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070709ssmboeHarnett County Board of Commissioners Minutes of Joint Special Session with the Harnett County Board of Education July 7, 2009 The Harnett County Board of Commissioners and the Harnett County Board of Education met in special session on Tuesday, July 7, 2009, in the Commissioners Meeting Room, County Administrative Building, 102 East Front Street, Lillington, North Carolina. Members present: Timothy B. McNeill, Chairman Beatrice B. Hill, Vice - Chairman Dan B. Andrews, Commissioner Gary House, Commissioner Jim Burgin, Commissioner Staff present: Scott Sauer, County Manager Wm. A. (Tony) Wilder, Assistant County Manager Dwight W. Snow, County Attorney Sylvia Blinson, Finance Officer Jennifer Slusser, Staff Attorney Margaret Regina Daniel, Acting Clerk Board of Education Member present: Donna McNeill, Chair Billy Tart, Vice- Chairman Vivian Bennett Thomas Womble Craig Matthews Staff present: Phil Ferrell, Superintendent Bob Troutman, Finance Officer Sylvia Wallace, Clerk Chairman McNeill, reconvene the meeting of the Harnett County Board of Commissioners. Chair Donna McNeill called the Harnett County Board of Education membership to order. Ms. Carolyn Smith, representing Congressman Bob Etheridge's office, stated the reason for the meeting which was for the Harnett County Commissioners and the Board of Education members to find out the status of school construction money. She stated that Congressman Etheridge was scheduled to be in attendance at this meeting; however, he was called on to attend a Ways and Means Committee Meeting. Mrs. Smith said she was at this meeting to gather information and questions to take back to the Congressman. She turned the floor over to Ben Matthews, Assistant Superintendent of the N.C. State Department of Public Instruction. Joint Meeting of the Harnett County Board of Commissioners and the Harnett County Board of Education July 7, 2009 Special Session Minutes Page 1 of 5 Mr. Matthews talked about where we are with the American Recovery Reinvestment Act and the American Recovery and Reinvestment Tax Act (AARA). These are two distinctive, different Acts. He said there are a number of pieces of money that came down from the Federal Government with one being Stabilization money. This is the money that the governor has control over, and it can be used to help with the budgetary shortfall that is taking place in North Carolina and the entire country. In the ARRA legislation, it talks about money from the Stabilization Act for school construction which has created some confusion. If there is any of this money left over after the governor chooses to fill in the budget hole, the governor can by law give some of this money in the form a grant to a school district for school construction which he stated is unlikely to happen. He stated that there is a lot of money coming to the school districts from under Title I. Mr. Matthews explained the two construction pieces under the American Reinvestment and Recovery Tax Act which are Qualified Zone Academy Bonds and Qualified School Construction Bonds. He said these are two different bond capabilities. Mr. Matthews reported that the State of North Carolina received $56,699,000.00 in bonding authority under the Qualified Zone Academy Bond piece. Mr. Matthews said North Carolina is one of the best states in the nation in using QZAB. He said Harnett County has the capability to apply for between $500,000 and $4 million for authority to sell Qualified Zone Academy Bonds (QZAB). These bonds have to be used at a school that has 35% free and reduced lunch; it can be more than one school. According to a federal law, the school must be clearly designated and targeted. The other piece of QZAB is that you must have a business partner(s) who will donate 10% of the face value borrowed over the length of the repayment teiiii. He said all the school system has to do is to send a letter stating that we have a business partner, who they are, and that they have agreed to contribute 10% of the amount borrowed. Applications are due to DPI no later than July 31, 2009 in order for it to be considered. QZAB is for renovations /rehabilitation, not new construction with zero interest. The wage/hr. agreement was added on both types of Bonds. Davis Bacon Act states that contractors must keep wage and hour documentation. The question arose if QZAB dollars could be applied for to use for a project that is already under construction. Mr. Matthews replied that if the documentation on wage/hr. could be done ; if you are at a point where you could go back and negotiate that, DPI would agree to doing this. Mr. Matthews stated that anyone who has not received a QZAB before would be first in receiving QZAB dollars. The Bond Council to the State Treasurer set the minimum of $500,000. The $2 to $4 million was based on statistics used to pay repairs and renovations. A group of architects and engineers dealing with school construction make the suggestion, and the superintendents and Advisory Bond Group make the decision. Mr. Matthews cited numerous examples where dollars can be applied toward the ten percent business partners that can be contributed toward the ten percent. Mr. Matthews also said the program will also be available in 2010 with $44,099,000. Qualified School Construction Bonds (QSCB) can be used for new construction and land acquisition but cannot be used for debt service. It must follow the requirement of documentation of the wage/hr. component. Mr. Matthews reported that Harnett County is authorized for $2,483,426.25 this year. This is a zero interest bond and will also be available next year. Joint Meeting of the Harnett County Board of Commissioners and the Harnett County Board of Education July 7, 2009 Special Session Minutes Page 2 of 5 The State was authorized approximately $275,000,000 with $88.6 million going to five counties off the top which left over $187,167,000.00 for the remainder of the counties. One of the reasons for the July 31 deadline is that the Department of Public Instruction (DPI) wants to know who in the state is not going to use this. DPI's thinking was that they know there are some counties that know specifically amounts of money they need. Federal legislation states these bonds must be sold by December 31, 2009. Any of them not sold basically revert to the State for reallocation in 2010 in that next year it is. A major piece of this is to stimulate the economy and to provide jobs for people. Mr. Matthews stated that there is a possibility that Harnett County can get more dollars, but will not know before the first two weeks in August probably. Chaiinian McNeill stated that Harnett County has $200 million worth of needs. He said the bottom line is that the