City, schools talk money

Published 9:25 pm Thursday, March 2, 2017

The City Council and School Board talked about the school budget, a new operations facility and energy-saving upgrades during a joint meeting on Wednesday.

The School Board made its case for full funding of its budget, which includes a request for an additional $2 million in local help.

Now that final numbers have been presented from the state, a proposed 1-percent cost-of-living increase for school system employees has morphed into an average 2.4-percent raise, school officials said.

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Higher adjustments will be made at the bottom of the teacher scale to aid recruitment efforts, school system Finance Director Wendy Forsman said.

“It made it very difficult for us to recruit” in prior years, she said of cost-cutting measures that have affected teacher pay in Suffolk.

Forsman said there is a minimum of a 1.4 percent increase. The proposed budget includes a 14-percent raise for the superintendent’s position, from $177,043 to $202,000.

“I am a supporter of teachers and teacher raises,” School Board member David Mitnick said during the meeting, repeating his concern about vacancies in teaching positions. “I hope that you will give consideration to the budget request that will come before you.”

The group also discussed the school system’s request for an operations facility, proposed to be located at the former Mount Zion Elementary School on Pruden Boulevard.

The building would provide space for food services, textbook storage, the print shop, archive records, information technology and more.

“It allows us to get all of our non-instructional departments with the exception of transportation into one building,” school Director of Facilities and Planning Terry Napier said.

The plan would also eliminate the current need for a lease used for the print shop and allow the school system to buy in higher quantities to get supply costs down, Napier said.

The original plan was to refurbish the building to suit the purpose, but more investigation has revealed that demolishing the school and placing a pre-fabricated metal building with a brick façade on the site may be the way to go. The first phase of work could be completed with the $4 million currently in the city’s capital improvements plan, with a final cost of about $14 million with site work needed in the second phase.

“We are very excited about it,” said Napier, adding it would end up about $2.5 million to $3 million cheaper. “This is a much better option for us.”

City Council members also praised the idea.

“I think it’s a real win,” Mayor Linda T. Johnson said.

The groups also discussed funding for a group of energy-saving upgrades recommended for the school system through the energy performance contracting process. The state-approved process allows government entities to contract with any of several state-approved contractors to make energy-saving upgrades to items such as HVAC systems, lighting and water appliances. The company guarantees the energy savings will pay for the debt service on the upgrades, and if it doesn’t, the company writes a check for the difference.

The problem lies in whose name the debt would be in, should the project take place.

City financial adviser David Rose of Davenport and Company recommended that the School Board be the borrower of the money, with the moral obligation of the city.

However, he said there are concerns about how the moral obligation would affect the city’s debt policies and credit rating.

“We want to make sure we do no harm to those ratings,” he said.

In addition, even half of the recommended $17 million worth of projects would bring the city too close to having a debt amount equal to or greater than 10 percent of its general government expenditures.

Councilman Mike Duman said he is “miffed” the rating agencies wouldn’t take into account the debt is incurred through an energy performance contract and therefore is guaranteed to be paid back with savings.

City Manager Patrick Roberts said he and Whitney will work together to determint the next steps.

“There is no magic solution,” he said.