Kingsport Times News Friday, August 29, 2014

Local News

Adams Elementary School facing shortfall but officials are unsure of amount

February 8th, 2009 12:00 am by Rick Wagner






KINGSPORT — Kingsport School Superintendent Richard Kitzmiller says it’s at best very premature to say the school system might ask the city to make up a projected $565,537 shortfall to start up a new elementary school.


In fact, the shortfall or “under budget” may not even be $565,537. And even if it is, Kitzmiller said the school leaders aren’t asking the city to provide help beyond what was discussed in late 2007.


But he said Kingsport Board of Education members definitely want to know if the city has earmarked or appropriated interest earned by idle bond issue money toward the project, as they said city leaders indicated in 2007.


City officials also talked about helping with Adams by appropriating leftover debt service from previously completed projects, Kitzmiller said.


“We don’t know if those actions have been done or not,” Kitzmiller said Friday, following a Thursday night BOE meeting in which the board did not act on a proposal to shift more than $100,000 in leftover capital project funds to help cover the shortfall.


BOE Vice President Randy Montgomery and member Pat Turner brought up the issue and asked the vote be delayed until more information was available on potential city funding to make up the shortfall.


City Manager John Campbell and Kitzmiller said their respective financial staffs need to look at the issue and report the results before either board takes any action.


Minutes of an Oct. 18, 2007, called meeting and work session of the BOE indicate that at that time $565,537 in additional funding was needed for John Adams Elementary, a more than $17 million project that was to have opened in the fall of 2008 but was delayed until the fall of 2009.


At that meeting, potential additional funding for the school project was identified as:


•Unused contingency money.


•“Value engineering,” or making changes that saved money.


•Money from Hawkins County school bond funds.


•An appropriation from the school fund balance or “surplus.”


“From what I recall, our Board (of Mayor and Aldermen) did not make any definitive commitment,” Campbell said Friday. “There’s no question there was a discussion ... on the topic when the project was being decided.”


The minutes indicate that with $293,903 in the balance of bond funds, $319,560 in potential debt service reserve and $700,000 in potential interest earnings, the total possible funding of $1.31 million would partly offset $1.88 million in future costs of $300,000 in communication wiring, $900,000 in furniture and equipment, and $679,000 in start-up costs.


Campbell said some BMA members said the school board need not come back with any further funding requests, while others said to come back when the final costs were better known.


One source of savings may be not buying enough desks and furnishings for the whole school, assuming it is not full the day it opens.


“All of us knew it was very unlikely the school would be full at day one,” Campbell said, recalling his time as city manager in Johnson City when that system built a series of new schools.


Among possible savings were having to dig fewer geothermal wells for heating and cooling the building, Kitzmiller and Campbell said. Campbell said that could save $200,000.


As for interest on idle bond proceeds, Campbell said the drastic drop in interest rates makes that a less productive funding source.


However, on the plus side, the BOE Thursday night added $542,451 in Hawkins County bonds to its revenue for 2008-09. The system already has received $345,213 from the bonds and may get the rest before June 30, system finance director David Frye said Thursday night.


comments powered by Disqus