A crowded classroom at Pinehurst Elementary.

A crowded classroom at Pinehurst Elementary. A new school is being built on the existing Dundee Road campus. (Photograph by Ted Fitzgerald/The Pilot)

While Moore County Schools spends the next few weeks identifying nearly $2.7 million in cuts to three new elementary school construction projects, the school board will try to find ways of covering that shortfall.

The board discussed the conundrum in a special meeting on Friday morning, 10 days after the county commissioners asserted that they don’t plan to provide funding for the schools beyond the $103 million financed through general obligation bonds that voters approved last May.

On March 5, the commissioners approved a $2.7 million cost overrun on the new elementary school on Morganton Road that will replace the current Southern Pines primary and elementary schools. Though the four new 800-student elementary schools slated to open between now and 2021 are very similar, their ultimate price tags are proving to be unpredictable. That’s due in part to variances in the amount of work involved in preparing each site for construction, but the school board is placing most of the blame on inflation.

“All of these overages are not because we didn’t do a proper estimation,” said board member Ed Dennison, who recalled vigorous debate between the school board and commissioners over the 4 percent annual inflation projection included in determining each project’s budget and the overall bond amount.

“All of the overage is because the inflation rate went up higher, really, than we were allowed to use when we did our proposal.”

The new school under construction off of N.C. 5, which will replace the two current Aberdeen schools, got started late last year. Per square foot, it’s about 8 percent more expensive than McDeeds Creek, which the district contracted to build in late 2017. The same Cary-based company, J.M. Thompson, is building both schools.

After the initial bidder for the new Morganton Road school backed out due to a miscalculation in its proposal, the schools turned to the next-lowest of the five bidders. The resulting $30.3 million construction contract, which the school board voted to award last week, is $2.68 million over the original construction budget for that school.

On Friday, Superintendent Bob Grimesey asked for the board’s input into the parameters of possible cuts — keeping in mind that costs are only expected to escalate with any delay in the project schedule.

“Time is not our friend, so trying to stay on schedule and do that right, to try not to make mistakes, is something we take very seriously,” he said.

Cutting Consistently

This past week, Grimesey said that the schools confirmed with the county’s bond advisors that financing though last year’s general obligation bond issue is fungible across the three schools involved. Since the Aberdeen school is already under construction and the schools have committed funding for building Southern Pines, school staff is looking to cut from the “after market” expenses: furniture, equipment and technology.

“Our current reality is that we have to cut $2.68 million across three projects. That’s going to require a lot of energy and time from the staff. That’s where we’re going to be for the next three or four weeks.”

That works out to nearly $900,000 per school — or 39 percent of each school’s budget for everything from desks, art supplies and physical education equipment to servers and wireless internet routers. About $1 million in each new school’s budget is devoted to technology — a line item that board members vetoed as a possible place for savings.

The majority of the school district’s technological systems are out of date as it is, and the warranties have expired, so the schools have no means of replacing it. Board members shied away from the idea of moving equipment that could fail at any time into brand-new schools.

“We would like to try to find ways to outfit these buildings appropriately from the outset and not piecemeal,” said Chair Helena Wallin-Miller. “That is our premise: we want to put new furniture, fixtures and equipment and technology in there, starting with technology.”

Administrators have already reached out to the principals of the existing Aberdeen, Southern Pines and Pinehurst schools to begin an inventory of items that have useful life left and could be moved to the new schools.

Board members discussed whether or not they should adopt a similar approach to McDeeds Creek, and move used fixtures from Sandhills Farm Life and Vass-Lakeview there in the interest of keeping quality consistent across all four new elementary schools. Ordering furniture for that school has been on hold for the last few weeks, but the board directed staff to proceed with outfitting that school within its budget.

“I think we need to just go ahead and say McDeeds Creek is not in this ball game,” said Vice-Chair Libby Carter. “Its funding comes from a different source, we don’t control the leftovers. They need to go on and enjoy their new furniture, their new pots and pans, their new library books and equip that school as we have been told we can do because we have the limited obligation bond.”

John Birath, Moore County Schools’ operations director, said that the third bond project could potentially come in within budget. The new Pinehurst elementary school will be built on the existing Dundee Road campus. Including inflation, that school has a construction budget of about $32.2 million.

The schools are expected to solicit contractors’ bids for the new Pinehurst school this summer.

In the process of finalizing the construction contract for the new Aberdeen school, the schools made about $500,000 in cuts. Those modifications were reflected in the proposal for the new Southern Pines school, and will also roll forward to Pinehurst.

“These changes we’re making at Southern Pines, we’re going back to Aberdeen to implement these changes. We’ll do it even at McDeeds Creek if there’s anything we can still apply there because it is so far along in construction,” said Birath. “Everything we’ve done since McDeeds Creek, to Aberdeen and Southern Pines, will be carried over into Pinehurst. We’re trying to be consistent and everywhere we can when we learn or do something we go back to the other projects and apply the same standards.”

