Joe Bryan on the Wake County school board's hiring a lobbyist: If we’re going to keep score, we’re going to win

Wake County Board of Commissioners Chairman Joe Bryan and county manager David Cooke met with the editorial board and some newsroom folks today to chat about things. Perhaps it’s not surprising that the county’s relationship with the school board was the subject that took up most of our time.

Here are my notes of the meeting. They are NOT verbatim.

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Joe Bryan: My primary goal is to have a successful school bond issue this year. There’s not a higher priority than a successful school bond issue. We set goals each year. They’re generally about economic development, jobs, mental health. At the beginning of my 10 years on the board of county commissioners, I have to say this is the very best year Mr. Cooke has ever had. I say he’s the best manager in America. This partnership on mental health, getting UNC Hospitals to help with our most critically needy people who need these services ... the theme of what I hope the board will look to do is building partnerships, starting with the Wake County public school system and bringing in the mayors, letting us know what’s going on in their communities and how the county can help strengthen that.

Q: What’s your reaction to the school board’s decision to hire a lobbyist?

Bryan: My reaction is if we’re going to keep score, we’re going to win. Our goal is to be able to own, maintain and build schools. We hired a lobbyist already. We hired Fetzer, at $5,000 a month, $25,000 maximum. We already met with Sen. Hunt. We’re going to have legislation ... it affects all 100 counties; it’s not unique to Wake County. Look back to 2000, to the report that came out of our facilities committee after the first failed bond issue. It said there should be authority. There’s a lot of conflict because of this alignment. I think once this is resolved, there will be a lot more opportunity for better partnerships. I’m not surprised they hired a lobbyist. It’s going to be a major battle.

David Cooke: That goes back more than a decade, the issue of owning, building. Many counties accomplished this through interlocal agreements with school boards. There are counties in this state who already do that. The counties own the sites. The counties have gotten into building and maintaining. The previous school board and the superintendent were working toward that aim, to move that ownership of owning and building schools. It had already been a plan. The new school board message back to the county is that they’re not going to do that.

Bryan: There’s a number of technical reasons. Who’s more likely to maintain the facility? Instead of money being siphoned off to be used for operating. We have the liability, but we don’t own the asset. We’ve gone through with checks and balances over 10 years. We’ve been more willing to walk away from a deal to negotiate better. To be able to do these joint-use agreements with municipalities and it actually be a partnership .. There’s, there was an Apex school one time $8 million. We eventually bought it for $4 million. Why do we need to replicate two real estate departments? Why do we have to keep having these battles? We want to make sure the property is properly maintained when we’re facing larger school bond issues in the future. It doesn’t matter whether it’s a Republican school board or a Democratic school board. It takes two people to partner. We have been unable to reach that successful partnership. Realistically, there’s a potential, not that the public has any faith in any of us elected officials, I think the public would see with the bond issue who they’re more likely going to entrust with another billion dollars in bonds.

Q: Do you get in the assignment business then?

Bryan: The schools will tell us. The schools will still draw the circles. They’ll tell us we need an elementary school, a high school in this general area, and then we’ll go out and build the school. We’re not interested in ... we want them to focus on academics and programming inside the school. We’re only interested in the building and maintaining of the schools.

Cooke: Right now they draw the circle and send real estate staff to look at sites in that area. The only difference is the county would be finding the site in that area.

Q: Will any of this lead to more year-round schools?

Bryan: In 2005-06, we developed the last school bond issues jointly and had all those discussions about variables, just like now. The superintendent told us they need the equivalent of $1 billion in construction, and half more in renovations, so $1.5 billion. Do we have discussions about how to have additional capacity? Absolutely. Would it involve discussions of some schools potentially being year-round? Yes. It has to fit into what we can reasonably ask the public to invest.

Cooke: Remember, they identified that all new schools would open as year-round and they converted some old schools Fast forward, they didn't open all those schools year-round, and they went back and converted some back. That responsibility is going to stay with the school board.

Bryan: We’re just trying to implement what Harvey Schmitt and the Wake Ed Partnership told us to do. They’re the ones who told us they wanted us to own and maintain the buildings.

Q: What’s the real benefit here?

Cooke: Clearly we see there’s an efficiency to be gained. Right now any deal has to go through two staff processes, goes to two boards for the same decisions. A lot of times we’re not even a part of the negotiations. When the county walks away, we’ve ultimately gotten better deals. There’s an efficiency there in real estate. There’s redundancy there.

We have a construction department. They have a construction department. We build all sorts of facilities. They build schools. The big one I think is hard to quantify is we are ultimately responsible for all the money that goes into the life cycle cost of a facility. One of the only requirements that the county has, a state requirement, is that we fund the maintenance and utilities of all the schools. We turn over money to the school system, and we believe they’re going to allocate money to maintain those facilities. We’ve tried to get an interlocal agreement that they would not move maintenance money to operate the system. It’s hard to quantify, but if one entity owned the life cycle of the facility, that entity has in its best interest to make sure that life cycle cost is the lowest possible. Right now, the county is 100 percent responsible for all the capital infrastructure for schools. We fund for maintenance, but the maintenance goes through the school system

There’s a discipline when you have the life cycle cost of the facility to keep those costs down for the long term.

We do annual assessments of our facilities, and we evaluate what we need to put into facilities annually so you don’t end up five years from now needing major repairs to a building.

