Wake County Commssioners weighing whether to let school system save $2.3 million for school site
11/20/2013 9:00 AM
11/19/2013 7:24 PM
Should the Wake County Board of Commissioners cut the school system a $2.3 million break on the price of the land for the new Abbotts Creek Elementary School in North Raleigh?
The original deal that the Wake County school system agreed to in 2010 was to pay $54,000 per acre for land at the former North Wake Landfill off Durant Road. There’s now an agreement to change the deal to a lease of $10 per year that would save the school system money but allow the county to retain ownership of the property.
Commissioners tabled Monday a vote on agreeing to the new contract terms. It’s uncertain whether the vote could impact the school system’s plans for getting the school open in August 2015.
As part of the original inter-local agreement from 2010, the school system agreed to reimburse the county for the money it originally paid for the landfill site. The county paid $54,000 per acre out of its solid waste fund. Land around the landfill now goes for around $150,000 per acre.
The $2.3 million from the school system would go back into the county’s solid waste fund. Or commissioners could move it into the general fund.
County Manager David Cooke said they recently approached the school system about changing the deal from a purchase to a lease. He cited how renegotiating the deal would allow the school system to have more money for other uses such as purchasing more school sites.
Cooke also pointed to how the county has been moving toward trying to get ownership of school sites.
The school system jumped at the opportunity. The school board approved the revision to the inter-local agreement in October with the issue going to the commissioners on Monday for their approval.
Commissioner Tony Gurley asked whether the money could help reduce the solid waste fees that are paid by users. Cooke answered that it could possibly be used to reduce the amount that households pay.
Gurley said that while liked the idea of the county owning the land. he had never anticipated using general revenue funds to supplement the capital plan of the school system. Gurley said they’re already subsidizing the school system by not charging them the current value of the land.
“We’re going above and beyond what the voters authorized us to do to spend money on the schools,” Gurley said.
Gurley questioned how county staff was supporting the lease deal. Cooke answered that they’ve always looked for ways to help school system save money. He cited as an example how they’re leasing the former Thompson School building back to the school system for $1 a year to house the Wake Young Men’s Leadership Academy.
Cooke also noted how the county wants to own school sites to count them as assets.
“It seemed counter intuitive to make them pay for a school site when we essentially from a policy standpoint wanted to own the land so we actually initiated some of that conversation to change the inter-local agreement to more reflect what we’ve been doing over the past couple of years,” Cooke said.
Gurley said that with the passage of the $810 million school bond issue last month that the school system now has plenty of money to reimburse the county.
Gurley called it “irresponsible” to accept the revised agreement before they’ve had the policy discussion about whether to move money out of the solid waste fund to supplement the school system’s capital plan. He said that approving the new deal would create a precedent.
Commissioner James West complained that the commissioners were treating the school system with an us against them mentality.
But Joe Bryan, chairman of the board of commissioners, said they need to have the discussion of whether they can use the $2.3 million from the school system to help reduce the tax increase that will be needed next year because the bond issue passed. He noted how if the school system paid the full $150,000 an acre it would generate more than $6 million for the county.
“As much as I want to continue to expand our ability to build new schools, I can’t forget that adding an extra $2 to 6 million to what we will be facing in our next year’s budget discussion of going to the public and saying ‘You passed an $810 million school bond issue that may raise taxes as much as 5 cents,’” Bryan said. “That we’re now saying let’s expand an already agreed upon agreement that was out there for the public. We’re now expanding by $2 to 6 million that we could have had for all county services.”
County Attorney Scott Warren said that if they make the decision to accept the revised lease agreement they could get credit for it in any potential dispute with the school board about inadequate funding.
Commissioner Paul Coble said he disagreed with West that it’s school vs. county issue. Coble said it’s an internal county issue about how to use its money.
Coble said the school system isn’t being harmed because it had previously agreed to the original deal to repay the county for the land.
Commissioner Caroline Sullivan asked Cooke to restate county staff’s rationale for backing the lease deal.
Cooke restated the county’s desire to own school sites. He added that the solid waste fund is in solid financial shape.
But Cooke added that it’s a valid policy discussion about whether the county wants to take money from an enterprise fund to support something outside the fund. He said this could also effect what happens at the South Wake Landfill where the county is setting aside land there for a school site.
The vote to table the agreement was unanimous.
While West backed tabling the decision, he said the discussion and the adoption of an inter-local agreement asking the school board to give the county school construction authority creates the perception that both boards are at odds with each other instead of working together.
Bryan disagreed, saying that it’s not the commissioners who are trying to change the original deal. But Bryan said he and Phil Matthews, vice chairman of the commissioners, should have realized the policy issues when they were setting the agenda.
Sullivan said they should have the policy discussion soon because the school system wants the issue resolved so it can begin bidding for construction of the school.
But Gurley countered that the school board can start the bidding process now if it sticks to the original deal.
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