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Capital Improvement funds vs. bond dollars

western union elementary What is the difference between money that comes from a bond referendum and capital improvement funds? And what determines how projects are funded?

The difference is often based on the frequency and size of the project. Ongoing needs such as safety issues, repairs and upgrades, are satisfied through Capital Improvement Plan (CIP) money, while bigger projects, like building new schools, major renovations or additions, are better suited for a bond referendum. 

UCPS Chief Finance Officer Dan Karpinski said money from CIPs are used for ongoing projects like minor renovations and roofs that have to be consistently replaced, or technology which is purchased on an ongoing basis.

The Union County Commissioners have awarded the school district $17.7 million in CIP funds for the 2016-17 school year. These capital funds will pay for such things as deferred maintenance like HVAC/chiller replacement and plumbing issues; minor renovations like a floor replacement; purchasing school buses.  

Facilities Director Don Hughes said CIP funds do not address growth, but rather the maintenance and upkeep of existing schools. He compared this to a homeowner’s plan for renovations. 

“Smaller projects would not necessitate a home equity loan, but if one is adding on to his home, he would probably take out a home equity loan,” Hughes said. 

Both capital funds and bond dollars must be approved by the County Commissioners, but bond dollars (loans typically paid off over a 20- to 25-year period) require a public vote. 

The $54 million bond referendum came about after the Union County Board of Education identified a total of $231 million in school needs, including $9 million in furniture and equipment. They then prioritized that list by identifying the most critically needed projects. 

This prioritization of needs was based on both enrollment forecasts and the data provided by the McKibben report, which addressed estimated growth through the year 2025-2026.

The six schools deemed as having the most critical needs were Western Union Elementary School (pictured above), Sun Valley High School, Porter Ridge Middle School, Porter Ridge High School, Piedmont High School, and Monroe High School.

The bond lists about $42 million in school renovations and additions, resulting in 49 new classrooms that would increase student capacity. It also includes $12 million to build a transportation facility, which would have enough service bays to properly maintain the school system’s more than 400 buses.

The next obvious question: What if the bond doesn’t pass? 

If the bond doesn’t pass, the needs of the six schools will have to go into next year’s capital improvement project list.

The Board of Education will have to look into other options for funding for the critical-need projects. Board members will also have to work with commissioners to develop an alternate plan to address overcrowding, larger class sizes, aging facilities, and ADA renovations. 

“If the bond doesn’t pass, it will be even longer before the capital needs are met of those schools not included on this bond,” Hughes said. 

For more information about the $54 million bond referendum, go to UCPS website.



Written by: Communications Coordinator Deb Bledsoe
Posted: Oct. 19, 2016