By Michael Alison Chandler
Washington Post Staff Writer
Friday, September 19, 2008
The Fairfax County School board last night approved a plan to borrow as much as $130 million to consolidate its headquarters into an office building that the district would purchase in the Falls Church area.
The investment would come as board members are launching an exhaustive budgetary review to find savings to meet a projected shortfall of $150 million. But board members said the investment would save money in the long term, even as school officials acknowledged that costs would outweigh savings by as much as $2.9 million in the first eight years of the loan, starting in fiscal year 2013.
"This is the right thing to do, at the right time, for all the right reasons to help us support the children of Fairfax County," said board member Stuart D. Gibson (Hunter Mill).
The Board of Supervisors still has to weigh in on the deal, approved by the school board in an 11 to 1 vote and endorsed by the Fairfax Chamber of Commerce. Supervisors are scheduled to vote on Monday.
The price tag for the 35-year-old building is $52 million, and officials estimated that the total cost to buy, renovate and furnish it would be about $110 million. They are seeking to borrow as much $130 million in case costs increase.
School officials said that, without cost overruns, the purchase and renovation would ultimately pay for itself and save $22 million in current dollars over the life of a 30-year loan. But many parents at the meeting and elsewhere questioned whether the expense would bring promised savings or whether the timing makes sense, given a long list of needed school renovations.
"Does anyone believe that you can spend $125 million and it's not going to affect our schools or our students?" asked Janet Otersen, a financial planner and parent of three.
The Fairfax County Council of PTAs sent out a news release last week asking board members to hold off on voting until they could schedule a public hearing.
"We are concerned that there has been very little community input on this huge purchase," said Michele Menapace, president of the council.
The school board voted in late July to put a refundable $500,000 deposit on the building at 8111 Gatehouse Rd. and to launch a two-month architectural and engineering review. The only tenant, the American Red Cross, is scheduled to move out at the end of October. The board has until Sept. 29 to cancel the agreement without losing its deposit.
The new building would house 1,100 employees who are currently scattered among a dozen facilities throughout the county. It is adjacent to another school administration building that has 650 employees, including Superintendent Jack D. Dale.
The acquisition would be financed through a 30-year bond issued by the county's Economic Development Authority. The first $8 million payment would not be due until 2013, when officials anticipate the economy will have rebounded. They expect at least $6 million in savings before then.
School officials said the long-term savings would come mainly from avoiding lease payments and by eliminating 18 positions through attrition. They have maintained that the depressed real estate market, which is dragging down tax revenues that school budgets rely on, is creating favorable conditions to buy.