‘Building to catch up’: Pender’s proposed multi-million school bond will reduce overcrowding and raise taxes

Six of Pender County’s schools are overcapacity, with capacity nearing capacity. A proposed $178 million school bond would help ease congestion by building two new schools and improving or expanding others. (Port City Daily/File)

PENDER COUNTY – While Pender County taxpayers can be pleased with the County Commissioner’s decision not to raise taxes next fiscal year, that doesn’t mean they won’t face a financial obligation in a near future.

The Pender County Board of Commissioners formally gave the go-ahead at Monday’s meeting to hold a school bond referendum in the November ballot. The proposed bond could raise tax rates in the county by a minimum of 9 cents and a maximum of 26 cents, if approved this fall.

Residents have seven days to submit any opposition to the referendum in writing.

READ MORE: Pender County schools seek referendum on $178 million bond in November ballot

Pender County Schools formally asked the county to add a $178 million school bond referendum proposal at last month’s commissioners’ meeting, but have been discussing the need since March. The funds would cover much-needed capital projects as the county faces overcrowding in schools and accelerated growth.

In the county-approved 2022-23 budget, there is no tax rate increase. County Executive Chad McEwen explained that while the county could have benefited, because of the proposed projects in the pipeline, he did not want to jeopardize the school bond.

“I didn’t think it was fair to the board of education that was following the school tie, with an understanding: if the tie is approved, taxes will go up to pay for it,” he said. “I didn’t want to do that twice.”

A total of $39.6 million has been allocated to schools in Pender County under the new budget for operating expenses, capital expenditures, debt service, a reserve contribution and for officers of the school resources.

“We have identified our children’s education as our number one priority and supported it in our budget allocation,” President David Piepmeyer said at Monday’s meeting. “I think this is the right place to put our money.”

There have been discussions in recent years about congestion within schools in Pender County, with a current population of over 10,500 students. Six schools are overcapacity, totaling 445 more students than they are equipped for, and others are close to capacity, according to Hill. To help mitigate the future impact on an already overcrowded district, PCS will build two new schools, as well as make necessary upgrades or expansions to a handful of others.

Dr. Jerome McKibben, with McKibben Demographics in South Carolina, and Superintendent Dr. Steven Hill said schools desperately need to add more classrooms to the overall system.

Based on McKibben’s research and analysis of county demographics, the schools currently overcapacity are all located along US 17. Hill called the current PCS situation “triage mode”.

“Based on everything we’re seeing in terms of growth, it’s critical that we have this conversation,” he added.

McKibben noted at the meeting that currently 450 homes are for sale in Pender County and 10,000 have been sold in the past three years. Eighty percent of the housing market is sales of existing homes, which does not represent the thousands of development projects expected in the coming years.

“The point I need to reiterate as I move forward with this building plan is this: It’s not so much for future growth, but we’re building to catch up,” McKibben said. “The [kids] are already there.

A surge of preschool to middle school children has entered the system over the past five years, indicating that schools will continue to be overcapacity if more schools are not built. Hill said that currently 60 students are on the pre-K waitlist and he expects to receive up to 100 more applications.

“If they stop building new homes in the county today and for the next five years, 80% of the projected enrollment growth will still occur,” Kidman told the commissioners.

The $178 million bond would cover seven proposed projects across the county, including a new 800-student K-5 elementary school and a 1,200-student 6-8 school for a combined $111.6 million. Additional plans involve a new eight-bay maintenance garage, renovations to Topsail Middle, Rocky Point Elementary and Burlaw Middle, and improvements to central services buildings.

The county has been working for two years to secure land to build the new schools. Although the locations have not yet been announced, the council has assured that it will be near areas that need it most.

PCS spokesman Bob Fankboner told the Port City Daily last month that areas between Rocky Point and Hampstead have been identified as the most strategic choices.

The county estimates the impact is between 5 and 11 cents per $100 for ratepayers. However, the minimum and maximum tax rates could reach 9 and 26 cents respectively.

“When we sell these bonds, everyone has to understand, they have to be repaid,” confirmed Piepmeyer. “Taxpayers pay it back through their taxes, and the terms and conditions of those sales will determine the impact on the tax rate.”

Sanford Holshouser attorney Robert Jessup, hired by the county to help with the bond process, told the commission the county could borrow up to $100 million without any impact on the current tax rate: 64 .5 cents per 100 dollars. It will only remain the same if interest rates and other conditions remain unchanged. Piepmeyer said the county has good bond ratings and is in good financial shape.

Just because the county has a healthy fund balance doesn’t mean there’s money to spend. Maintaining a secure financial reserve is crucial to demonstrating to the Local Government Commission — the state entity that provides financial oversight of local governments — the county’s ability to repay funds. The LGC must approve all bonds before they are issued.

“Just like when you buy a house or make a major purchase, the bank wants to know that we have property or assets and are able to demonstrate our ability to repay the money,” Piepemeyer added. “Having the favorable financial situation that we currently enjoy puts us in a favorable position to be able to go and ask for money.”

Three of the five new commissioners will be sworn in after the November election, with only commissioners Jackie Newton and Fred McCoy remaining. Therefore, a new majority will make future decisions on how the school deposit will be refunded.

The council plans to borrow money in phases and stagger debt payments to reduce pressure on residents, rather than withdrawing it all at once.

Newton said that once the public votes on the bond referendum, there will likely still be a delineation between “have-to-haves” and “love-to-haves.”

However, there will always be costs to taxpayers, as McCoy reminded the money “is not going to come out of the blue”.

“Someone has to pay for this,” he said. “But we have to support our children.”

The county plans to issue initial project funds for PCS needs from its general fund or school capital reserve fund and then repay itself.

The public may submit comments for or against the bond by June 13 to the County Commission at 805 S. Walker St, Burlaw NC 28415 and to the North Carolina Local Government Commission, Attn: Secretary of the Commission, 3200 Atlantic Ave. Longleaf Building, Raleigh NC 27604.

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