The Alleghany County Board of
Commissioners and the Alleghany Board of Education met in special session on
Monday, September 17, 2007, at 5:30pm in the Commissioners Meeting Room of the County Administration
Building, 348 South Main Street, Sparta, North Carolina.  The purpose of this meeting is to
discuss school facilities and the QZAB projects.

Present:  County—Chair Ken Richardson,
Vice-Chair Warren Taylor, Commissioner Randy Miller, Commissioner Doug Murphy,
Commissioner Milly Richardson, County Manager Don
Adams, and Clerk to the Board Karen Evans.  Board of Education—Chair Clarence
Crouse, Vice-Chair Betsy Dillon, Faron Atwood, Mitch Franklin, Joel Souther and
Superintendent Dr. Jeff Cox.

Chair Ken Richardson called the
Commissioners’ meeting to order at 5:40pm.

Clarence Crouse called the Board of
Education meeting to order and asked for a moment of silence.

Chair Ken Richardson turned the
meeting over to the Board of Education.

Clarence Crouse stated that they
want to talk about the middle school concept.  He reviewed prior conversations about
the middle school concept with the conversation being left to come back to the
Commissioners when more money was available, and it is their understanding that
the General Assembly opened up additional money by the transfer tax or
additional sales tax.  He stated
that their purpose of this meeting is to discuss with the Commissioners about
where the Commissioners see the Board of Education going financially.

Mitch Franklin stated his
appreciation for the opportunity to meet tonight and the support from the
Commissioners.  He talked about they
have been working on saving money and have an alternative plan.

Commissioner Warren
Taylor asked about costs for the revamped plan.

Mitch Franklin stated preliminary
numbers are between $5,000,000 and $6,000,000.

Commissioner Doug Murphy asked if
the new plan is 7-8 grades or 6-8 grades.

Mitch Franklin stated that they are
open to both.

Dr. Jeff Cox
talked about looking at 6-8 grades, keeping the playground and parking areas.  He stated that the Board of Education hasn’t
taken action on Mr. Franklin’s plan.

Faron Atwood talked about the plan
has modest renovations at the auditorium.

Commissioner Warren
Taylor asked if the recurring costs have changed.

Dr. Cox stated that there
haven’t been any changes.  He
reviewed for the Boards that the recurring costs started around $900,000 and
they worked to decrease it to around $600,000.  He further reviewed that the recurring
costs are needed to hire additional staff that would be necessary to offer the
necessary programs.

Commissioner Doug
Murphy and Dr. Cox talked about the recurring costs includes staff
and maintenance costs.

Mitch Franklin talked about taking
the building costs down to $5,000,000-$6,000,000 from $10,000,000-$12,000,000.  He stated that they could look at having 7-8
grades with only minimal renovations to the auditorium.

Commissioner Milly Richardson asked
how many additional personnel will be needed.

Dr. Cox stated that he would have
to get the exact numbers.  He reviewed
some of the new positions.

Commissioner Milly Richardson and
Dr. Cox talked about recurring costs will increase each year.

Mitch Franklin reminded the
Commissioners that they are looking at the same amount of recurring costs for
the three schools.

Chair Ken Richardson talked about
each Commissioner will be talking on their own behalf because the Board
hasn’t taken any action about what to do with the additional monies.  He further talked about putting the
issue to the voters.  He explained
that he wants to reduce debt to make it easier to present the Board of
Education’s plan and they want to make it more favorable to the voters by
showing that the County is in a better financial situation to pursue what the
Board of Education is wanting.  He
talked about the General Assembly gave the Commissioners the option to do
nothing, have a referendum on the additional sales tax and/or the transfer tax.  He explained the difference between the
sales tax and transfer tax and how each one impacts the County.  He reiterated that each Commissioner is
speaking as an individual not as a Board because the Board hasn’t taken
any action yet.  He explained the
timing of a referendum being possibly the Spring election.

Mitch Franklin stated that he would
be willing to help with the referendum.

