By Krysta Huber
Lexington City Council voted to increase by $1 million its advertised bond amount for a new Waddell Elementary School during a special work session Monday.
The adjustment comes one week after the Lexington School Board received bids for the project that were more than $2 million higher than its architect’s estimate.
The new advertisement says the council will hold a public hearing April 3 to discuss a bond issue of up to $13 million. Bonds are, in effect, a loan a municipality takes out to pay for a big project.
City Manager Jon Ellestad said council would have been limited to a bond issue of no more than $12 million if it hadn’t altered the ad.
But council members all said they had no intention of asking the Virginia Public School Authority – the organization responsible for issuing the bonds – for the full $13 million. They expect to make some changes to the project that will keep them from having to borrow the full amount.
City Council member Frank Friedman said Monday’s vote was strictly for the sake of keeping the project on schedule. Council must give two weeks notice for a public hearing.
That public hearing has to occur before April 11, which is the deadline for the application to the public school authority. Otherwise the city would have to wait until late fall for another opportunity to get funding.
Friedman said he also hopes the $13 million limit, which council approved, will encourage discussion among citizens.
“I’m eager for more people to be involved and not just have [higher taxes] imposed upon them,” Friedman said. “The people who have been coming to the meetings are usually fringe people: young professionals who say, ‘Raise my taxes, I don’t care,’ and elderly retirees who say, ‘Look, we can’t afford this.’”
But some council members worried about the message approving the bigger amount sent to citizens.
“Why advertise a penny higher if we aren’t going to spend it?” Council Member George Pryde asked fellow council members.
Council members said their primary concern was how a new elementary school building, added to other needed spending, will affect the real estate tax.
“There hasn’t been a council in the last 10 years who wanted to put this tax on people,” said Council Member Mary Harvey-Halseth.
Ellestad told council members he couldn’t provide a definitive number for how much the real estate tax would have to increase to fund the project. He said the increase depends on property values, which are undergoing reassessment. And the city could use other sources of revenue in addition to the real estate tax, like a sales or lodging tax, to pay back the loan.
An increase in the real estate tax also rests on the final price of the project and the amount of borrowing that council will approve.
The project’s architect, Randy Jones of OWPR, is working with the lowest bidder, Branch & Associates, to understand why the contractor placed its bid at $14.3 million.
OWPR and Branch & Associates will use a process called value engineering to reduce the cost of the project. Value engineering will allow them to determine what could be altered without compromising the quality and function of the building.
Jones said OWPR and Branch & Associates would consider using a different steel framing system, using different manufacturers and suppliers to purchase cheaper materials, choosing a cheaper priced brick, and eliminating some of the decorative brick on the building.
City council will also extend the payback period for the bonds by five years, to 25 years. A longer period will allow for lower annual payments and will avoid a bigger real estate tax increase.
If neither of those strategies lowers costs enough, Superintendent Dan Lyons told City Council there are two other fallback plans. One would reduce the size of the building by 4,300 square feet. OWPR would eliminate some hallways, restrooms and several resource rooms for gifted students or those needing extra help. It would also relocate the Head Start program classroom to the second floor.
And, Lyons said, Branch & Associates proposed completing the project in 15 months instead of two years. That would require moving Waddell students to Lylburn Downing Middle School during the construction period and using some temporary classrooms for instruction.
But Lyons said the school board would consider that option only if the savings were greater than the expense of renting mobile classrooms.
A public hearing on the $12 million bond issue scheduled for this evening has been canceled. The April 3 public hearing on the $13 million issue will take place during the regular city council meeting at the Rockbridge County Administrative Offices, 150 S. Main St., at 8 p.m.