Local Government Commission Casts Doubt on Jones County School Deal | Eastern North Carolina Now

    Publisher's note: The author of this post is Dan Way, who is an associate editor for the Carolina Journal, John Hood Publisher.

Commission approves public-private agreement to build school, but only after tough questions from Folwell and Wood


    The N.C. Local Government Commission Tuesday approved $11.3 million in construction bonds sought by Jones County Schools. But members expressed deep reservations about the statewide precedent it set allowing private ownership of public school buildings.

    "We've got to get this right for Jones County," said state Treasurer Dale Folwell, chairman of the Local Government Commission.

    Supporters say this could be a once-in-a-generation shot to build a desperately needed K-12 school in a poor county with meager tax revenue. The school is projected to open for the 2019-20 school year.

    Folwell and State Auditor Beth Wood peppered school district officials with a series of questions. They focused on whether First Floor K-12 Solutions deserved such an unusual and potentially risky contract, and why local officials appeared to perform only minimal vetting of the contractor.

    Under the contract, First Floor will own the $45 million school building and the school district will lease it for seven years. Some $30 million of the funding will come from state appropriations and county sales tax revenue.

    Folwell questioned First Floor's worthiness, noting it is being sued in Horry County, South Carolina, over cost overruns and failure to meet construction guarantees on several schools. That state's Bureau of Investigation is conducting a probe into the business. Jones County officials said they weren't aware of those actions.

    Wood said Hoke County Schools officials refused to answer Local Government Commission questions over whether First Floor could satisfy guarantees it gave to save electricity costs by using solar and other renewable energy components - a big reason it won a contract there.

    She said the lack of cooperation made her suspicious about First Floor.

    "I worry that the people on the other side are not as honest as you," Wood told Jones County officials. She said she wants to ensure school officials and county residents, including her family members, don't suffer from a bad decision.

    "First Floor Solutions has a horrible reputation," Wood said. "I have grave concerns."

    She said signing off on this bond would make it harder to turn down similar projects in the state's other 99 counties.

    "Not everybody has a Harry Brown," Wood said, referring to the Senate majority leader and chief budget negotiator from Onslow County. Brown helped steer state lottery proceeds and Golden LEAF revenue to the cash-strapped county for the school project.

    Those extra proceeds cushion the county from risk if First Floor went belly-up for any reason, Wood said. Other counties making similar deals would face greater taxpayer liability because the state might not underwrite most of their debt and the counties and would have to borrow much more for construction.

    Local Government Commission Secretary Greg Gaskins said Jones County should not have signed a pre-development agreement with First Floor without understanding all the implications, and paying for the architectural design before bonds were approved. A complicated financing agreement with Capital One using state tax credits instead of cash to repay some of the debt further muddied the arrangement.

    Wood worries the bond signals to school districts it's easier to ask forgiveness after they enter an ill-advised project than to get permission at the front end.

    Gaskins said the contract would add between 5 and 12 percent to construction costs, compared to 2 percent to 3 percent for traditional bond financing. Commission staff related that concern to Brown's office.

    Because Jones County is borrowing only $11 million, the added costs aren't particularly harmful, Gaskins said. In other school districts that take out larger bonds, that difference could be crippling.

    Despite questions about the higher costs, Gaskins said the project appears to comply with a statute the General Assembly passed this session letting private entities build and own public schools and lease them back to the school district.

    "Without a doubt, the private sector should collaborate with school boards and county commissions to finance, build, and operate public school buildings," Terry Stoops, vice president of research and director of education studies at the John Locke Foundation, told Carolina Journal after the meeting.

    But transparency and accountability must be a vital part of the process, he said, and the new law falls short.

    "My hope is that lawmakers revisit the law, and strengthen safeguards for taxpayers in counties that pursue public/private partnerships for school facilities," Stoops said.

    Gaskins suggested the commission join with other interested parties to express concerns to the General Assembly about this funding mechanism. Part of the discussion should include whether the commission should have greater authority in the approval process.

    Members approved the bond on a split vote.

    The motion contained a caveat the Jones County Board of Education agree to answer all commission questions about cost, operation, debt, and money required to complete the project, and to provide supporting documentation.
Go Back


Leave a Guest Comment

Your Name or Alias
Your Email Address ( your email address will not be published)
Enter Your Comment ( no code or urls allowed, text only please )




Statement by President Trump on Jerusalem Statewide, Government, State and Federal Statements and Appointments from the White House for December 6/7, 2017


HbAD0

Latest State and Federal

Former President Donald Trump suggested this week that if he becomes president again, he might allow Prince Harry to be deported.
Vice President Kamala Harris will visit a Minnesota Planned Parenthood clinic, reportedly the first time a president or vice president has visited an abortion facility.
Sen. Ted Cruz (R-TX) said this week that the only campaign promise President Joe Biden has delivered on as president is the complete dismantling of the U.S. southern border.
Hamas is reeling after losing two of their most cherished leaders on the same day: military commander Saleh al-Arouri, and Harvard President Claudine Gay.
President Joe Biden’s brother told the Internal Revenue Service that Hunter Biden told him he was in business with a “protege of President Xi,” referring to the leader of China, according to notes by an IRS investigator that were divulged during a congressional interview of Jim Biden.
That’s the question Marguerite Roza of Georgetown University’s Edunomics Lab sought to answer in a recent webinar on the topic.
The University of Florida has fired all of its diversity, equity, and inclusion (DEI) employees and shut down its DEI office.
Glenn Beck: 'When the United States government can come after individuals, that's when you know our republic is crumbling.'
Rep. Mark Green (R-TN) reportedly blasted Homeland Security Secretary Alejandro Mayorkas for “stonewalling” details about the illegal immigrant accused of murdering Laken Riley, a 22-year-old Georgia college student.

HbAD1

 
Back to Top