Commissioner Warren
Taylor explained that both revenue sources are not constant
since they are tied to the economy.

Clarence Crouse stated that they
understand the Commissioners’ needs and what the Commissioners’ have
to go through.  He asked how the
Board of Education plans for the future including their immediate needs.  He stated that they are looking for
direction on how to proceed.  He
talked about wanting to work with the Commissioners to address all of the needs;
program wise and facility wise.  He
stated that the General Assembly talked about using a portion of the money for
school needs.

Chair Ken Richardson explained that
if the County uses the $500,000 Medicaid money to pay off loans that were
borrowed for school facilities it would be used for the schools.

Commissioner Doug Murphy and Mitch
Franklin talked about needs there are for all of the schools if the middle
school don’t happen including Glade
Creek Elementary
School is out of space now, and they are land
locked with water/sewer issues.

Commissioner Doug Murphy asked the
Board of Education what is their timeline.

Faron Atwood stated that they don’t
have one because they are waiting on the financing for the projects.

Chair Ken Richardson talked about
the $2,000,000 QZAB funds and being supportive in keeping the QZAB projects exactly
as they were outlined to the Commissioners.  He stated that if the Board of Education
prepares a plan to bring to them then the plan would be put to a referendum.

Faron Atwood and Chair Ken
Richardson talked about the plan being a separate referendum than the
referendum about the land transfer tax.

Mitch Franklin stated that he
thinks it is smart to use the additional funds to pay down debt.  He talked about working towards passing
the land transfer tax in order to get the middle school underway.

Commissioner Doug
Murphy and Dr. Cox talked about QZAB monies can’t be
used for new construction.

County Manager
Don Adams explained how the laws for
the QZAB funds have changed.  He
reviewed his discussions with the Commissioners’ earlier today regarding
the choices about obtaining a QZAB loan.    He explained that a loan with
LaSalle Bank will not be 0% interest as QZAB loans have been in the past.  He stated that he recommended to the
Commissioners to wait an additional month to find out whether BB&T will be interested
in QZAB loans because currently LaSalle Bank is the only bank that he knows of
that will offer QZAB loans.

Commissioner Doug Murphy talked
about waiting 30 days may enable the use of the entire $2,000,000.

County Manager
Don Adams talked about the
discussions started out as renovations to all outlying schools rather than a
middle school and there are numbers that show each scenario.  He reviewed the history of the Board of
Commissioners and Board of Education’s discussions including starting the
process to put the middle school on a referendum and going to the Local
Government Commission for permission to construct a $9,000,000 middle school,
which would have maxed out the County’s debt.  He talked about the importance of fiscal
responsibility to the citizens of Alleghany
County rather than obtaining
the Local Government Commission’s (LGC) permission because the LGC has
already given their permission prior.
He talked about he doesn’t see how the Board of Education can say
what to do about the elementary schools until the middle school concept has
been decided.  He said that the main
issue is do both boards support the middle school concept and if so, how does it
get funded.   He reviewed the options before the Commissioners.  He talked about this is exactly where everyone
was four years ago.  He said he
thinks the only way to move forward is to decide whether a middle school is a
valid concept or not.

Commissioner Warren Taylor talked
about at the last meeting; the Commissioners decided to go with Board of
Education’s decision about the middle school, and everyone left the meeting
about how to come up with the money.
He talked about the Commissioners have got to see how the money lines up
with the new revenue options.  He
stated he still supports the middle school concept.

Chair Ken Richardson talked about
the QZAB money would be used to fix facilities regardless of whether a middle
school is built or not.  He said if
the Board of Education recommends a middle school; that’s fine, but he will
not approve $5,000,000-$6,000,000 without putting it on referendum.  He said he doesn’t think the
Commissioners are holding up the project because the County needs the citizens
input.

Faron Atwood asked if this is the entire
Board’s opinion.

Commissioner Randy Miller and
Commissioner Milly Richardson stated that they agreed with Ken Richardson.  Commissioner Randy Miller stated the
need to let the residents decide.

