mode.”

“Based on everything we’re seeing as far as growth, it’s essential we have this conversation,” he added.

McKibben noted at the meeting, currently, 450 homes are for sale in Pender County and 10,000 have been sold in the last three years. Eighty percent of the housing market is existing home sales, which doesn’t account for the thousands slated for development in the next few years.

“The point I need to reiterate when going forward with this building plan is: It’s not so much for future growth, but we’re building to catch up,” McKibben said. “The [kids] are already here.”

A wave of pre-school to middle-school aged kids have entered the system in the last five years, indicating schools will continue to be over capacity if more schools are not built. Hill said right now, 60 students are on the pre-K waitlist and he anticipates receiving up to 100 more applications.

“If they stop building new homes in the county today, and for the next five years, 80% of the forecasted enrollment growth will still take place,” Kidman told commissioners.

The $178-million bond would cover seven proposed projects across the county, including a new 800-student K-5 elementary school and a 1,200-student 6-8 school for $111.6 million combined. Additional plans involve a new eight-bay maintenance garage, renovations to Topsail Middle, Rocky Point Elementary and Burgaw Middle, and improvements to the central services buildings.

The county has been working for the last two years to secure land to construct the new schools, which will be on the same campus. While the location has not yet been announced, the board assured it will be in proximity to areas in most need. 

PCS spokesperson Bob Fankboner told Port City Daily last month, the area between Rocky Point and Hampstead has been identified as the most strategic choice.

The county is estimating the impact to be between 5 and 11 cents per $100 to taxpayers. Yet, the minimum and maximum tax rate could reach 9 and 26 cents, respectively.

“When we sell these bonds, everyone needs to understand, they have to be paid back,” Piepmeyer confirmed. “The taxpayers pay it back through their taxes, and the terms and conditions of those sales will determine the impact to the tax rate.”

Sanford Holshouser attorney Robert Jessup, contracted by the county to assist with the bond process, told the commission the county can borrow up to $100 million without any impact on the current tax rate: 64.5 cents per $100. It will stay the same only if interest rates and other conditions remain unchanged. Piepmeyer said the county has a strong bond rating and is in good financial standing.

Just because the county has a healthy fund balance does not mean there’s money to blow. Retaining a secure financial reserve is crucial to demonstrate to the Local Government Commission — the state entity that provides financial oversight to local governments — the county’s ability to pay back funds. The LGC must approve any bonds before they are issued.

“Just like when you buy a house or make a major purchase, the bank wants to know we have some property or assets and are able to demonstrate the ability to pay back the money,” Piepemeyer added. “By us having the favorable financial position we currently enjoy, that puts us in a favorable position to be able to go and ask for money.”

Three of five new commissioners will be sworn in following November’s election, with only commissioners Jackie Newton and Fred McCoy remaining. Therefore a fresh majority will make future decisions about how the school bond is repaid.

The board is planning to borrow money in phases and stagger debt payments to reduce the strain on the residents, rather than taking it out in one lump sum.

Newton said once the public votes on the bond referendum, there will likely still be a delineation between “have-to haves” and “would-like-to haves.”

However, there will still be some cost to taxpayers, as McCoy reminded the money “is not going to come out of the sky.”

“Someone’s got to pay for it,” he said. “But we gotta support our children.”

The county plans to issue initial project funds for PCS’ needs from its general fund, or school capital reserve fund, and then reimburse itself.

The public can submit comments for or against the bond by June 13 to the county commission at 805 S. Walker St, Burgaw NC 28415 and the North Carolina Local Government Commission, attn: Secretary of the Commission, 3200 Atlantic Ave. Longleaf Building, Raleigh NC 27604.

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