CHRISTIANSBURG — Officials with Montgomery County Public Schools are considering a tool that has been used more frequently elsewhere in Virginia to renovate and expand Christiansburg High School and to build a new school in the area presently served by Belview Elementary School.
Earlier this month, Thomas Kranz, MCPS’s recently hired assistant superintendent for operations, delivered presentations to both the school board and the county’s Board of Supervisors on a state-protected option that aims to help cash-strapped localities initiate various public infrastructure projects.
The Public-Private Education Facilities and Infrastructure Act, a measure passed in 2002, allows private firms to seek out capital on their own to cover work on structures such as new schools, parking decks, jails and police stations.
The firms — typically the general contractor and the financing and architectural firms — can form a single entity that takes ownership of the buildings, but not the land, and then leases the structures back to local governments.
Proposals filed under the PPEA can speed up the start of much needed projects and perform the work at cheaper costs to the locality, Kranz said.
The PPEA consideration comes at a time when the school district is pushing for multi-million dollar projects at Christiansburg High and the area served by Belview to address capacity issues at those two schools.
The school district, however, is constrained as the county, which each year decides the school budget, can’t take on additional debt for capital projects until about 2022.
The bar on the county’s debt issuance is due to debt the locality took on earlier this decade to pay for the the new Blacksburg High School and new Auburn high and middle schools.
The new Blacksburg High School was built in response to the old school’s gym roof collapsing in 2010.
The school board has agreed to continue exploring the option and Kranz has reassured them that no commitment to a proposal is official unless a contract is signed.
“There’s nothing tonight from a decision standpoint. This is just to see if there’s a desire to continue the process,” he said during a joint school board and supervisors meeting on April 30.
School board members and supervisors asked Kranz several questions on financing, the leasing, construction terms, the makeup of the firm and the ability to still use historic tax credits on Christiansburg High.
Board of Supervisors Chairman Chris Tuck said he still wants to learn about Christiansburg High’s exact historic tax credit eligibility before he voices commitment to any kind of project proposal.
Tuck said it’s his understanding that Christiansburg High’s decades-old existence makes it eligible for historic tax credits. However, he said he’s still not clear on how tax credits would work if the school gets its much-demanded expansion.
Tuck pointed to the renovation of the old Price’s Fork Elementary School, which he said was subject to very few changes on the outside to receive historic tax credits.
“We’re talking about creating a whole new wing almost, with Christiansburg High School,” he said. “That’s my concern.”
Tuck said he also wants to carefully review a PPEA proposal before backing one. He said one thing he wants to protect is the county’s bond rating, which he described as excellent.
“I want to see if it’s cost-effective over the long run, and part of my goal is to leave the county better off than I found it,” he said. “I don’t want this to become an issue 15 to 20 years down the road where we made the wrong decision and future boards have to deal with a problem that I created.”
School board Vice Chairwoman Connie Froggatt voiced a more supportive stance for a PPEA proposal.
“I’m excited at the possibility of at least doing that with these projects,” she said, referring to Christiansburg High and a new elementary school in the Belview area. “It just allows for much more speed in getting projects up and running.”
The new Blacksburg High and Auburn projects took advantage of some PPEA measures, Froggatt said. Those projects didn’t exercise the financial options allowed by the act, but the pace of the projects was accelerated, she said.
Because Blacksburg High and the Auburn schools didn’t depend on the financing allowed by the PPEA, none of those buildings are privately owned, Froggatt said.
Work to improve Christiansburg High’s athletic fields has already started, but the greater plan calls for the addition of a new academic building and gym at some point during the next decade.
Factor in the construction of a new elementary school, and the Montgomery County school district is looking at more than $100 million worth of projects to address needs at Christiansburg High and Belview.
Kranz himself was previously a top executive for Richmond Public Schools, which he said strongly considered the PPEA route in its recent discussion to overhaul much of its decades-old infrastructure.
Kranz said Richmond schools elected not to pursue a PPEA proposal due to officials thinking they could do the work in a more efficient manner.
The PPEA allows firms to submit a so-called “unsolicited proposal” to any public agency or local government and begin negotiating a price and contract.
That process differs somewhat from the typical bidding process where local governments identify projects and ask outside firms to submit a price and proposal on the project.
Local governments, however, are still required to provide at least 45 days for competitors to submit offers.
Under the PPEA, the firms and the local government can negotiate a contract that gives the locality some flexibility with paying back the money the firms initially spend on the project, Kranz said. If the locality experiences some payment issues down the road, the contract’s terms can be re-negotiated, he said.
It has been previously reported that between 175 and 200 projects in Virginia were estimated to have been completed under the PPEA.