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The story of $102 million

A look at how KCSD has managed its facilities equalization project

Posted: November 26, 2011 4:02 p.m.
Updated: November 28, 2011 5:00 a.m.

When Dr. Frank Morgan applied for the superintendent position with the Kershaw County School District (KCSD) in February 2007, he spent a weekend driving around the county looking at the school district’s facilities. The real surprise when he pulled up to one of the county’s high school’s was not what he found, but what he didn’t find.

“I said, ‘Where’s the track?’” Morgan said of Lugoff-Elgin High School. “I had never seen a high school that didn’t have an official track -- never, not in my whole career.”

Morgan wasn’t the first person to notice that the county’s public schools were in need of upgrades and renovations.

A year earlier, the Kershaw County Board of School Trustees approved the first phase of the new facilities equalization program, a $102 million initiative earmarked for construction-related projects on school district facilities. Now, sitting in the superintendent’s office five years after trustees passed the equalization program, Morgan said the school district managed to complete all nine construction projects on the original Phase I project list, but will complete an additional 13 construction projects by the end of the phase.

“To get as much as we got out of $102 million is nothing short of a miracle,” Morgan said. “How we managed these projects is a model for governmental entities.”

The need for improvements

It all began with an athletic facilities equalization committee, said KCSD Director for Operations Billy Smith.

In 2004, a committee of teachers, administrators, parents, students and community stakeholders came together to address what Smith said were “inadequacies of the school district.”

It didn’t take long for the school district to hire Heery Consulting Inc. to conduct a district-wide facilities study of KCSD facilities, as well as a demographic study and program review. The detailed report listed all of the construction work that was needed at each of the school district’s 20 schools, and then divided those projects into two phases.

The first phase included the construction of two new middle schools, athletic and wellness centers for all three high schools, and auditoriums for North Central and Camden high schools; renovations to three elementary schools; and the conversion of the old Lugoff-Elgin Middle School into a Lugoff-Elgin High School annex.

It all carried a $100 million price tag.

How nine projects turned into 26 projects

In April 2006, school board trustees approved the facilities plan for Phase I using funds provided by an Installment Purchase Plan (IPP) -- a plan where funding is provided through the Kershaw County Public Schools Foundation, a non-profit corporation established by the school board and made up of local citizens.

A 2006 PowerPoint slide on the KCSD website says that under IPP, the “school district makes payments to (the) non-profit organization to acquire renovations and new schools, which (the) non-profit organization uses to pay off bonds sold to finance the facilities plan.” The IPP was not put before voters as a ballot referendum.

KCSD Chief Financial Officer Donnie Wilson said waiting to hold a referendum could have resulted in even higher construction costs.

“When the Heery folks came up with the assessments, they had several charts and one showed that if we waited this many months than the cost would go up ... if we go to referendum and it’s a year and a half down the road it would go to this amount,” he said. “And that’s simply because of inflation of the construction costs. Had we gone (with) the referendum, any numbers that we would have used going into the vote would have immediately been no good anymore. That was the impetus behind using what was available to us without going to referendum -- it was our fear that the longer that we would wait, the fewer things we could do.”

What many people aren’t aware of, Morgan said, is that the school district began to work on Phase I at “just the right time,” when the economic downturn brought lower construction costs.

“On the construction side, it was just the right time. When you start to get 15, 20 and 30 contractors bidding on jobs, you’re going to get good numbers,” Morgan said. “The market was right -- we just hit that right.”

Hiring project managers to work for the district helped also helped save more money, Wilson said.

“The lines in the past were blurred -- we have had construction projects before and without exception we had hired a management company to come in and manage the projects,” Wilson said. “This time, we selected our project managers and hired them as employees. They worked directly for us and no one but us. It doesn’t sound like it was that big of a deal, but it was a huge deal.”

Wilson also said that when the school district delayed the start of several projects, the district continued to invest funds in “fairly high interest rate instruments,” netting an extra $11 million.

Morgan said the district has completed more than just the nine construction projects on the original list. To date, the school district has completed 22 projects and is currently working on an additional four projects.

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