Rowan-Salisbury Board of Education
“Special” Meeting
September 6, 2011
Minutes
The Rowan-Salisbury Board of Education met on September 6, 2011 at 11:00 a.m. at the Long
Street Administrative Office with the following members present: Dr. Jim Emerson, Mrs. W. Jean
Kennedy, Mrs. Linda Freeze, Mrs. Kay Wright Norman, Mr. Mike Caskey, and Dr. Richard Miller.
Mr. Bryce Beard was absent. Also present were Dr. Judy Grissom, Dr. Walter Hart, Mrs. Delores
Morris, and Ms. Rita Foil.
Call to Order / Roll Call
Dr. Emerson called the meeting to order at 11:00 a.m. Dr. Miller officiated the Pledge of
Allegiance. Mrs. Kennedy shared the opening meditation.
Adopt Agenda
Dr. Emerson requested that the Board add a Closed Session to review and take action on a
student transfer appeal.
**Kay Norman moved to adopt the agenda as amended. Linda Freeze seconded. Unanimously
approved. (7:0)
Mr. Beard entered the meeting at 11:03 a.m.
Discussion Items
Proposed Central Office Update and Review of Pre-development Agreement
Dr. Emerson recognized Mr. Rod Malone of Tharrington Smith to give a status of the consolidated
central office and update of the pre-development agreement of a proposed central office.
Mr. Malone said that his staff met last week with the developer to iron out a couple items that were
remaining and he felt the meeting was very good and very productive. He said they were able to
get an agreement on the items that were shared with the Board earlier.
Mr. Malone said he wanted to cover the one outstanding item that needs to be clarified first. He
asked the Board members to turn to the last page of the document. Mr. Malone said the only thing
that didn’t get resolved was the submission of some of the document relative to the design of the
building and the approval by the superintendent and the Board. He advised that when the Board
receives the complete set of construction documents, everyone would be on the same page at that
time, on what would be built.
Mr. Malone said what they developed was a scenario whereby the school staff and the developer will
work together on a couple issues that have to be resolved before this can move forward, one being
LGC approval. He said as a practical matter, the document starts on page 3 of section 2.01.
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Mr. Malone said there were two key items that needed to worked through before the developer
retains RCR architecting and actually begins the design of the building at a cost of approximately
$300,000 to the developer, one being an additional conversation with the LGC. Mr. Malone said he
did meet with the LGC shortly after the last Board meeting, and in sections A and B, the criteria that
the LGC has laid out would be used in their evaluation and approval of a capital lease under the
appropriate statute.
Mr. Malone said the LGC staff would like to know how the costs of the capital lease would compare
to the costs of the county borrowing the money in the more traditional way, and the projected costs
savings. He said there would many things they would be interested in, but he felt in working with a
developer a package can be put together to answer any questions from the LGC.
Mr. Malone said one of the other pieces that will be important to the LGC in terms of the cost
effectiveness of the overall process would be the receipt of the new market tax credits. He said the
developer would take the lead on that with our assistance.
Mr. Malone said these are a couple of the first hurdles that this agreement will need to resolve by
staff and the developer before the developer hires an architect to start the project.
Dr. Emerson asked Mr. Malone to clarify that he had met with the LGC since the last Board meeting.
Mr. Malone said that they met with Mr. Vance Hollimon in the state treasurer’s office who compiles
the information for the LGC. He said they also met with the attorney for the LGC. Mr. Malone said
they met with the same people that the county finance officer had spoken with previously.
Mr. Malone said that they described the process and went through the proposal, as well as discussed
items of concern in understanding the cost compared to a more traditional financing. Everyone
agreed they all need to work together.
Dr. Emerson asked Mr. Malone to help him understand the sequence for the Board. Mr. Malone
confirmed that the Board needed to approve going forward and prepare to go before the Board of
Commissioners to request their approval next week. Dr. Emerson asked if the Board needed a nod
from the LGC prior to the Board taking a request to the commissioners.
