Wake County leaders have less than two months to decide whether to ask voters to approve a school construction bond referendum this year or to wait until the next earliest possible date in 2018.
County finance staff on Wednesday presented potential scenarios involving having a November 2016 school construction bond referendum to cover the next four years or to have the Wake County Board of Commissioners borrow enough money until a school bond is placed on the May 2018 ballot.
The final decision on the timing of the bond referendum rests with commissioners, but the school board will have its say. If a decision is made for a 2016 referendum, the school board has until June 7 to pass a resolution asking commissioners to issue bonds for school projects.
“I want to see the green,” school board member Bill Fletcher said at Wednesday’s facilities committee meeting. “That’s all I’m concerned about. They can fund it any way they want to.”
The last Wake school bond referendum of $810 million was approved by voters in October 2013, with the next one projected to be in October 2017. But that’s no longer an option because a 2014 state law forces Wake to only hold a countywide referendum when all the polling places are open in even-numbered years.
School facilities staff have identified $1.4 billion in needs over the next four years to keep up with 32,000 new students that are projected to arrive by 2025 and to address a backlog of renovation needs. School staff are working on different scenarios ranging from $855 million to $1.4 billion.
Under one scenario presented Wednesday that county staff said was strictly just a model, an $852 million school bond referendum could be put on the November ballot. The county could provide $155 million in cash to fund a $1 billion school building program that would cover school needs until another school bond vote in May 2020.
The question is ... not if we’re going to build, it’s what’s the financing mechanism?
Deputy Wake County Manager Johnna Rogers
Under the second option, commissioners could issue limited obligation bonds, a type of borrowing that doesn’t require voter approval, but generally costs more because of higher interest rates being charged. Those bonds would fund school projects until a potential May 2018 bond referendum.
Under both scenarios, the school system would get the same amount of $414 million over the next two years. Deputy County Manager Johnna Rogers said the property tax increase of 4.5 cents would be the same in both options, with only the timing of when it’s issued being different.
Rogers said that the county is statutorily required to fund school construction so, no matter what happens, schools will have to be built to keep up with growth.
“Even if you had a ballot vote that failed, the question is not are you approving a plan,” Rogers told the school board. “The question is can the county use the cheapest source of financing. It’s not if we’re going to build, it’s what’s the financing mechanism?”
School board member Susan Evans said she expects a lot of questions to be answered when both boards hold a joint meeting April 26. In the meantime, the school board is continuing to work on the list of projects to include in the next building program.
“We’ll just have what we absolutely feel is necessary, say in the next three years, in terms of the dollars that we need,” Evans said in an interview. “My opinion is it’s up to the county to determine how they can fund that. That’s not really our responsibility.”