Commissioner Doug Murphy talked
about putting QZAB monies towards renovations.

Dr. Cox stated that QZAB monies are
fixing items now.  He talked about they
have started enforcing district lines and the impact on Glade Creek
Elementary School, which
is at capacity.  He further talked
about they may be faced next year with a mobile unit.  He gave an example of Glade Creek
Elementary School adding
classroom space.

Commissioner Doug Murphy asked has enforcing
district lines helped Sparta
Elementary School.

Dr. Cox stated that it has helped some
because approximately 40 kids moved.
He said he couldn’t say for sure how much it helped.

Commissioner Milly Richardson talked about she remembers that
approximately 125 students were in the wrong district.

Dr. Cox explained the number was around
119-120.  He further explained that
the Board of Education made a decision to allow students that were in 4-8 grades
to stay at Sparta
Elementary School and
PK-3 grade would have to move to the appropriate district.

Commissioner Randy Miller asked if
approval was given right now with the money in place how long would it take to
build a middle school.

Mitch Franklin stated that the new
plan could be built in 12 months and the other plan would be about 18 months.

County
Manager Don
Adams asked about if boards are looking at going with 7-8
grades are the space needs met at Glade
Creek Elementary
School and Piney
Creek Elementary
School.

Dr. Cox stated that it would currently
but who knows about the future.

Commissioner Doug Murphy talked
about both scenarios would satisfy space needs currently.

Dr. Cox stated that additional cuts
would hurt rather than help with the situations.  He used Glade Creek
Elementary School as an example.  He said that they can’t go forward
with any plans until they know where the Commissioners are.

Mitch Franklin stated if this is
going to referendum in May, they will help get it passed.

Commissioner Warren Taylor stated
that the Commissioners need to have a workshop with the County Manager
to look at financing and then meet with the Board of Education before setting
the referendum.

Faron Atwood asked the
Commissioners what numbers they want to see.

Commissioner Warren Taylor stated
that the Board of Education has given the Commissioners a figure of $5,000,000-$6,000,000
and $600,000 recurring costs.  He
further stated that the Commissioners need to look at the new revenues that will
be coming in and how they match up plus the need to look at that information
before setting a referendum in the Spring.

Commissioner Doug Murphy and Mitch
Franklin talked about the numbers are based on current construction costs.

Commissioner Warren Taylor stated
that the previous board voted to start the bond process, and then the Board of
Education decided not to go forward.
He further stated that now there are these new revenue options that have
to be reviewed.

Dr. Cox compared the county’s
situation last time versus this time.
He talked about the additional revenue sources including the Medicaid
relief, understanding the County will be looking their safety needs, and how the
new revenue sources could be applied towards the middle school.

Commissioner Doug Murphy and
Commissioner Warren Taylor talked about the voters will ask how much this
action will cost them and that question can’t be answered right now.

Mitch Franklin stated that is exactly
the reason that it was delayed the last time.  He further stated that with the new
revenue options that this is an opportune time to move forward.

County Manager
Don Adams quickly reviewed the scenarios
of the Medicaid relief and the transfer tax over the next five years.  He reminded everyone that these assumptions
are based on unstable projections.  He
reviewed the costs of a $5,000,000-$6,000,000 loan with $600,000 annual recurring
costs, and a 15-20 year loan will be approximately 0.04¢ on the tax
rate.

Dr. Cox stated that is better than
the projections of 10¢-12¢ last time.  He talked about differences in the tax
rate now.  He further talked about
how the Board of Education has worked on reducing the costs.

Commissioner Doug Murphy stated
these are the questions that the Commissioners are going to get.

County Manager
Don Adams stated that the referendum
issue is important to the Commissioners to know which plan is going to
referendum because the Commissioners have been presented two different options;
$5,000,000 or $9,000,000.  He stated
that the Commissioners have to have discussions about a middle school because
that is a change in policy about how the school system is funded; 5-school
system versus 4-school system.  He
talked about if the Board as a whole is in favor then a $9,000,000 plan versus
a $6,000,000 plan will change the discussions.  He reminded everyone that $9,000,000
will max out the County’s borrowing ability and limit the capacity for
the next five years.

