AN AUGUST 25, REPORT submitted to members of the Durham Board of County Commissioners outlines a long history of focused work aimed at constructing a Durham Public Schools Capital Improvement Plan (CIP).
The report provides details of a revised 2020-2029 Capital Improvement Plan (CIP) approved by the board in June 2020. It goes a long way in separating the truth from fiction relating to the county’s response to school funding.
“What does it matter to have a fund balance so full for a AAA Bond rating when buildings are falling apart,” Mike Lee, member of the board of education, said during an April 14, 2021, emergency Board of Education meeting.
Lee is not the only board member critical of Durham County Manager Wendell Davis’ handling of school funding.
“We’ve watched the new courthouse go up. We watch Administration I, Administration II, everything the county owns, human services, brand new constructions,” said Natalie Beyer, member of the board. “I shouldn’t have to beg for our children. We should be in partnership.”
The funding for the new courthouse, new human services complex and the new library are the result of the former Board of County Commissioners creating a facility master planning study that was incorporated into the county’s capital improvement plan. The plan took 20 years to complete.
In comparison, Durham Public Schools went more than 20 years without a facility master planning study. That changed when Pascal Mubenga became superintendent of Durham Public schools. It is important to note the conversation that started the public contention between Davis and Commissioner Heidi Carter is about the schools constructing a CIP.
The report provides a summary of the county’s history in working with Durham Public Schools in developing a CIP:
August 2018 - Durham County Budget Department communicates Capital Improvement Plan (CIP) guidelines to departments and entities funded through the Durham County Capital Improvement Planning Process.
September 2018 – Durham County works to develop the county manager’s recommended CIP.
May 28, 2019 - Members of the Board of Education meet with members of the Board of County Commissioners to discuss the schools Long-Range Facility Assessment. Davis recommends the CIP include an additional $40 million for Northern High School and an additional $10 million to support other projects. These projects were to be identified by Durham Public Schools later.
May 28, 2019 - Durham Public Schools informed the county they were completing their Long-Range Facility Assessment scheduled to be approved by the Board of Commissioners in the Fall of 2019. The CIP adopted by the county includes $410 million for capital projects over a ten-year period, and $320 million in new spending. The board also approved lottery funding of $1 million annually.
Summer 2019 – Durham Public Schools communicates to county staff an additional $51 million, versus $49 million, is needed to complete the Norther High School project.
September 12, 2019 - Durham Public Schools provides refined projections for Northern HS ($51 million) and Elementary C ($37.38 million) starting in fiscal year 2020-21.
September 17, 2019 - during a joint Board of Education/Board of County Commissioners meeting, schools staff updates funding needs for Elementary Schools at $49.2 million. County and schools staff agreed to work together to vet projects and refine cash flow timing. The request increases funding from $410 ($320 million in new dollars) over a ten-year period, to $816 million ($726 in new dollars) in ten years.
October 2, 2019 - school staff updated total cost projections that include an additional $578 million in capital projects.
Davis notes the 2016 Bond Referendum allocated $90 million to support Durham Public School projects. All that money must be spent by November 2023. More than $42.8 million remains unspent for various school capital projects as of April 22, 2021. $39.9 million of the 2016 bond funds was originally budgeted to fund the new Northern High School construction project. Those funds were reallocated to other projects that were deemed “shovel-ready” to ensure these funds are spent by November 2023.
“Authorization is required from the Local Government Commission to spend funds beyond November 2023,” the report states. “If an extension is requested and not approved, then the funds would no longer be available for use. Durham County requested an extension from the Local Government Commission. The extension was granted. However, request for extensions is not looked favorably upon by both the Local Government Commission and the rating agencies (e.g., possibly as a result of insufficient project(s) cost needs, inaccurate cash flow planning, timing, etc.).”
October 2019 – County and schools staff continue to work together to vet project scopes.
November 2019 – Dough Carter, the county financial advisor, offers estimated total costs, cash flow needs and project timing.
November 12, 2019 - The financial advisor meets with the members of the Board of County Commissioner and Board of Education.
November 22, 2019 - During the Board of Commissioner Planning Retreat, the financial advisor notes the importance of sequencing projects to assure funds are available when construction occurs. He warns the board to avoid premature borrowing and reminds the board of the importance of Durham Public Schools prioritizing projects with a manageable CIP. The financial advisor challenges the staff to revisit project sequencing to ensure cash alignment.
December 19, 2019 -County Manager Davis sends a letter to Superintendent Pascal Mubenga requesting a prioritized capital project list.
January 25, 2020 - Durham County receives a prioritized list of school projects reducing the amount to $468.3 million approved by the Board of Education. The financial advisor asks county staff to revisit cash flow projections and to consider lower interest rates when calculating projected debt payments. The schools provide a two-week timeline for cash flow projections.
January 27, 2020 - The financial advisor meets with the County Manager, Superintendent and County and Durham Public Schools staff and request DPS provide the cash flow projections for the total estimated costs of the projects over a 10-year period.
January 30, 2020 - County staff meet with the County Manager to review a developed preliminary revised CIP for planning purposes. The plan required vetting by the financial advisor to assess affordability, timing based on historical spending and the potential impact of the new debt level on the County’s AAA bond rating.
February 3, 2020 - County staff presents preliminary draft CIP to the board during a work session. The revised CIP increases funding from $787.2 million to $932.9 million.
February 4, 2020 - County staff presents the preliminary draft CIP at the Joint Board of Education/Board of County Commissioners meeting. The updated CIP includes an increase of $163 million for DPS related projects, bringing the total budget to $483.3 million over a 10-year period.
February 7, 2020 - Schools staff provides cash flow estimates.
March 16, 2020 - The financial advisor provides his feedback on the preliminary revised CIP to the County.
June 2 and 8, 2020 – the county board discusses the Revised CIP.
June 22, 2020 - the county board adopts the Revised CIP.
October 12, 2020 – Durham Public Schools completes capital project budget amendments for authorization of capital projects that were deemed needed to begin and were “shovel-ready”.
September 29, 2020 -The board approves $7.8 million for Durham Schools of the Arts renovations.
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