Charleston County school building program to face temporary cash-flow problem
The prospect of delaying construction on the new Chicora School of Communications building didn’t sit well with parent Kenneth Settles.
The following are the construction projects that Charleston County school leaders suggested potentially postponing to solve a temporary cash-flow shortfall that will happen in 2015.
Option 1: Chicora School of Communications and North Charleston Creative Arts Elementary delayed six months, and Emergency Operations Center, Murray-LaSaine Elementary, Angel Oak Elementary and James Island Charter High deferred 12 months. Would generate $3.3 million cushion.
Option 2: Laing Middle deferred 12 months. Would generate $6.9 million cushion.
Option 3: Chicora School of Communications and Angel Oak Elementary delayed 12 months. Would generate $1.6 million cushion.
Source: Charleston County School District
The school building where his seven children spent their elementary years has dealt with everything from mold to floods to rodents, he said.
“The kids in this community always seem to be put on the back burner,” he said. “It’s time they get something.”
Chicora is one of seven building projects that potentially could be delayed because of a cash-flow problem. The 2010-16 capital budget for Charleston County School District is funded by a 1 percent sales tax hikethat voters approved in 2010.
The sales tax will generate enough money to cover the bulk of its planned construction, but officials are projecting their expenses will outpace the money raised by the tax within two years.
District leaders have been trying to figure out how to cover that $16.8 million temporary cash flow gap, and they told the board last week that one option could be pushing back the timeline for planned projects. In addition to Chicora Elementary, other possibilities presented included: North Charleston Creative Arts Elementary, Murray-LaSaine Elementary, Angel Oak Elementary, James Island Charter High, Laing Middle or an emergency operations center for the district.
“Perhaps in three months, we’ll find a solution,” said Mike Bobby, the district’s chief of finance, operations and human resources, told the board. “Right now, we don’t have another solution.”
Charleston school leaders are monitoring the revenue generated by the six-year sales tax. The length of the recession, as well as initial difficulty collecting the tax revenue, caused the district to fall short of its original revenue projections, and the district based the timeline for construction in part on when that money would be available.
Construction costs are expected to exceed available funds in December 2014, when the district also will have maximized its constitutionally limited ability to borrow funds. The cash-flow problem will last from then through December 2015.
Bobby said the board will be asked to make a decision in September or October about how to handle the situation.
“Those decisions can’t wait until the last minute to make them,” he said. “We have two or three months to let it settle and think through the ramifications.”
After hearing the news, board members made it clear they didn’t want to postpone building.
“We’re looking for creative solutions on how to do this,” said board member Chris Fraser, who is president of a commercial real estate brokerage firm. “We’re going to work through it.”
That might mean cobbling together funds from a couple of sources, or delaying maintenance or other purchases, he said. The board doesn’t want to push any project back, Fraser said.
Funding construction with sales tax meant the school district had to project how much would be raised and when it would receive the money.
The district projected the tax could raise anywhere from $435 million to $483 million. Collections are on track to reach $440 million for the life of the six-year tax. The district has collected $148 million through May 2013.
That means the district will not be able to do some construction work that had been proposed. The district deliberately created a longer list of projects in case it received more collections than anticipated, so this shouldn’t be a surprise, Bobby said.
“We knew we would not satisfy every project on the list,” he said.
The district won’t have enough money to do seismic evaluations of six schools, including West Ashley middle schools and Garrett Academy, or the advanced design for Dunston Elementary. It also will lack funding to do improvements to athletic facilities, such as improving downtown Stoney Field or adding state-of-the-art weight rooms and equipment storage facilities.
Bill Lewis, the district’s chief operating officer who oversees its school construction projects, said he’s trying to see what can be done on those projects without funding. For example, he said the district might be able to forgo seismic evaluations and instead simply rebuild or renovate those schools in a future building program, and the district has been meeting with local officials about Stoney Field.
Other projects, such as obtaining land in Carolina Bay in West Ashley or in Ingleside in North Charleston, happened without money exchanging hands, he said.
“We’re still trying to position the district for the next building program,” he said.
Educators, students and parents, such as Settles, are eagerly waiting for the new school buildings to come online, and any delay likely would be met with resistance.
The former school building Chicora School of Communications was in such bad shape that the school relocated in the middle of the 2011-12 school year to a temporary site.
Settles said students deserve a new building. He hears children, including his fifth-grade daughter, getting excited about the new school, and putting them on hold another year wouldn’t be right.
“They’ve waited long enough,” he said. “If anything, it should be finished sooner.”
Reach Diette Courrégé Casey at @Diette on Twitter or 937-5546.