Mr. Malone said the way the agreement is set up is to have information from the developer and then
the LGC will provide the Board with information of traditional financing in Rowan County. Mr.
Malone said there is work that the developer would need to do to present to the LGC, but before he
invests his time and effort in pursuing the new market tax credits, abd all that is needed to take to
the LGC, there needs to be a general understanding between the Board of Education and the Board
of Commissioners and the developer that this a reasonable way to proceed in the short term. Mr.
Malone advised that the agreement is attempting to lay out the road map of the steps to be
followed by the school system and the developer to get to the point of having a capital lease
proposal that the Board and the County both approve.
Mr. Malone said there were two major approvals to occur with the Board and the county
commissioners. One being an agreement like the one in front of the members now, and the other
being an actual capital lease, assuming that the staff gives the nod that they are supportive of the
concept, the new market tax credits look viable, and the developer receives a a building designed at
a price of a capital lease the Board of Education and the county commissioners approve.
Mrs. Norman said she thought that the Board was to receive information from the LGC, but we don’t
have that. She said the Board needs a viable comparison between a capital lease agreement to
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that of a traditional agreement, but we do not have that. Mrs. Norman said she was ready to
pursue what the Board needed to pursue, but there were a lot of people armed with misinformation.
She said the Board needed the facts to make the best decision based on accurate information, but
she was not sure they have that critical piece. Mrs. Norman asked Mr. Malone when he thought the
Board could expect to have that piece.
Mr. Malone said that a large part of that will be in the hands of the developer. He said when he met
with the LGC they basically gave them the nod.
Mrs. Norman asked Mr. Malone if it is possible that the Board would have to wait another month or
two. She said she would want to make sure that the Board has all of the information before they
move forward. Mr. Norman said she would like the Board to move forward quickly, but would also
like to have all of the information and for the public to have all of the accurate information before
moving forward.
Mr. Malone said an initial step was added into the agreement, which is the new market tax credit
issue and the LGC approval as a condition. These things have to be satisfied to the Board of
Education, the superintendent, and the developer before the next step of proceedings. In order to
give all parties a framework by which to operate, the proposal is to enter into an agreement that
incorporates that first step instead of handling that first step outside of the agreement.
Mr. Malone said there is a concern that there is time and effort on the developer’s part to put
together this financial analysis, and it seems to make sense for that issue to be resolved with the
developer, the Board of Education, and the superintendent.
Mr. Beard said he heard the LGC must pass on this to say that the project conforms with the
building plans and the statutes of the schools building policies.
Mr. Malone stated that the Board may need to convene into closed session for attorney-client
privilege for information that the Board should hear.
Mr. Beard said the two things that he has taken away from these discussions thus far is that one,
the school system does not have to put up any upfront money. Secondly, the building climate right
now can drive the building cost down at least an additional 20%. Mr. Malone said this is the right
market for those that can build to do so.
Mr. Beard noted that if we do this project, we should do it now to save money. He said the whole
thing to him was to move forward now because the world is ever-changing and our schools are
moving into a 21st century with more and more technology needs, and this project is best because
we don’t have to have any money up front, or ask for any tax-payer money.
Mr. Malone said a reason to continue to the move project forward with some parameters is so
everyone knows where we are going. He said part of the issue that he was running in to was that
there were so many meetings going on about this project. Mr. Malone said the meeting last week
was productive to get on the same page. He said it is important to have a roadmap for this project
to go forward, and the nod from the staff at the LGC is a key piece. He said that they had hoped to
have that previously, but now the developer has that.
Mr. Malone stated that there is no timeline within this agreement for the LGC component and the
new market tax credit component. He said once those things occur, the Board will give the
developer the nod to proceed with the next step. Mr. Malone said what we are trying to do at this
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time is to give the developer on board and commissioners a level of comfort that this is the plan and
this is how we want to proceed.
Dr. Miller said he heard that Section 2.01 is like a pre-offer. Mr. Malone said, “Yes.” Dr. Miller
stated that it may be conceivable to delete Section 2.01 and approve it today for our comfort level.
