GUILFORD COUNTY, N.C. — Guilford County Schools anticipates needing an additional $170 million to cover increased costs for the planned $300 million bond projects.
The district is undertaking a massive project to repair and rebuild schools in disrepair. An independent study in 2019 identified more than $2 billion in facility needs in county schools. Following the study, a facilities master plan was developed. In 2020, voters approved $300 million for GCS to rebuild eight new school buildings, and then in 2022, voters approved $1.7 billion for repairing and rebuilding several school facilities.
At a meeting of the Joint Capital/Facilities Committee Tuesday, GCS officials said they will need about $170 million to cover cost increases due to inflation, supply chain issues, and labor shortages. Officials said they do estimate inflation when it comes to projects, but it has outpaced estimates for the $300 million projects.
The Joint Capital/Facilities Committee will meet monthly and is made up of several Guilford County Commissioners, members of the Board of Education, along with the Guilford County Manager and GCS Acting Superintendent.
According to data from the Associated General Contractors of America, between April 2020 and May 2022, prices for steel mill products increased 128%. Lumber prices went up 90%.
"We couldn’t predict this (was) going to happen," said Guilford County Commission Chairman Skip Alston. "The school board couldn't have predicted this was going to happen so we still have to be able to address the problem."
Guilford County has already issued $120 million out of the 2020 school bond. The remainder, $180 million, is scheduled to be issued in 2023.
The 2022 school bond is scheduled to be issued in three phases in 2024, 2027, and 2029.
Alston, a member of the Joint Capital/Facilities Committee said the extra $170 million may come out of the $1.7 billion approved by voters in 2022.
"I don’t think we’d have to increase taxes in order to absorb this," Alston said. "We’ve already planned over the past seven, eight, 10 years basically but really 20 years in order to pay for this debt."
At Tuesday's meeting, GCS officials said they are working to reduce the amount of extra money needed.
"We're still pushing on some value engineering," said Angie Henry, GCS Chief Financial Officer on Tuesday "We're asking and going back and relooking at everything in the projects not wanting to impact the programs but there may be some changes that can be made. The changes that we are seeing though, they are not significant savings."
Henry also added that changing designs also costs money. Alston said some of the increased cost is due to redesigns on the projects.
"We would note also that the plans that they came up with were developed in 2018 and 2019 that was before COVID. that’s when they had two schools had to be closed because they could not accommodate the kids there," Alston said. "So they went back and did some redesign work that would be able to allow kids if we had another pandemic to be able to stay in school."
Guilford County Schools released a statement Thursday about the project update:
"As a school district, Guilford County Schools (GCS) has a responsibility to build new schools that allow us to keep schools open during a future pandemic, enhance learning outcomes, and put the safety of our students and staff first. We are grateful to the voters of Guilford County who voted overwhelmingly to approve the $300 million bond referendum in 2020 and the $1.7 billion bond referendum in 2022 to address critical infrastructure needs identified in the district’s facilities master plan.
On Tuesday, August 9, members of the Joint Capital/Facilities Committee met to discuss the progress of the district’s bond-funded facilities improvements. Several factors, including labor shortages, record inflation, supply chain issues, and the war in Ukraine, have led to an unprecedented rise in costs. GCS appreciates the Guilford County Commissioners sharing our mission to create enhanced learning outcomes for our students and staff and provide impactful improvements in our community for the future of Guilford County.
GCS is excited to break ground on six school projects in the coming weeks. Early site work at each of the sites will begin this fall. We will be updating the district’s school bonds website with more updates on each project."