The twenty days have passed and a first high school for Lakeland is on the horizon.
Now it’s time for the City of Lakeland to apply for a $56 million USDA loan, fund the first high school in Lakeland and refinance the middle school with funds available by Sept. 1st or sooner.
Ninth graders could be starting at the new school no later than August 2022, according to the Lakeland School System (LSS) Superintendent, Dr. Ted Horrell.
The BOC (Board of Commissioners) unanimously approved a 40-year USDA (USDA Rural Development Community Facilities Loan Funds) loan May 28th as a funding mechanism to build the first Lakeland high school but citizens had 20 days to file a petition for a referendum on the funding mechanism. That 20-day deadline passed Thursday (6.20.19).
In the same meeting, the BOC also approved (by a 4-1 vote) a 12-year CON (Capital Outlay Note) for $35 million which would raise taxes 64-cents, from $1.25 to $1.89. The CON was passed by parallel vote on the chance the USDA funding device was challenged by Lakeland residents or the USDA loan was not approved.
Vice Mayor Josh Roman explained about the USDA loan: “It is a federal program with many application intricacies. We believe we qualify and will get funded but it’s not finished until all hurdles have been cleared and the credit line is open.”
Link to May story: https://lakelandcurrents.com/boc-tonight-may-28-2019-historic-night-for-lakeland-school-system/’
The petition deadline passed Thursday afternoon (6.20.19), allowing the City of Lakeland to move forward with the USDA loan process and the LSS to start the planning process.
The loan amount will not only build a $40 million high school, but refinance the CON (Capital Outlay Note) loan (about $16 million) on the two-year-old middle school. (Lakeland Middle Preparatory School.)
To fund the USDA loan without a tax increase or a minimal tax increase (perhaps four-cents), the Lakeland School Board (LSB) said it would give $700K per year of its fund balance for four years toward immediate construction of a high school in Lakeland. That money is to be used to defray a tax increase for several years. According to Mayor Mike Cunningham, the money from the School System would offset the need for a tax increase in the first years of the loan.
Originally the USDA loan was to be for $62 million and include funds for public works infrastructure projects like New Canada Road (NCR), a sewer interceptor project and road paving. However, Shane Horn, city manager, said officials from USDA suggested those projects be covered in a separate loan application and not hold up the high school project. “It was their recommendation not to include the NCR project now. We would have to update the environment work and it would slow down the momentum of the school,” he said. There is no time frame on a second loan, said Mr. Horn.
Process at City Hall now
Mr. Horn said USDA officials had a first in-person and conference call meeting June 3rd at City Hall with stakeholders including Kyle Wright, finance and human resources director; Dr. Horrell; contractors from A2H and Renaissance Group; and Mr. Horn.
He said a checklist was provided noting what must be done and documents required. He said there are a lot of steps with the federal government.
USDA has the funds, said Mr. Horn, and believes Lakeland is qualified for the funds. “They would like to close by Sept. 1st or even sooner than that,” said Mr. Horn. “They want to close before the end of September which is the end of their fiscal year. They have the resources, we are good,” said Mr. Horn.
The application has to be returned to USDA and there must be an environmental update from the middle school, said Mr. Horn. A2H is working on that.
Since the initial meeting in early June there have been more conference calls which continue every other week.
Targeted opening of high school
Dr. Horrell said, “$40 million is the amount that our partners determined would allow us to construct a high school facility that would allow for all of the educational, athletic and extracurricular programs that we would ideally like to offer as soon as the school opens.
“We are working under the assumption that the school would open with 9th grade students no later than August of 2022. Once funds have been secured, we will work with our design and construction team to determine an actual date of project completion.”
LSS work in progress
Dr. Horrell said he and Dr. Jim Mitchell, founding partner of Southern Educational Strategies, LLC, are working with architects and engineers to prepare the Preliminary Architectural Report which is a narrative and data-driven component of the application process. “We were advised it was the portion of the approval process that will take the most time,” he said.
“The total team began participating in at least weekly conference calls about three weeks ago. We are also having individual calls with the USDA representatives who have, to a person, been very professional, responsive, and supportive of our application.
“The USDA reps have set October 1st, the end of their fiscal year, as the deadline for completing the application and receiving our letter of commitment for the funds.
“Right now we’re focused on assisting the City of Lakeland in completing the application for the USDA loan, and hopeful that the funds will be secured so we can begin the design and construction process.“
From Mr. Horn
“It’s our job to fund the school. By going to a longer time arrangement (for the school loan), it opens resources to us to do other things.” He specifically mentioned that BOC members and residents talk about the condition of roads in Lakeland. “Streets remain a priority,” he said. With the CON, it was going to essentially reduce the roads budget to filling potholes,” he said.
Mr. Horn added, “This is a project USDA can do and a priority project for them. It’s a go from their standpoint.”
The City qualifies, he said, because Lakeland meets the 20,000 population threshold.
From Vice Mayor Roman
Vice Mayor Roman said the 64-cent tax increase will be left in place until the USDA credit line is opened and ready to use. “I’m being told that we expect this to happen by the October 1st deadline to give Shelby County Assessor’s office our tax rate and if that does happen, I’m happy to vote for a lowered tax rate.”
He said, “I was informed yesterday that it may have to be a manual process since the Assessor’s office is changing software but I’m confident our City Staff can get it done. Otherwise we’d have the unanimously set tax rate in place for one year and then lowered for July 2020.”
He added, “My understanding is that with the passing of the protest period they (LSB) are already working with the architects to move the process along.
“Yes, I’m excited about this opportunity to speed up several projects that invest in Lakeland’s future in addition to the full $40 million ask for the high school.”
The Lakeland School System includes Lakeland Elementary School for grades K-4 and Lakeland Middle Preparatory School for grades 5-8. Building a high school in Lakeland means LSS would have a complete K-12 system. High school students in Lakeland now attend Arlington High School through an interlocal agreement between the two cities.
Historical perspective on a high school in Lakeland
In 2014 there was a plan to build a middle and high school campus at the current Lakeland Middle Preparatory School. Funding for the combined schools was voted down in a 2015 bond referendum. The middle school was subsequently financed through a Capital Outlay Note (CON) and opened in August 2017.
A lawsuit, filed Dec. 8, 2017, sought to block tax-free lease revenue bonds approved by the Lakeland Board of Commissioners (BOC) and its Industrial Development Board (IDB) and force a referendum on any bond issue. The suit also alleged violation(s) of the Tennessee Open Meetings Act.
The suit was dismissed in Shelby County Chancery Court May 25, 2018 on mootness of the case. The plaintiffs took their case to the Court of Appeals in Jackson, TN where the dismissal was upheld earlier this month.
In the years since a high school was first proposed, there have been countless BOC meetings with resident pitted against resident, fighting for or against a complete school system in Lakeland.
Mayor Mike Cunningham was asked to comment but did not respond to the request.
