By Stefanie Jackson – Northampton school and county officials have already begun the process of financing $25 million in renovations and repairs needed at Northampton High School, even though the exact work to be done has not yet been determined.
“It looks like after years of debating whether or not we needed … to do something, we’re now moving forward with renovation,” said Superintendent Eddie Lawrence at the Aug. 22 school board meeting.
Renovations will be done on the school’s 1978 addition, and new construction will be added on the building’s south side for Northampton Middle School, which currently occupies little more than a hallway in the high school.
The original 1954 construction on the north side – with the possible exception of the auditorium – will be demolished after the new addition is complete.
The middle section of the school, constructed in 1954 but renovated in 2008, will remain.
It is unknown exactly how much of the $25 million will be spent on the new addition, although the financing application estimates $14.5 million for construction and $7 million for reconstruction and rehabilitation.
More details will be known in a few months after architectural firm Waller, Todd & Sadler, of Virginia Beach, Va., completes its educational study of Northampton High School and determines how the building complex can be modified to accommodate students’ learning needs.
For example, more classrooms will be needed if the sixth grade is moved from the elementary schools to the middle school.
“I’m just excited about this, because it means we’re finally starting to see progress on this issue,” Lawrence said.
School board member Maxine Rasmussen agreed. “For years and years, this was just so slow and it seemed like we were making no headway, and suddenly, the committee is … all on the same page on what’s best for the kids,” she said later in the meeting.
She was referring to the high school revitalization committee that includes members of both the Northampton board of supervisors and school board, two sides that spent years at odds over the condition of the high school.
When Northampton supervisors met Aug. 27, they discussed which repairs need to be done first and how much they will cost.
Supervisor David Fauber, who is on the high school revitalization committee, said the school’s exterior walls need repair. Damaged mortar and steel joints need to be replaced to ensure the brick wall is secured to the concrete wall behind it. The job will cost about $700,000.
The 1978 addition will get a new roof and heat and air conditioning units. The leaky, flat roof will be replaced with a pitched roof, similar to the new roofs on several Accomack schools. That job will cost $3.2 million.
The committee wants both projects done next summer when no students are on campus, and the jobs will easily take three months to complete, which means “we’ve got to get rolling on it right now,” Fauber said.
The projects need to be engineered and sent out to bid so contractors can “hit the ground running” as soon as school lets out in June.
Once supervisors decided it was time to move forward with the high school project, Northampton schools’ Chief Financial Officer Brook Thomas had to act fast, since the deadline to apply for financing was in late August.
The $25 million that will be financed isn’t a “magic number,” she said. The project may cost less or more than that. “We’ll just have to cross that bridge when we come to it,” she added.
Northampton supervisors decided to take advantage of low interest rates that are staying around 2.5% or 3%, and they will borrow nearly $29 million. The funds will be obtained through the sale of Virginia Public School Authority bonds.
“If you’re going to borrow money, now is the time,” said Courtney Rogers, senior vice president and financial advisor with Davenport & Company, of Richmond, Va., who reviewed the financing plan with supervisors at their Sept. 10 meeting.
The county will spend $25 million on actual project costs, plus a $500,000 contingency, $250,000 in loan fees, $50,000 to issue the funds, and $3,125,000 in deferred interest.
Neither interest nor principal will be paid for roughly the next three years, through fiscal year 2022. For another three years, through FY 2025, the $3,125,000 in deferred interest will be repaid, $1,036,818 per year.
Principal payments will not begin until 2026, when Northampton’s previously acquired debt will drop significantly. Between 2025 and 2026, its annual debt payment will be cut roughly in half, dropping from about $2.4 million to less than $1.2 million.
Northampton County has a policy of keeping its debt service below 12% of its budgeted expenses. That figure is about 7% now and will peak at nearly 8% in 2023, when the first interest payment is made on the new loan for the Northampton High School project.
The county’s cash flow will be negatively impacted between 2023 and 2025. There will be a cash flow deficit of roughly $500,000 every year for three years. A temporary tax hike may be necessary to make up the difference during the three-year period.
The cash flow deficit will be nearly $570,000 in 2023. That could be recovered if the real estate tax rate was raised 3 cents. But supervisors cannot predict how high or low the tax hike could be or even if a rate increase will be needed at all.
Spencer Murray, chairman of the board of supervisors, said supervisors will try to make up the deficit with other revenues.
Rogers reminded supervisors that in the event of a capital need emergency that is not related to the schools, the county can tap into its undesignated fund balance, aka rainy day fund, which has more than $10 million.
Supervisors plan to adopt a resolution authorizing the financing of the Northampton High School project Sept. 24, with a public hearing Oct. 8. The bond sale is expected Oct. 22, with a closing date of Nov. 12.