federal government is bringing over 4,000 children to Harnett County and they should bear some responsibility for building the infrastructure these children need. It shouldn't be on the property owners to bear this burden. Chair Donna McNeill stated that no matter where the children are it cost money to educate them; whether in Department of Defense schools or in the Harnett County Schools. She asked why the money isn't following the child to educate the child. Mr. Womble asked if the dollars allotted to the child at their previous school system could follow the child when they enroll in Harnett County Schools. Chair Donna McNeill discussed the funding formula for federal impact aid for Harnett County and emphasized it is not enough to provide an adequate education for a child. Mrs. Smith said she would check with the DOD to try and get an answer to this question. Chairman McNeill stated that DOD is spending billions of dollars closing military bases and they need to help the communities that are absorbing this growth. Chairman McNeill added that Harnett County has experienced a 24 percent growth average according to the Census Bureau since 2000. Mr. Matthews asked Sylvia Blinson, Finance Officer, if Harnett County had received any indication that we would be eligible for any of the construction money from Impact Aid. Ms. Blinson replied that nothing specific was received, only information that gave the certain bonds that can be applied for. Mr. Matthews said it was their understanding some time ago that the counties surrounding Cumberland would receive some Impact dollars when the influx of military people came as a result of BRAG. Chailinan McNeill and Chair Donna McNeill stated that they have heard this for years, but no money has been received to date. Mr. Matthews said he had information that stated there are $39.6 million and $59.4 million for grants; he said he would look into this further. Members asked Mrs. Smith to help the County receive impact aid. Chairman McNeill said there is $100 million that's competitive among 26 growth communities across the country. He said it gets politicized as to who has the political power in Congress as to where the money flows to. Ms. Smith said she saw an e -mail about criteria required in order for systems to receive this type Joint Meeting of the Harnett County Board of Commissioners and the Harnett County Board of Education July 7, 2009 Special Session Minutes Page 3 of 5 of impact aid. She didn't remember all the details, but thought she remembered that Russ and David said that Harnett County didn't fall into one of the criteria and that was one of the problems. Eric Benson, a resident of Coats, addressed the Board. He said the military housing that is going on in Harnett County today is the direct cause of a new high school. He said that is a Department of Defense responsibility. Chaiinian McNeill emphasized the studies have been done by the BRAC Regional Task Force showing that Harnett County was predicted to get 4,000 new students. Mr. Ferrell stated that in one of Harnett County's elementary schools, 63 percent of the students are federally connected. We need a high school, middle school, and an elementary school in that same area. Based on the percentages, each one of those schools would be 30 to 50 percent federally connected students. Chairman McNeill added that anyone going through that part of Harnett County today would see houses under construction and houses just completed being moved into. He said that side of the county, because of the expansion of Fort Bragg, has been insulated from the recession; but that doesn't insulate us from the challenges that we face county -wide. Chaiiinan McNeill said local citizens cannot bear this burden alone. Mr. Ferrell said in 2013 it has been projected that we will have over a 4000 seat shortage. Chairman McNeill reminded those present that statute dictates that we must educate these young people, and we do not have the funds to do it. Mr. Ferrell said it takes over two years to design and build a school, assuming you have the land. Mr. Ferrell then said they had built a new elementary school there, and opened it in January 2009 and capped it in February 2009. They have plans for a middle school, but the same thing will happen. Chairman McNeill noted three or four buses travel in and out of the military housing area bringing kids into our schools now and they don't even pay for the school buses. He said there is no tax revenue whatsoever other than what money the residents may spend at stores or restaurants in the county. Mr. Matthews talked about the AARTA — American Recovery and Reinvestment Tax Act. If under general AARTA construction, you must first use all American products, or go into lengthy explanation why you cannot find them. Mr. Matthews stated that under the Tax Act, we are excluded from that. He said that the USDA has some money that can be used in a grant scenario and loans scenario. Another piece that DPI doesn't have control over is grant money from the State Energy office. The state has in hand some money that can be used for solar hot - water, solar panels on roofs of schools to put out electricity, there will be some pure grants available for that for which the school system can apply. The precursor to this is that the school system must have an Energy Management Plan in place. This grant money may continue for two more years. There's a bill in the Senate about the green school construction. He said that QZAB is the first time that the federal government has made any investments in construction in education. Mr. Ben Matthews stressed the importance of the application being received by his office no later than July 31. He said both Boards signing the application shows a good faith effort to sell Joint Meeting of the Harnett County Board of Commissioners and the Harnett County Board of Education July 7, 2009 Special Session Minutes Page4of5 these bonds by December 31, 2009. The Board of Education members passed a motion to proceed with applying for $2.5 million of QSCB and in its notification to the Department of Public Instruction of applying for $2.5 million. Commissioner Andrews moved to assist the Harnett County Board of Education with their application for $2.5 million of QSCB funds. The motion was seconded by Vice Chairman Hill which passed unanimously. The Board of Education members adjourned their meeting. Commissioner Andrews moved to recess the meeting of the Harnett County Board of Commissioners until Friday, July 10, 2009 at 10:00 am. Vice Chairman Hill seconded the motion which passed unanimously. eeler, Clerk Joint Meeting of the Harnett County Board of Commissioners and the Harnett County Board of Education July 7, 2009 Special Session Minutes Page 5 of 5