Mr. Miller said this is to say we want to have the answers to these questions first, so that everyone
could have the same data that Mrs. Norman referred to. However, this agreement has given a
roadmap of all the hurdles, all the steps, and all the agreements that would subsequently come if
this was a go. But the first core is LGC approval / tax credits?
Mr. Malone said that was correct. He said that was really the piece he did not know the answer to.
He said what he was attempting to do is to put it all in one document so that when the
commissioners and the Board approves it, this part of the discussion is resolved because everyone
would know what needs to occur.
Mr. Caskey asked if the new market tax credit had been used before by the developer. Mr. Malone
said that the developer had used this before and is very familiar with it, as is his attorney. He said
because school systems don’t get to take in tax credits, it is just not something that I’m familiar with
at this time.
Dr. Emerson asked the Board if they had any questions or comments on how they wanted to
proceed. Dr. Emerson said he felt the Board might need the answer to the tax credit issue, and the
other issue from LGC, and he would like to see the nod from LGC before, because the
commissioners may see this as a high risk.
Mr. Beard said that there is no risk except to the developer. Dr. Emerson explained to Mr. Beard
that the Board is preparing to go before the commissioners on September 19, but asked if we have
enough information to do that at this time.
Mr. Beard said he doesn’t see if it matters if the approval is now or later because if it comes in
within the budget, that’s what we agree to do.
Dr. Emerson asked Mr. Malone if the LGC needed a nod from the commissioners before they move
forward. Mr. Malone said before the LGC itself, the entity would approve it, “Yes.” However, that
approval is a more formal approval approximately a year or more from now. Mr. Malone said what
they are looking for from the staff of LGC, is something that would say that they now have had a
chance to look at the traditional financing or how the developer is planning to finance it. Having
looked at all of that, they feel like it at least passes their cursory review. They would not be able to
commit one way or another until they get the formal capital lease, the true financing documents,
and the interest rates at the time.
Mr. Caskey asked Mr. Malone if the LGC was reviewing the information now. Mr. Malone said, “No”.
However, he has provided the LGC with a copy of the proposal from developer and discussed it with
them. Mr. Malone said a road map is needed to know what the LCG would need to see when we
bring it back to them in a more formal fashion. He said there was a misunderstanding between our
reading of the statute and what it appeared they would be doing.
Dr. Emerson requested direction from Board.
Mrs. Norman asked if the Board could move into closed session.
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Closed Session
**Mrs. Kennedy moved that the Board move into closed session at 12:01 p.m. to consult with an
attorney employed or retained by the public body in order to preserve the attorney-client privilege
between the attorney and the public body. [NC Gen. Stat. 143-318.11(a)(3)], and to prevent
disclosure of information that is privileged or confidential pursuant to state or federal law. [NC Gen.
Stat. 143-318.11(a)(1)]. Mrs. Norman seconded. Unanimously approved (7:0)
The Board took a short recess.
Report of Closed Session
**Dr. Miller moved for the adoption of the pre-development agreement between the RowanSalisbury Board of Education and Barwick Associates with the contingency in section 2.01 of the new
item to be added that we proceed to the county commissioners once 2.01 A, B &C have been
satisfied. Mrs. Norman seconded the motion and called the question. Approved (6:1) Mr. Caskey
opposed.
Announcements
9/7
BOE Personnel Sub-committee Meeting/3:00 p.m./Ellis St.
9/21 BOE Curriculum Sub-committee Meeting/2:00 p.m./Long St.
9/22 NCSBA District Meeting/4:00 p.m./Cox Mill High School/Cabarrus County
9/26 BOE Meeting/5:00 p.m./Long Street
Adjournment
** Dr. Miller moved to adjourn at 12:30 p.m. Jean Kennedy seconded. Unanimously approved.
(7:0)
Dr. Jim Emerson, Chairman
Secretary
Dr. Judy S. Grissom, Ed. D.,
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