Faron Atwood talked about how hard they
have worked in trying to create a plan that the county and the Commissioners
can live with.  He further talked
about they have reduced the costs, worked hard to locate the QZAB funding in
order to take those needs off of the plans.

Commissioner Milly Richardson left
the meeting at 6:40pm.

Chair Ken Richardson suggested on
the third Monday in October to have another joint meeting.  He stated that if the Board of Education
has made the decision about a middle school, then present it to the
Commissioners and let the citizens decide on the issue and if the citizens
agree then the Commissioners have to decide how to fund it.

Clarence Crouse stated that the
Board of Education needs to talk about the possibility of a referendum.  He further stated they need to look at the
figures to make sure they are accurate.

Mitch Franklin talked about having
the workshop together.  He further
talked about the architect coming back with numbers of $5,200,000, which
includes the site and everything.  He
said that they have done a lot to make sure this is something that fits and is
something the county can afford.  He
reiterated that they can work it out together.

Chair Ken Richardson explained the
differences in the Commissioners workshop and Board of Education workshop.

Mitch Franklin, Faron Atwood and Commissioner
Doug Murphy talked about the 7-8 grades versus 6-8 grades, which is the Board
of Education’s decision.

County Manager Don Adams stated that he brought the point up about
7-8 grades or 6-8 grades because the reduction in the number of students and the
possibilities of the Board of Education coming back two years from now to ask for
additional money for Glade Creek Elementary School because they are out of
space.

Dr. Cox stated that they prefer 6-8
grades but if 7-8 grades are the only way to build a middle school, they would
go with the 7-8 grades.  He further stated
that they need a number to work towards if the Commissioners support the
concept.

Commissioner Doug Murphy asked if
he understands that everyone is talking about $5,000,000-$6,000,000 and $600,000.

Faron Atwood stated it isn’t
because the Board of Education needs to go back to talk about what plan they
want to provide to the Commissioners.

County Manager
Don Adams talked about repeating
discussions previously held about how much money is enough.

Mitch Franklin stated that the
Board of Education isn’t looking at $9,000,000 anymore because that was
the reason to look at the new plan to make this project as cost efficient as
possible.

Dr. Cox stated that he received the
architect’s call literally on the way to this meeting.  He talked about the need to get back
together and discuss what they want to give to the Commissioners.  He asked is there continued support from
the Commissioners to move forward with the middle school.  He talked about at the last meeting all
five Commissioners supported the middle school but funding was the dilemma.

Commissioner Doug Murphy stated
that the Commissioners would still have to look at these numbers and look at the
recommendations.  He further stated
that he supports the middle school but the Commissioners still have to look at
the numbers.

Commissioner Warren Taylor talked
about the Board of Education is going to meet and then the Commissioners will
have more discussions and then both boards meet in a month.

Mitch Franklin asked regardless of the
presented number/plan, the Commissioners are going to referendum.

The Board of Commissioners agreed.

Dr. Cox talked about using part of the
transfer tax to go towards the middle school instead of the middle school being
additional taxes.  He stated that if
a portion of the land transfer tax was applied to the schools, it would help on
both referendums.  He talked about
conversations at the General Assembly with Medicaid relief and additional
revenues to give some assistance to the public schools.

Chair Ken Richardson stated that
the next joint meeting will be at 5:30pm on October 15.

The Board of Education thanked the
Commissioners.

Being no further Board of
Education’s business, Betsy Dillon made a motion to adjourn the meeting
at 6:50pm.  Mitch Franklin seconded
the motion.  Vote 5:0.

Being no further
Commissioners’ business, Commissioner Doug Murphy made a motion to
adjourn at 6:51pm.  Commissioner Warren Taylor seconded the motion.  Vote 5:0.

Respectfully Submitted,

Karen Evans

Clerk to the Board

Attest:

Ken Richardson

Chairman