WOODSTOCK — Shenandoah County supervisors will proceed with their plan to borrow up to $6 million to address pressing capital improvement needs this fiscal year.
This comes as the school division recently identified nearly $2.3 million worth of such projects that can be paid for with federal funds.
The Shenandoah County School Board on Sept. 9 approved the addition of $9.8 million to its budget in federal funding including the CARES and American Rescue Plan acts. The school division, which listed $4,225,465 in “urgent” and “necessary” capital projects for fiscal year 2022, determined it can use $2,272,992 of those federal funds to pay for capital projects relating to HVAC needs and school bus replacements. That leaves $1,952,473 in projects that can’t be paid using the federal funds.
That knowledge gave county supervisors a couple of options as the county seeks to soon close on a loan to fund this fiscal year’s capital improvement plan. At the school division’s request, the supervisors ultimately decided during a meeting last week to borrow up to $6 million as planned rather than a loan of up to $3.6 million.
Supervisors justified the decision by noting that sticking with a $6 million loan — which a request for proposal indicated the county could obtain for a low fixed interest rate of 1.315% over 10 years — allows the county to use $2.7 million no longer needed for school projects this fiscal year to get a head start on future projects the school division deems urgent for fiscal year 2023.
Information that County Administrator Evan Vass presented during last week’s meeting indicated the school division has CIP needs totaling $5,989,160 for fiscal year 2023. That figure, which Vass noted was a year old and likely dated, includes fire alarm panel replacements, vestibule renovations at two elementary schools, ADA compliance needs and roof replacement.
A $6 million loan, which supervisors would still need to approve at a future meeting, would result in annual debt services payments of about $610,000 for a decade, Vass said. The county would seek permission from the school division to collateralize the debt with Signal Knob Middle School, which Vass said is valued at approximately $12 million.
During previous budget discussions, county supervisors expressed the desire to only fund general government/school division CIP projects deemed urgent and necessary this fiscal year. In April, the supervisors adopted a budget including a potential $6 million loan for such projects. That included $1,372,785 for general government needs such as equipment and fleet replacement alongside the $4.2 million for school projects.
Supervisors last week noted that sticking with that plan in light of the School Board’s recent findings could potentially save the county money as it looks toward addressing the school division’s future critical CIP needs.
“We made sense out of (borrowing the money) in April when we were sitting at the budget talks,” District 1 Supervisor Josh Stephens said last week. “… Now it seems like the schools are willing to come up with almost $2.3 million to help offset, what do we do with what’s gonna be left? We already budgeted to borrow it. We made sense of doing that back during our budget talks.”
In a prelude to last week’s CIP discussions, District 3 Supervisor Brad Pollack stated during the Board of Supervisors meeting that the $9.8 million in CARES/ARPA funds that Shenandoah County Public Schools received made it “pretty clear” that “funding of the School Board was … never at risk” — an allusion to county budget talks last spring regarding potential school funding cuts.
Supervisors who ultimately voted in mid-April to level-fund schools this year expressed concern about what potential funding cuts would mean for the school division’s eligibility for CARES Act funding.
District 4 Supervisor Karl Roulston called Pollack’s comments last week “inappropriate and incorrect,” saying that supervisors were unaware at the time of the vote of how much federal money the schools would get or how it could be spent.
While the schools had relief funds since April, Shenandoah County Public Schools Superintendent Melody Sheppard told supervisors last week the division “did not know the details that were attached to the CARES funds” at that time.