Federal Funds Free Cash For New Academy Building – Brevard, NC
Last updated 4/19/2021 at 3:23pm
Due to the availability of approximately $470,000 in federal funds to deal with learning loss related to COVID-19, Brevard Academy: A Challenge Foundation Academy may be able to reallocate some of its own funds and pay outright for a proposed arts/music building.
School Director Ted Duncan informed the school’s board of directors Wednesday evening the federal government has allocated two non-competitive ESSR (eligible school system reporting) grants to the school.
Brevard Academy would receive two allotments: one of $145,000 and another of $325,000.
“This is all money coming from the federal government for coronavirus relief in terms of learning loss,” said Duncan. “It has to address learning loss and it has to address impacts from the pandemic. It’s very rare to see federal money say this: ‘You can use this on existing staff.’”
The $145,00 does not have to be spent until September of 2023 and $325,000 does not have to be spent until September of 2024.
Duncan said, however, “All this money can be spent next year to address learning loss. There’s a lot of flexibility in how you can spend the money.”
“You do have to put out a plan as to how you will use this money,” he said.
He said the plan would be similar to those the school has had to create in order to receive Title I and other coronavirus relief funding.
Duncan said the school could use the federal funds to offset personnel costs, the largest expense for the school.
The money recouped from those costs could go into a large capital project, such as beginning and completing the music and arts building by Deltec.
Duncan also noted that with a “very healthy surplus” and “very healthy cash on hand,” as well as the $470,000, the school could have enough money to pay for the building without a loan from the USDA or private bank.
Board member and treasurer Lee Burgess agreed with Duncan’s assessment.
“A lot of this money that we are going to be getting, we were already going to be spending anyway,” said Burgess.
By taking the money that already had been set aside for additional instruction to compensate for learning loss and using it toward a new arts/music building, Burgess said, “it gets use close” to being able to pay cash for the building.
“We might just do it without a loan,” said Burgess.
He said if the school could pay for the building on its own, it would not have to carry another debt and work on the project could begin much sooner.
“We would be able to do it a lot faster,” said Burgess. “All the (ESSR) money should come to us by June 30.”
Duncan said the school’s strategic plan calls for it to have 55 days of cash on hand – the amount of money needed to cover all costs for that period without receiving any more revenue.
“We will more than surpass that this year,” said Duncan, adding the school would have a “serious surplus” of money next year.
He said the school would have until June 20, 2023, to rebuild its cash on hand to cover 55 days, or at least the state’s requirement of having 30 days cash on hand. He noted that by addressing the capital need now, the school would recoup that money in future budgets.
“That’s debt free. Construction costs only go up, and, as we well know, space is a huge need for the school,” said Duncan. “That would be the direction that I would encourage the board to go.”
Board Chair Mark Campanini asked what the downside is if the school reallocates its money that it had already planned to spend on learning loss instruction toward a new building.
Duncan said that since the federal money does not have to be spent immediately, he believes “there won’t be a lot of extra funding coming in future years to address learning.”
“The downside is if you spend all that money on personnel now, then you don’t have that money in the future,” said Duncan. “But you’re knocking out a major capital project and you can start to divert funds back this other way. To me that is the biggest downside. You don’t have this money for personnel in the future or for needs in the future if you spend it all this year.”
Duncan reiterated that many of the positions the federal money would fund the school already had planned to have in its budget.
He said the board might have to make some tough personnel decisions next year, but hopefully the pandemic would be past the following year and some of the positions needed to address learning loss may no longer be needed.
Burgess said he thought there would not be a problem in the future because the federal money would be spent on “people already in the building.”
“We’re certainly going to be able to staff the school in a very effective way, so I don’t see that even as a downside,” said Burgess. “I don’t see a lot of downside to it from a fiscal standpoint.”
Board member and Facilities Committee Chair Adrienne Casteen said the school has needed more space ever since it moved to its new campus on Hendersonville Highway and a new arts/music building would help address those space needs.
Campanini asked that if the school were able to pay cash on the new building, when would they be able to break ground on the building. Burgess said since the school would have the federal funds by June 30, they would know how much money they have on hand and how much the new building by Deltec would cost.
“If the numbers line up, then let’s go,” said Burgess. “There shouldn’t be much of a holdup on our end if we decide to go this route.”
Board member Jamie Atkinson said, “Building things right now is super expensive” and wondered what impact that would have on moving forward with the building.
“We quoted this thing, but it’s been a couple of years,” said Burgess. “We think we can handle this, but we’ll also need to get firmer numbers before we decide to go with it. Based on what we were told a few years ago, and inflating it a little bit along the way, I think this is definitely a realistic possibility.”
Campanini said it was his understanding Deltec structures are primarily pre-fabricated.
Casteen said an exterior shell comes in quickly “and then they have to build out the interior. That would be where it would slow down the process a little bit.”
In regard to financing, Duncan also said that people come forth to donate once they see a project in motion and the school could recruit donors “within the time and scope of this project” to help offset some of the costs.
He said if the board chooses to finance the new building on its own, the timeline would not be constrained by funding from the USDA, which could take two to three years, or a private bank.
“Who knows how long that could be?” he said of receiving external funding.
“This is pretty unbelievable news,” said Duncan of the ESSR funds. “The flexibility that you have with this, and the amount of money, it’s really phenomenal. It’s really great that schools have been prioritized in this funding because this does not happen very often. This is rather amazing, the flexibility that we have.”
In a related manner, the board unanimously approved a grant writing contract with Acadia for the ESSR grants. Due to the expediency of applying for the grant, the grant writer’s fee has increased from 5 to 7 percent.
•Assistant Director Anthony Johnson reported that Brevard Academy is officially the first Blue Zone certified school in all the Carolinas.
“It means great things to come,” said Johnson.
He said there is the hope of adding a walking trail and possibly a connection from the school to the proposed Ecusta Trail.
Atkinson asked if there were any safety concerns about having a trail the community would use.
Johnson said School Resource Officer Jenny Light would be involved in any plans regarding a trail.
•Burgess reported the projected surplus for the end of the school year is $203,937.
•Duncan reported that all members of the school soccer team in which a COVID-19 outbreak had occurred are out of quarantine, and the school has had no new cases.
•The board unanimously approved the design plans, pending any alterations required by county Building Department, for a bridge over a creek on the school property. Funds from the PTO are expected to cover the costs of the bridge.
•The next board of directors meeting will be held Wednesday, May 12, at 5:30 p.m. with a work session scheduled for 5 p.m.