By: Michael Campbell | Twitter: @itsthesoup
Posted: March 17, 2019 | 12:30 p.m.
PRINCE GEORGE – Just over two weeks after Prince George County Administrator Percy Ashcraft’s proposed budget featured no tax increases and no mention of funding for a new elementary school, the school division’s top leadership are hopeful funding can be found to, at least, get preliminary work started on what would likely be a replacement for either Walton or Beazley Elementary School.
On Feb. 26, Ashcraft presented a budget that maintained the county’s real estate tax rate at 86 cents per $100 of assessed value and did not earmark any funding for the construction of a new elementary school, which has been discussed by the county and school division since August of 2017. When asked, Ashcraft said he was directed by the Prince George Board of Supervisors to not include the school in his proposed budget.”
“I was directed by the Board, as there was no decision on the location, to not include it in the proposed budget until whenever the two boards can decide where it goes and how much it is going to cost,” he explained.
In the audience for the Ashcraft’s budget presentation on behalf of the school division were Renee Williams, superintendent, school board member Chris Johnson, and finance director Monique Barnes, all of whom were closely listening to the county administrator’s budget that saw the elementary school absent from the proposed 2020 Fiscal Year budget.
When asked following the presentation, the school division’s leadership said they were “hopeful” funding for the early stages of the school’s construction can be found in other areas while keeping the tax rate level going into this upcoming fiscal year.
“The funding necessary for the first year of the planning and construction process for the new elementary school is much less than in the second and third year of construction with anticipated costs for the first year ranging from $2 million to $3 million, depending on the acceleration of the schedule,” Prince George County Public Schools Assistant Superintendent Dr. Lisa Pennycuff said. “The schedule for building the new school would include time for site acquisition, design, bidding, and construction.”
She continued, “The school division is hopeful that the Board of Supervisors believes that the first year of this process can be initiated with funding from the County fund balance. This will allow Prince George County Public Schools to begin the construction process, and the board of supervisors could avoid a tax increase for the community related to this construction until the second year of the elementary school building process.”
Going back to February of 2018, Ashcraft’s then-proposed budget requested a five-cent increase to the county’s real estate tax rate in an effort to generate the funds needed to help pay for the, at that time, estimated $30 million the school was expected to cost. That tax increase was eventually deferred by supervisors prior to the budget’s adoption, with Prince George School Board Chairman Robert Cox telling county leaders that the increase wouldn’t be needed as significant spending on the project wouldn’t occur during this coming fiscal year.
Since that time, the estimated cost of the school and the tax impacts continues to rise as, according to the latest runs from the county’s financial consultants, in order to fund a school that is now estimated to cost closer to $34 million, a real estate tax rate increase of roughly eight cents would be required to provide the revenue needed for the large capital project.
When it comes to the school division’s idea of the county utilizing their fund balance to help pay for the first year of the project, it is something Prince George Board of Supervisors Chairman Donald Hunter said the board would be willing to discuss.
“I think that is something that is possible,” he remarked. “We said we would be willing to help them get started and, whatever amount of the fund balance we would spend, we would repay ourselves once we borrowed the money and, this would be a board decision, not something that one person could do.”
According to county finance director Betsy Drewry, the county’s estimated uncommitted fund balance for the upcoming fiscal year is approximately $18 million, with that number varying based on revenues and expenditures. In any case, that $18 million represents 15.4 percent of the county’s FY2020 expenditures, which is above the county’s fund balance policy requirement of 12.5 percent, but in line with the Board’s target of 15 percent.
Should $3 million be spent toward school construction, it would bring the county’s fund balance down to roughly 12.8 percent, just above their fund balance policy requirements. Drewry did note, similar to what Chairman Hunter said, the county could issue a reimbursement resolution and, once the funds are borrowed for the project, the county would reimburse itself the $3 million or whatever amount is utilized toward school construction to themselves, thus making it a “temporary use of cash reserves until the borrowing is complete.”
While the idea of using fund balance to help get the school’s construction started would if executed, serve to avoid a rate increase on county taxpayers, beyond that, going in the 2021 fiscal year, questions would have to be answered about how much of a tax increase would be needed to make the school become a reality.
What has been confirmed over the course of the county and school division’s discussions about the elementary school proposal is the need to revise the joint memorandum of understanding between the county and PGCPS, which lays out the percentage of specific revenue sources the school division is entitled to as part of its local funding at the county.
Currently, the school division receives roughly 43 cents of every dollar of those revenue sources, including real property tax. Based on the currently adopted MOU, county finance staff have stated publicly that any tax increase would have to be doubled for the county to feel the financial benefits of said increase to help pay for the school.
To that end, midway through 2018, the county approved a draft MOU that adds language to make tax increase proceeds that are used for school capital or public safety-related projects exempt from the requirements of the MOU that would send some of those dollars to the school divisions.
According to the county, that draft agreement was sent to the school division for consideration and their feedback. which was provided back to the county in late January. While the school division’s edited version features much of the same language as the county’s draft, PGCPS suggested some adjustments to how that percentage of revenue streams is calculated, noting that the county’s prison population should not be included as part of the overall county population when calculating that percentage.
When asked, Ashcraft said the proposed changes from the school division to the MOU won’t be discussed as part of the FY2020 budget, noting those will be entertained during for the following fiscal year in FY2021. Hunter and Ashcraft confirmed the county is using the structure of the county’s draft MOU as the guidepost for this budget’s construction.
“This is what we are going by at this point because we haven’t had conversations to actually come up with a joint MOU,” Hunter said.
In order for the project to move forward, a decision on where the school will go will have to be settled between the two boards as the county remains in favor of using a site along Middle Road near the Interstate 295 overpass for a new school, while the school board remains adamant that they will not move Walton, the school deemed in most need of replacement, to that facility due to its distance from its current location and increased travel times, among other reasons.
As recently as last month, School Board Chairman Cox said they agree the Middle Road site is ideal for Beazley Elementary School but, when asked if the board would entertain moving Walton’s students to Beazley, perhaps with some renovations, and shifting Beazley’s population into the new school, Cox said that option is not on the table, reiterating a 2017 report that said Walton was beyond its useful life and in need of replacement first.
For the school division, they are remaining optimistic a middle ground can be found when it comes to building a new school in the county.
“The Prince George County School Board and division administration remain hopeful that we will be able to reach an agreement with the Board of Supervisors over a site and begin the building process soon,” Dr. Pennycuff said.