In February, the Macon County Board of Commissioners unanimously voted to cancel a contract with LS3P Architect for the design concept work to renovate an existing space at Highlands School. The Highlands Preschool project was prioritized and identified as a need by the Macon County Board of Education and garnered significant community support and funding. Despite approving the contract with LS3P for the design work on November 8, 2022, in the amount of $329,255 and allocating funding for the work, the Macon County Board of Commissioners canceled the contract, costing taxpayers $35,262.40.
During the March meeting of the Macon County Board of Commissioners, residents addressed the board during the public comment period, expressing their frustration with the board for canceling the project and urging commissioners to reconsider. However, according to the board of commissioners, the contract for the Highlands School renovations was canceled at the request of the school board.
Commissioner John Shearl, who represents the Highlands District, defended the county’s decision to end the contract and said that he doesn’t think the $35,000 spent on the LS3P Contract prior to it being canceled was a waste a money because he doesn’t think the project is entirely dead. Shearl acknowledged that the main building/Pre-K renovation project remains a top priority for the school board, it just did not rank high enough in the upcoming budget cycle to be considered by commissioners this fiscal year.
“When we voted to defund that project, it was all based on the school board having the same vote, and they voted the same way,” said Commissioner Shearl. “Had the school system voted and said, “no, Pre-k in Highlands is number 1, it would have come back to this board [county commissioners] and we would have funded it.”
While Commissioner Shearl said the vote to terminate the contract with LS3P was contingent on the school board also voting to terminate the contract, the board of education never really held a vote to that effect. The vote the Board of Education took during the February board meeting was merely to accept the fact that commissioners voted to terminate the contract.
Nantahala Board of Education representative Melissa Evans stated, “I make a motion that this board accepts the commissioner’s decision in respect to the Highlands Pre-K project,” after Board of Education Chairman informed the board that commissioners would like the school board to hold a vote concerning the decision made by commissioners to end the contract with LS3P.
Board of Education member Stephanie Laseter asked for clarification regarding Evans’ motion — specifically asking, “is the motion on the floor to deprioritize the Highlands Project?” to which Chairman Breedlove responded, “No the motion is just to accept the commissioner’s decision with the understand that we [board of education] will not be removing this as a priority.”
Laseter again clarified, “so we are just accepting their decision?”
And Breedlove again confirmed, “correct.”
Further, during the February meeting when commissioners voted to terminate the contract, Chairman Breedlove clarified directly to commissioners that the project was a top priority for the district. Chairman Breedlove addressed commissioners during their monthly meeting to clarify that while the Highlands Project was ranked behind the new build of Franklin High School in terms of priority, the project remained a top priority for the school system and would continue to be prioritized and championed by the school system.
According to the official minutes from the February 21 meeting, there was no mention the vote was contingent on the school board also voting. According to the minutes, “Commissioner Young made a motion, seconded by Commissioner Shields, to authorize the county manager to terminate the contract with LS3P as requested. The vote was unanimous. By consensus, the board acknowledged the priorities established by the liaison committee.”
However, the actual motion according to video recording of the meeting, as suggested by Macon County Manager Derek Roland was “a motion to formally acknowledge these priorities for the Macon County School System for the fiscal year 24 and at the same time, to authorize the county manager to terminate the contract with LS3P for the Highlands Pre-K renovation as allowed for in that contract.”
Roland also clarified that the motion would have to be “contingent upon the school board doing the same. Contingent upon the school board acknowledging these priorities as well and moving forward with the termination of that contract for the Highlands Pre-K.”
Although the official meeting minutes reflect the motion was made by Commissioner Young and then seconded by Commissioner Shields, it was actually Commissioner Shields who made the motion presented by Roland.
Although the action taken by the county was to “terminate the contract’ and last-minute change to the county’s contract with LS3P permitted commissioners to end the contract at any time between the phases of the project. According to an email sent by County Manager Derek Roland on November 4, the Friday before the November 8 meeting when the contract was approved, the agreement was amended to state “all phases in the Scope of Services attached hereto as Exhibit A shall be approved separately by the Macon County Board of Commissioners,” and “Each Phase of this contract shall be separately voted upon and approved by Resolution of the Macon County Board of Commissioners. After payment in full of any previously approved and completed phase, Macon County may elect to terminate this construct at any time and upon such election, no further compensation shall be due Architect.”
Based on the contract amendment approved by the board, the contract with LS3P would have ended after the completion of the first phase if commissioners did not approve a resolution to continue or the contract would have ended if action was taken to terminate, the commissioners electing to do the latter. However, because the Macon County Board of Education was named as a party to the agreement, the contract could not be terminated without both boards agreeing to do so.
Commissioner Shearl said he is willing to meet with anyone at any time to discuss the project, the information he has been presented, and further explain his current stance on the project. At he request of those in attendance, Shearl said community meetings could be scheduled for the Highlands community specifically regarding the project.
The priority list referenced by both boards comes from a February 9th meeting of the joint facilities review committee— which is a group of people from both the county and the school system tasked with managing the school system’s facilities. The joint review facilities committee includes county commissioner liaisons Commissioner Josh Young and Commissioner Gary Shields. The joint committee was asked by county leaders to prioritize capital facility needs in an attempt to provide structure in terms of funding allocations. County leaders did not provide the committee with a budget to adhere to, simply to prioritize the current needs of the school district.
