County asks staff to model $150 million school construction request, will compare scenarios

Chairman Devereux asked staff on May 28 to present alternate debt scenarios after a presentation from DEC and county finance staff on the county's debt-affordability models. The board directed the county to prepare two education-model runs: one that includes the school system's additional $150 million new-construction ask and one without it, so commissioners can compare long-range fiscal impacts.

Why it matters: the school system's request would change the timing and size of future bond issuances and the county's use of its capital-investment fund to smooth property-tax impacts. Commissioners said they wanted both scenarios so they can evaluate whether the county can meet school needs while retaining reserves for county facility maintenance.

DEC and county finance staff described the modeling approach used to size and time debt issuances and PAYGO (cash) projects. Andrew Carter of DEC said the education model assumes level principal for many school financings, which produces higher early-year debt service designed to fall over time. County Manager Greer told commissioners the school system had delivered updated cash-flow estimates the day before; DEC and staff will incorporate those timings before returning with revised models.

Jay Tolan, finance officer for Cumberland County Schools, confirmed the system's priority list and order for new-construction projects: ‘‘E. Smith, JW (elementary), Ferguson Easley, Stedman, and Grays Creek High,’’ and he said site locations for the first two would be the existing campuses. Tolan said the earliest construction activity the schools anticipate would be in 2028, contingent on planning and design work and when cash flow is available: "It's gonna be 2028." (Jay Tolan)

The board also reached consensus on two placeholders for staff to show in the models: a general-government placeholder for county deferred-maintenance on county-owned facilities and a $10 million PAYGO placeholder for Fayetteville Technical Community College's (FTCC) possible match request. Manager Greer said the FTCC placeholder will be removed if the state match does not materialize.

Legal and planning notes: DEC noted that planning-only costs cannot be financed in advance by bond proceeds under Local Government Commission practice; the county will likely need to fund some planning dollars from fund balance or a planning reserve and reimburse those costs later when bonds are issued. Doug Carter of DEC said, "If we issue debt slower, what happens? We have more capacity," emphasizing that timing changes capacity for future issuance.

Next steps: staff will return with two completed education/debt-model scenarios (with and without the $150 million), an updated general-government model that includes a deferred-maintenance placeholder, and a proposed reimbursement approach and timeline for planning funds. The board asked to have school-system leadership available at the next budget meeting to answer outstanding questions about project timing and costs.

Ending: Commissioners did not make any final commitments to adopt additional debt at the session; they asked staff to provide the comparison scenarios so the board can decide after reviewing updated cash flows and model runs.