A new Lincoln County Commission will face a big challenge early on as they consider a $32.2 million bond issue to fund the county school system’s planned new elementary school at Blanche, an addition to accommodate ninth graders at the high school and the required sharing of bond proceeds with Fayetteville City Schools.
County budgeters received cost projections Tuesday evening – the proposed new elementary school, which would serve Blanche area students, will cost an estimated $17.6 million while an addition at Lincoln County High School, to serve ninth graders, will cost an estimated $5.7 million. Coupled with that is an additional $8.6 million that would go to city schools in accordance with state law.
Altogether, the $32.2 million bond issue could mean another 19 cents on the county’s current property tax rate.
After a lengthy review of options during Tuesday’s meeting, budgeters decided to send the projections, along with how the bonds would impact the county’s 151 debit service fund, forward to the full County Commission this month but only for informational purposes. The expectation is that every commissioner would be asked to attend the budget committee’s October session for a thorough review.
With interest rates and construction costs rising, delaying the projects would likely result in much higher costs if commissioners wait three or four years when the county’s current debt obligations substantially lessen.
Projections for the issuance of general obligation school bonds reviewed Tuesday are based on an interest rate of approximately 3.5 percent over 25 years.
Ashley McAnulty of Stephens, Inc., out of Nashville, who had been asked to evaluate the county’s capacity and its debt service fund, said the county is in good financial standing currently, noting that is currently rated by Moody’s as AA3.
Since there is a school system in the City of Fayetteville, where city residents also pay county taxes, McAnulty said state law requires the sharing of general obligation school bond revenues, which would result in $8.6 million from the proposed bond issue going to the city school system – “This prevents double taxation,” McAnulty explained.
Figures reviewed by McAnulty showed that additional revenues, equating to 19 additional cents on the county’s property tax rate, would be needed to fund the proposed bond issue – “The current tax rate is not sufficient,” he said. “I wouldn’t recommend taking on this debt at the current tax rate.”
In 2022, the county’s cost of debt service is projected to decrease to $587,917 – that compares to $2.6 million this year, $2.5 million in 2019, $2 million in 2020, and $1.5 million in 2021.
But whether the proposed new school in Blanche could wait until then is unlikely, at least not without considerable expenditures at the existing Blanche School to tide it over. The most pressing currently is the need for a new roof over a portion of the building, and just that would cost an estimated $5 million, said Ricky Bryant, a county commissioner who also serves on the budget committee and works as supervisor of maintenance for the county school system.
With nine new commissioners seated on the County Commission after August elections, budgeters felt delaying a vote on the bond issue until October would provide them as well as other commissioners a greater opportunity to become educated about the issue.
Concerned about the financial challenges of the building program, County Mayor Bill Newman noted the county will lose $440,000 in personal property tax revenues if Daikin’s Goodman plant here closes as anticipated.