Historically, the school system submits capital outlay requests to county commissioners during the budget cycle. The requests vary greatly from year to year and focus on facility upkeep needs such as new windows and HVAC systems rather than construction or renovation projects, which have traditionally been handled separately and considered separately as the annual capital outlay allocation for the school system as traditionally been around $1 million annual for general upkeep. With new commissioners serving on the board of commissioners, rather than follow the same process they have for over a decade, the new board directed the school system to lump all needs, upkeep and new construction together and prioritize the needs.
Following the meeting, the joint committee prioritized the emergent needs of the school system including repairing vent pipes at Macon Middle School, repairing or replacing the Nantahala wastewater system, building a new Franklin High School, renovating the Highlands Middle School, and repairing the track at Macon Middle School.
Of the five items identified by Roland as being selected as priorities for the FY 24 budget — all of the projects with the exception of the new Franklin High School build are already underway as part of the FY 23 budget and are in the process of being completed. Those four projects had been previously approved by the board with initial funding allocated for most of the projects.
At the last update to the school board during the February board meeting, the Macon Middle School pipe ventilation issue was presumably resolved, the Nantahala wastewater system project was on hold after engineering firms turned down requests to accept the job. The Nantahala wastewater treatment plan has been on the school system’s priority list since as early as the 2014-15 budget year when Superintendent Dr. Chris Baldwin warned commissioners then, nearly 10 years ago, that the plant was near the end of its life and needed repairs. However, the project has not received funding from the county to date. The Macon Middle School track project is currently in the bid solicitation phase of the project, and thanks to a $109,936 grant, a portion of the project is already funded which is also the case for the Highlands Middle School renovations. While the middle school renovations were identified as a top 5 priority by the school board, the project is currently in process and being funded through the Repair & Renovation Fund from the NC Education Lottery.
Therefore, out of the 5 items listed by Roland, only the Franklin High School project is in need of complete funding prioritization within the county’s annual budget and with a more than $100 million price tag, that will need significant grant funding or a tax increase to come to fruition.
Jerry Moore addressed the board during public comment period and said he would like to hear from the county about what commissioners think the county can afford in terms of capital projects within the school system. Referencing other emergency needs such as leaking sewer and dangerous sports facilities, Moore said those too were prioritized like the Highlands School Project, however, the county essentially cut off funding consideration at the school renovation project without ever giving a budgeted or anticipated budgeted amount to be available for the school system’s needs.
During a presentation by Macon County Finance Director Lori Carpenter during the county’s budget kickoff meeting, the county is currently reporting an excess of $11.2 million collected in revenues compared to the county’s expenditures, which means the county will again have undesignated funds at the end of the fiscal year, that could potentially just end up in the fund balance, a fund balance that is already around 10 percent higher than average for North Carolina counties. The roughly $300,000 that was remaining on the LS3P contract for the architectural services was reverted back to the county’s continuously growing fund balance. Members of the public noted with projected excess funding this fiscal year alone, the county could fund the Highlands project immediately, with existing funds within the county’s fund balance without having any impact on the county’s financial position.
Moore also noted Highlands residents continue 50% of the county’s property taxes, despite having a fraction of the residents. “Highlands’ properties generate approximately 50% or more of the $33,000,000 in property tax revenue, but the approximately 3,500 year-round residents only need a small portion of this revenue to meet their needs,” said Moore.
Commissioner Josh Young responded to Moore by pointing out that 97 percent of the county’s exiting debt services are associated with the school system, with the county considering taking on more debt with a more than $100 million project in the works to construct an entirely new Franklin High School. Currently, out of the county’s total $28,879,271 in existing school debt, roughly $350,000 a year is associated with the Highlands School, with $150,000 of that being paid in full this year and the remaining $200,000 debt line item being from a joint project involving Union Academy.
Annual debt payments for Macon County surpassed $1 million annually in the last budget cycle, with about $300,000 of the $1 million coming from NC Education Lottery Funds, leaving the county to cover the rest.
A brief look at loans/debts associated with Macon County Schools include a $2.6 million loan for the Sanders/Owens property that was purchased in 2007 to construct Mountain View Intermediate (MVI); a $20 million loan issued in 2008 to construct MVI and the expansion of East Franklin Elementary; the $12.8 million loan to construct Iotla Valley Elementary School issued in 2010; a $2.92 million loan for a 6 classroom addition at South Macon Elementary issued un 2018; a $8.1 million loan for renovations to Macon Middle School; a $2 million QZAB loan to renovate East Franklin Elementary issued in 2007; a $1.8 million QZAB loan issued to renovate Nantahala School in 2010; a $1.5 million loan used to purchase technology for Macon County Schools in 2012; a $374,000 loan in 2013 used to purchase new defibrillators; a $1.5 million loan issued in 2013 to renovate Highlands School; and another $2.9 million QZAB loan issued in 2015 to renovate both Highlands School and Union Academy.
The 2013 loan issued for the Highlands School renovations was issued at zero interest with the $1,500,000 scheduled to be fully paid during this budget year. The 2015 QZAB loan that was issued in a combined project for Union Academy and Highlands School was issued for a term of 15 years at no interest — which would have the $2.98 million loan rolling off the county books in 2030. Currently, out of the county’s total $28,879,271 in existing school debt, roughly $200,000 a year is associated with the Highlands School, and even that debt line item is from a joint project involving Union Academy.
Commissioner Young said when looking at the overall needs of the entire school system as well as other county department needs, commissioners are tasked with balancing it all.
“Someone has to be the bad parent,” said Commissioner Young. “Highlands does need a Pre-K. They genuinely need a Pre-K. I don’t think there is anybody in this room that would dispute that.”