Seeking Other Cash Sources

Each school’s budget included nearly $1 million in “contingency” funds to account for unexpected expenses that arise during construction. Based on the status of the Aberdeen and Southern Pines projects, Birath said there could be about $250,000 between those two schools left over to apply to furniture and equipment — but that it’s too soon to bank on that.

“Once you have all of your site development pretty much established, they’re doing the final work on the site, the building roof, windows and doors are in, at that point you have a pretty good idea of how much of that contingency you can recommend letting go,” he said. “That would be premature right now because Aberdeen is just coming out of the ground, Southern Pines is in its grading phase, and at Pinehurst none of the main building work has begun.”

So the board turned to discussion of other potential methods of funding — including approaching the county about extra money made from the sale of the Southern Pines and Aberdeen school bonds. Based on the perceived security of the investment relative to the market, the county received a $2.4 million premium on the sale of the Aberdeen school bonds, and a $3.4 million premium when it sold the bonds for the Southern Pines school.

Both Carter and Dennison supported pursuing that avenue.

“I’m not even happy we’re having this conversation,” said Dennison. “From my point of view, the bond issue is no different than the administration bringing us a budget: we approve the budget, we accept it for what it is. We do the same thing with the commissioners, in conversations with them. Including the inflation factor, they approved it.

“I understand we can only spend $103 million on the bond, but in my mind I can see no reason why the commissioners can’t use other funds to cover the overage in inflation that they had not anticipated either.”

Board members also discussed exploring opportunities for community fundraising to outfit the new schools — including “sponsor a classroom” efforts or potentially dedicating areas of the school to benefactors. Board member Bruce Cunningham suggested offsetting costs through grants for school needs that relate to various foundations’ missions.

“There are a lot of foundations out there that have a perspective of what they would like to promote: fitness, or children with disabilities is a very common one,” he said. “There are also foundations that are local… that have an interest already built in so we’re not talking about a campaign or a year of work to simply ask.”

But Carter said Moore County Schools shouldn’t have to resort to writing grants to provide fundamental things like desks and library books.

“It would be nice to think that’s the kind of campaign we could mount to provide extras for our children, rather than having to provide the basics,” she said. “I think we need to go back and look at the bond and what might be available on the county level and exhaust that avenue.”

Contact Mary Kate Murphy at (910) 693-2479 or mkmurphy@thepilot.com.

(5) comments

These schools cost more than three times what is spent on many private and charter schools in our state. There is no excuse for this level of spending, but MCS never considered low-cost alternatives. We recently watched the superintendent ask for a huge increase in his budget, clearly oblivious to the government spending explosion in our County. Why not look for savings in the MCS central staff - charter, home and private schools do well with negligible central staffs. When will the Wonder Women suggest a solution? Why not use the money for the unnecessary nurse training center at SCC to cover higher costs? Taxpayers should read their revaluation notices carefully and appeal if these are high. Then get ready for the rate hikes on July 1st.

Jim Tomashoff

This is at least the fourth time Kent has claimed that "...schools cost more than three times what is spent on...private and charter schools in our state." He never provides us of any proof that this is so. I suggest that we all challenge him to do so, I can't be the only comment writer who is troubled by this. We should all inform him that his comments will be challenged until he does so. He comments so often and about so much, always claiming that policy makers waste tax money. Challenge him to prove what he claims every time he does so. Maybe then he'll shut up.

Calvin Jones

I agree with you Jim. I have noticed that 98% of the time, Kent post negative comments. He has mentioned what they did in Wake County and so on. This is not Wake County, this is Moore County... If Kent have so much expertise on day to day operations, please run for elective office and share your expertise and stop being so NEGATIVE!!!!

Mark Hayes

I seldom react or offer a rebuttal comment on subject matter you post, but referring to the " nurse training center at SCC " as unnecessary , that is a bit over the top. This area has many medical facilities that requires those trained nurses, and all others in the field of healthcare. I will venture to say that this area will employ far more in the healthcare positions than those employed in the industrial fan manufacturing . Lighten up , so many other means of expressing an opinion, don't degrade or dismiss the importance of SCC for our locals and not so local.

Jim Tomashoff

Mark, how dare you question Kent's knowledge is this area. He's the world's expert on everything. To build on Calvin's comment, Kent should run for office, and once elected he should rally all of his gun-toting Christian fundamentalists true-believers and together take-over all aspects of government, as I'm sure he thinks God has anointed him to do. I mean, if God didn't want him to do this, why would God have given him such extensive knowledge, knowledge which exceeds that of mere mortals, about everything, starting with the cost of building schools?

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