Council, board discuss CIP priorities

Published 6:36 pm Friday, December 3, 2021

While School Board members were pleased with a John F. Kennedy Middle School replacement being the highest priority among the school division’s capital improvement projects, several, including board chairwoman Dr. Judith Brooks-Buck, asked that money also be found for improvements to Northern Shores Elementary School.

The board and City Council met together at City Hall during council’s Dec. 1 work session, in which City Manager Al Moor outlined his draft capital improvement program and plan.

In the proposal Moor presented during the work session, John F. Kennedy Middle would get $7.5 million for fiscal year 2023, which begins July 1, 2022. The next two years, it would receive $22 million and $20.5 million, respectively.

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Other items outlined in the CIP for the school division for fiscal year 2023 include $6.5 million for the human resources building renovation, nearly $2.5 million for the College and Career Academy at Pruden and nearly $1.1 million for major systems repairs and replacement.

Moor said the city reduced the repairs and replacement allocation by about $2 million in each of the first two years of the CIP before maintaining future years at $3.575 million per year after that.

However, an addition for Northern Shores Elementary, identified as a priority in the board’s approved CIP, does not receive any funding in the city’s proposed CIP until fiscal year 2026, when $1.5 million is proposed. The city’s proposal calls for another $11.7 million in funding for Northern Shores in later years.

“Trying to do both the Northern Shores Elementary addition and the JFK at one time was difficult as we layered it in against the city’s program,” Moor said, “so we tried to get the engineering started, and we have the construction … two years out. Now I know this is not in line with what was proposed, but again, we’re trying to work this in as proactively as we can.”

The board’s CIP has $7.6 million for Northern Shores in both fiscal years 2023 and 2024.

Gordon said the delay in funding for Northern Shores is “a major concern that we know is going to be a huge point of trepidation for the school system.” He reiterated his commitment to continuing to work with Moor and the city’s team and get feedback from the board on ways the Northern Shores project can get moved up while keeping any changes as budget-neutral as possible for City Council.

“We believe that this Northern Shores Elementary addition, not only was it a priority for the School Board in this year’s CIP as well as last year’s CIP,” Gordon said, “I also know from communication I’ve had with Mr. Moor’s team, council members, School Board members, and really the Northern Shores community, that that project has been discussed for a very long time.”

Moor said the city is in a good position to borrow up to $30 million per year and has a AAA bond rating that it wants to preserve. Over the next five years, the city is expected to borrow between $29.5 million and $29.99 million per year.

Gordon said that while the division understands the $30 million threshold and expressed thanks for the city dipping into its cash reserves to preserve its AAA bond rating, “we believe that if we put our heads together and collaborate, that we can find a strategy to move that project up.”

He said the $15 million cost for the Northern Shores Elementary addition is in today’s dollars, and with a 10% to 13% projected increase in costs due to inflation, it’ll increase the cost of the project by $7 million to $8 million.

“We think that to be fiscally responsible, trying to find a strategy to be able to move that up is what we need to do,” Gordon said.

The board also approved its CIP with $5.5 million for an operations facility.

Gordon said the division would look to cover as many of its preventive maintenance expenses as possible. Asked about the possibility of using CARES Act or Elementary and Secondary School Relief Fund money, he noted that rules for school divisions to use that money are different from what they would be for the city. The school division cannot use the money for raises or bonuses, technology infrastructure, hiring new staff, repairs to schools not linked to quality, furniture and fixtures, equipment replacement, maintenance on buildings and grounds and capital improvements. He noted that the federal relief money it has received must be spent on a certain timetable — CARES Act I by Sept. 30, 2022, CARES Act II by Sept. 2023 and CARES Act III by Sept. 2024 — and that much of the money has to be used to address learning loss. He noted programs the division has put in place to address learning loss, such as tutoring before and after school and SPS Saturday Academy.

Brooks-Buck said this is an opportunity for both the board and council to work together. She said the council has seen the conditions of some of its schools, especially John F. Kennedy and Northern Shores.

“If we take this opportunity to put our monies together and put our heads together, I believe we can do a lot more than we’ve done,” Brooks-Buck said. “And we’ve just got to figure out a way to work it out.”

She said the division has met challenges to improve the performance of its schools and make them outstanding, in particular noting the recent national recognition of Northern Shores as a Blue Ribbon School.

Moor said the city calculated a $50 million price tag for the middle school based on a new elementary school built recently in Isle of Wight County, higher than what the board submitted in the CIP it approved in September. He said that school, modeled after Florence Bowser Elementary, cost $36.8 million. Moor said the city then added the cost for furniture, fixtures and equipment to it, added contingency and other funding, which totaled about $48 million before the city rounded up the cost to $50 million.

“We feel this is a really solid number based on the way we approached it,” Moor said.

The board, however, approved $56.4 million in the CIP it submitted to the city for John F. Kennedy Middle.

“Inflation is very high right now,” Gordon said. “And any things that occur, if there’s any delay on any projects, we’re looking at anywhere between a 10% and 13% increase. So if we can move efficiently with the $50 million — we’re hoping and believing we may be able to make it work.”

Gordon said the $56.4 million amount the school division came up with for replacing John F. Kennedy was derived from feedback it had received from several architectural firms and the increasing cost of steel. He said the quicker the division can start on the project, the better the chance of keeping it at $50 million.

In the first year of the school division’s CIP as proposed by the city, it has allocated nearly $17.6 million. Only the first year’s allocations are guaranteed and budgeted once council approves the CIP.

“We’re trying to move ahead and get some of your greatest needs under way and try to layer it in in a way that we also complete some of the city’s needs,” Moor said.

Moor said he and Gordon have met and spoken on the phone several times during the CIP process, and he expressed the desire to “solidify everything” in time for it to go to the Planning Commission at its Dec. 21 meeting.

Gordon thanked Moor for his “collaboration and transparency” in working through the school division’s CIP needs. He said after conversations with Brooks-Buck, his budget and finance team, Director of Facilities and Planning Terry Napier and, after meeting with the Planning Commission, “we are very, very thankful and happy to see John F. Kennedy being placed with immediate design work starting next year, and also thankful that the city has decided to dip into the cash fund in order to be able to get some projects done. That was a welcome sight to see.”

Gordon, however, said there will need to be further conversations with Moor and the city about several areas in its proposed CIP.

The superintendent said the nearly $2.5 million allocated to CCAP in fiscal 2023 should return to the major systems repairs and replacement. It would be a budget-neutral adjustment, he said.

“From the governor’s office, we have to have a 100% match next year,” Gordon said. “So we want to try to be able to make any adjustments that are actually going to be budget neutral to what Mr. Moor has proposed in his draft of the CIP. And this will mean that we will have to push out some aspects of that renovation/expansion that we’re looking at at CCAP.”

Some of the CCAP work, Gordon said, can be accomplished using the division’s operating funds, but other work will have to be pushed back due to supply chain demands. “We’re actually 44 weeks out on some of the things we would potentially have to order. But the main thing is the 100% match. It’s something that we need to do.”