County's plan means school fix-up can continue

Catawba County's four-year building cycle for schools is paying dividends at Hickory High.

It's a simple, innovative plan, but the Hickory High renovation saga has several twists and turns.

The four-year cycle

In 2003, county commissioners adopted a plan to fund improvements four years at a time for the three public school systems and Catawba Valley Community College.

The funding period overlaps the property tax revaluation cycle.

The commissioners did that so the portion of the tax rate applied to school capital projects won't change, explained Rodney Miller, the county's finance director.

The three public school systems and the college meet to hash out their top construction priorities for each cycle.

The county takes the list and formulates a plan using projected revenue from the property tax rate and other sources.

The current cycle began in fiscal 2007-08, thus, this is the third year.

The commissioners set aside 2 cents of the property tax rate to finance school construction in the current cycle.

The HHS project

Renovation at Hickory High includes replacing air conditioning and heating units; installing new ceilings, lights and electrical systems; removing asbestos; and replacing the roof.

Bids were let in August 2008. The total, with a contingency amount included for unexpected expenses, was $7.6 million.

The amount exceeded the county's desired spending limit. So parts of the project totaling $2.2 million were placed in the next four-year cycle unless the county found another source of revenue.

New revenue

Last summer, Hickory Public Schools received $2 million in construction bonds from the American Recovery and Reinvestment Act.

The Hickory Board of Education asked that the Hickory High project be completed. The commissioners agreed.

However, the bonds from the federal stimulus grant could not be issued until this spring after bids for projects at H.M. Arndt and County Home middle schools were done.

Indebtedness is a factor in how much construction can be financed at one time.

In November, the Hickory school board transferred the bonds to Newton-Conover Public Schools so Catawba County could take advantage of reduced borrowing costs with the federal bonds.

Doing so saved the county about $700,000 in interest.

Results of savings

The deal between the two school systems enabled Catawba County to revisit the Hickory High project.

Hickory Construction, the company doing the work at HHS, agreed to rebid the remainder of the project, a move that resulted in more savings to the county.

An unexpected discovery of more asbestos at the high school added to the final tab, but not enough to push the project over the funding limit.

The cost of completion is now under $2 million.

Moving money

Taking advantage of the savings without unbalancing the four-year cycle reveals a unique factor in the concept.

The county can take $1.9 million from the next cycle that begins in budget year 2011-12 and apply it now.

That means Hickory Public Schools' construction money will be reduced by $1.9 million. However, the HHS renovation is the Hickory school board's top priority, and the board had included completion of the project in its recommendation for the next cycle.

Everybody thinks it's a good deal. Hickory, Newton-Conover and Catawba County schools are on board, the N.C. Department of Public Instruction approves, and Miller says the components for financing are in place.

Support for the deal

"We can borrow more cheaply by doing this now," Miller said.

"Future bids won't be as attractive, and we're not planning for a tax increase," he said. "We look at costs and debt service," said Commission Chairwoman Kitty Barnes.
"We look at the best way to go forward. We have been able to get more for our dollar."

Moving the money forward, she said, means substantial savings.

Some counties in North Carolina abandoned building programs because the money ran out. Catawba County's projects, such as the one at Hickory High, are on schedule.

Barnes said finishing the renovation at the high school will help meet new energy standards, too.

"We're glad to work with the school system," said Aaron Beam, Hickory High project manager for Hickory Construction.

He's the company's building division manager.

Beam said another gain is that Hickory Construction won't have to pull personnel and equipment off the site and then move it back again a couple of years in the future.

Miller agrees.

"Continuity is a plus," he said.

It's also about jobs

Miller, Barnes and Beam emphasized the HHS project's effect on jobs.

"One of the things we want to do is help create jobs," Barnes said. "Continuing the work at Hickory High keeps our people working."

"They can keep on working," echoed Miller. "Hickory Construction doesn't have to vacate the job site. Being able to rebid means only a change order is involved. And we save money."

"Of course, we're glad we can keep working," Beam said.

"Ninety percent of our subcontractors are local. They're from Catawba County and our neighboring counties.

"We're proud of that."

Final note

The county commissioners have the $1.9 million deal before them Tuesday for approval. They have examined the staff's recommendation to proceed and have been in on the process from the beginning.

The plan also will be discussed at a subcommittee meeting Monday.

Barnes would not predict the outcome of the vote, but she said there is support for finishing the project.

Everything is in place to proceed: specifications, the crew and the money.

"We've been talking about how to do this since September," Miller said.