Guilford County Schools officials have notified Guilford County officials that the projects in a $300 million school bond will actually cost $450 million to complete – rather than the $300 million school officials planned for when the bonds were presented to and approved by voters in 2020.
Guilford County Manager Mike Halford met with county commissioners in small groups to make them aware of the situation and let them begin considering options.
For the nine-member Board of Commissioners, a quorum is five and those meetings must be announced and open to the public. However, since the number of commissioners at any meeting on this matter did not exceed four, those meetings could legally be held behind the scenes while everyone attempts to consider a solution.
Two sources in Guilford County government said that school officials would obviously like to see the county simply allocate the money from the county’s fund balance – aka, its savings account. However, some commissioners are obviously not keen on giving the school system another $150 million right after the schools got approved for $300 million by voters two years ago, $1.7 billion this year, and also received an extremely generous amount in the county’s 2022-2023 budget that was passed by the Board of Commissioners less than a month ago.
Currently, no solutions seem like good ones. Guilford County Schools officials do not want to start cutting projects from that bond referendum since it was approved by county voters based on those promised projects.
One solution under discussion is for the county to offer the schools a line of credit that would later be repaid from the $1.7 billion from the school bond referendum that was approved in the May 17 election this year. However, that bond referendum also has project commitments tied to it, so many people don’t want to pull money from that.
Also, a huge worry now is that if those projects in the $1.7 billion are as severely underestimated as those in the $300 million bond, then that would be another $850 million.
On Thursday, Chairman of the Board of Commissioners Skip Alston acknowledged that the county was attempting to work with the schools to address the problem.
Alston, who’s a major advocate for school funding, said that it’s not surprising that the projects called for in the $300 million bond are expected to come in 50 percent over budget. He said it’s the pandemic, supply chain issues, the increased costs of materials and other well-known factors. He said that a 50 percent increase is not that remarkable given today’s economy.
Alston said that, as someone who works in the real estate business, he is seeing these types of inflationary pressures everywhere.
“Prices have gone up 50 percent on a lot of things,” Alston said,
Others are not so understanding.
Republican County Commissioner Justin Conrad balked at the notion that the expanded cost can be blamed on the pandemic or on general economic conditions.
“50 percent?? 50 percent!?” Conrad said.
Conrad said there has been some inflation, but nowhere remotely close to the amount by which the schools missed the mark. He said he has many, many questions that he wants answers to.
The current situation is reminding some of a 2017 debacle where Say Yes Guilford massively underestimated the cost of providing college to all graduating high school seniors and had to completely abandon its original model.
It is a very difficult problem facing the county and the schools, but Alston said that it arose due to unforeseen circumstances and the county would be exploring its options in the coming weeks.