Horry County school board mulls tax hike to fund building projects

vgrooms@thesunnews.comFebruary 5, 2014 

St James Middle Overcrowding

Some students stop at lockers, some visit friends as others pass in the crowded 7th grade hallway at St. James Middle School Wednesday morning. The student population has outgrown the facilities at St. James Middle School and they now have 19 portables that Principal Dwight Boykin prefers to call "learning cabanas".

PHOTOS BY CHARLES SLATE — cslate@thesunnews.com Buy Photo

  • If you go

    What | Horry County Board of Education meeting

    When | 6 p.m. Monday

    Where | Horry County Schools District Office, 335 Four Mile Road, Conway

— Raising property taxes is one option the Horry County school board is considering to pay for proposed new schools and building expansions to ease overcrowding.

The board met Wednesday to review four new projects and three that were amended from its short-term capital plan, as well as five scenarios for funding. The building changes were proposed Jan. 27 by the district, which was asked to develop a plan that would relieve overcrowding for schools that would be more than 100 percent capacity by 2018-19.

Enrollment forecasts indicate there will be 5,600 additional Horry County Schools students over the next 10 years, said Joe Burch, district planner.

The proposed five-year plan would cost about $326 million, which is about $12 million more than the approved, seven-year, short-term capital plan. The total costs include the price tags for individual projects, as well as costs for things such as upkeep and emergency maintenance.

Board Chairman Joe DeFeo said raising taxes would be the last option, and that he didn’t think the board would consider it until they have more information about some of the projects, although board member Harvey Eisner said he would consider an increased levy.

“I’d be in favor of a millage increase to maintain the quality of our buildings – probably 2 mills,” Eisner said. “We want to be frugal, but we also have to look at what’s best for the kids.”

The four new projects that were proposed are an addition for Aynor Middle School ($6.2 million), a new middle school for the Carolina Forest attendance area ($31 million) and additions to Seaside Elementary School ($6.2 million) and Burgess Elementary School ($4.7 million). The three amended projects would:

• add a new middle school in the Myrtle Beach attendance area instead of a new intermediate school, moving the intermediate school into the existing middle school building ($33.5 million)

• add a new middle school in the St. James attendance area instead of building a new intermediate school ($27.5 million)

• add a new middle school in the Socastee attendance area instead of building an addition for Forestbrook Middle School ($27.5 million).

John Gardner, HCS executive director of accounting services, said the district has a good bond rating and can borrow $160 million without holding a referendum. The board does have some options for using money from its undesignated, unreserved fund balance, which Gardner estimated will be about $16 million, but he said using the fund balance could impact interest rates.

The five funding scenarios for the proposed $326 million plan are:

• pay-as-you-go option, no increase of the 10 mill property tax rate. The district would use current revenue. The district would have about $239 million available from total annual funding, but would be about $87.5 million short of the $326 million needed.

• issue 8 percent bonds, no tax hike. The district would have $265 million available and a shortfall of $61 million.

• issue 8 percent bonds, raise property tax to 12 mills. Available funds would be at $309 million, with a shortfall of $17.4 million.

• issue 8 percent bonds, raise property tax to 14 mills. Available funds would be at $351 million, and there would be a surplus of $25 million at the end of six years, which Gardner said would put the district in a better position for the following five years.

• issue referendum bonds, no tax increase. The district would have $337 million in available funds and an overage of $11 million. Gardner said this plan is not recommended because the debt structure would require future school boards to increase millage to retire the principal at a normalized pace.

“To me, it looks like we’re going to have to consider pulling out funding from our reserves or utilizing 8 percent bonds, and it looks like we’d almost have to increase our mills in some fashion,” said Vice Chairman Neil James, who had to leave the meeting early and missed part of the presentation. “We’re going to have to consider all things, and I believe this is a conservative board.”

James said capacity and programs will have to be considered because while some schools show capacity peaks in some years, they also eventually level off. He and other board members said there may be other options at some of these schools that can get them through those peak years without additional building, and there was some discussion of looking at which programs are really working and at space management at some schools.

No votes were taken at the meeting, but there was consensus for moving forward with four projects that have been approved: additions to Midland Elementary School and North Myrtle Beach Middle School and replacement schools for Socastee Elementary School and the Horry County Education Center. Matt Dean, the district’s executive director of facilities, said the district is moving forward on designs for elementary and intermediate/ middle schools, which will be able to work for any project that has been discussed.

The board will talk again about the short-term capital plan at its next meeting Monday night.

Contact VICKI GROOMS at 443-2401 or follow her at Twitter.com/TSN_VickiGrooms.

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