Bryan: It would have the potential of taking away a lot of conflict between the two boards so that we can all get back to what we’re all interested in, which is academic excellence. Right now it’s structured for conflict. This is a way to at least potentially create a scenario, this is not a political move, this is a technical issue. A conflict is there, and is there a strategy or structure we could get to that would be a better model? We believe this has the potential to be a better model.

Cooke: From an accounting, balance sheet, financial statement perspective, we carry all of the liabilities on our books. We have about $2 billion in outstanding debt, 80 percent of that is for the school system. We don’t own any of the assets in the way the current model is set up, so we have a negative balance sheet. It’s in the red. We’ve got to explain this all the time to the rating agencies. We’re one of the only states that does this to counties. We explain that’s just the way it’s set up. We’ve been able to maintain a triple A credit rating, but just from the balance sheet, it doesn’t make sense.

If you move this responsibility of real estate and construction from the school board, how much time would that free up for the school board to concentrate on academic success?

Q: What’s the squabble over the school board’s reserve fund?

Bryan: Those are ongoing debates. The county commissioners view that we’re the banker. We have about $180 million in reserves, 8 percent. We’ve got the reserves. We don’t think they need reserves. We’ll be that reserve. About three years ago, they came up with a policy that they would keep 6 percent of county appropriations in reserve, just under $19 million. That is their stated policy. With adoption of that policy, the last two years, they’ve not followed the policy. They’ve had $35-$40 million in reserve vs. $19 million. They keep moving the goal post now. The issue is we think we’re the backstop. If we’re not the backstop and your policy is 6 percent, at least acknowledge that, that you’re not following your own goal. The Wake County Board of Commissioners prides itself to allocate to our priorities. When they constantly come to us and say we need more money on whatever the operating budget is and we’re going to spend our reserves, and you find out at the end of the year they have even more reserves than they did ... Around the reserve issue, there needs to be a standard policy, stay with the policy, get it agreed upon and get it off the table.

I will also say they’ve been in this environment, recognizing what’s going on at the federal level and the state level. They’ve done a very good job of trying to manage and keep a little extra in this climate, but I’d like them to follow their policy.

Cooke: The only way the can accumulate a fund balance is from local money. The state doesn’t allow them to keep any money they don’t spend from the state. And the feds don’t let them keep any money. The issue has been that we want to encourage proper spending and behavior. If they don’t need to spend it, they shouldn’t. It’s a good thing when they save money, but when you get into the budget, we need so many additional dollars.

Bryan: And we don’t want people spending one-time money on ongoing issues as well.

Cooke: We give the school system $318 million. We send them 1/12th of that every month. We know what they asked for the money to be spent on. We don’t try to micromanage the expenditures of that appropriation, other than to tell us when they try to move more than 15 percent around in those large categories.

Q: Talk about spending money on charter school buildings.

Bryan: My recollection of that motion is that it would give us opportunity or flexibility to do that. The charter school would have to create 50 percent of the seed. We would not be funding fields, those types of amenities. With have 3,000 to 5,000 students coming into Wake County, if you have the potential to create seats for 50 cents on the dollar, we’d like to have that option. It shows how important we feel about the ownership. We want to save taxpayers money. This has that potential. It’s not the highest priority. The highest is to own and maintain the buildings. Then the ability to vote for more people gives greater representation, with five districts and four at-large members. That would be third on the list.

Cooke: The whole idea is to be able to offer seat capacity at a lower cost to the taxpayer. We probably spend $2,200 a year per student on an operating basis. If you do the same on capital, spending $1,300 per student on capital, the charter schools don’t get any of that money. Charter schools are public schools.

Bryan: The charter discussion is a much more volatile discussion. I think they’ll change the term to be traditional public schools. It’s a much more volatile issue than owning and maintaining the schools.

Q: All of these changes make it sound like you think the school board is incompetent.

Bryan: The issue on owning the building and maintaining it is not necessarily about competency. It’s about the best model to do it. It’s about redundancy that is there. That issue will be resolved in two months one way or the other. The legislature will decide.

Q: Are you jeopardizing the bond issue?

Bryan: We need some champions to get out there and say we’re going to do this. The bond could be a casualty of this conflict, or the bond could also be a big beneficiary of resolving the conflict. I have the belief the public is going to see there’s a need to have a a successful school bond issue. Being above the fold, whether they’re Democrats or Republicans, they finally got through their issues, and now they’re fighting with the county commissioners.

Whether I go to Wake Up, Wake County or the Wake County Taxpayer Association, I’m trying to figure out where the community is and to listen to all sides to have a successful bond issue. that’s what I’m trying to do.

Q: What’s going on with the transit tax?

Bryan: I have stated education is my No. 1 priority. The investment i think we’re going to be asking the community to make over the next few years is going to be very significant. That’s my priority. Period. Other issues out there, they take a lower priority. Transit is going to take a lower priority to education. It’s polling 50-50. It’s hard to make a big decision when you have a 50-50 split. I think our community will get there soon enough. Most urban areas are progressive. We’re going to get there. Right now other community is pretty split on transit. It’s very expensive to provide, a little bit of commuter bus service and commuter rail. What’s the state going to be doing on changing the tax code? Last year we could do the Wake Tech bond. That was all about jobs and training young people. This school board issue will be a whole lot harder. That’s the next priority.

Q: Talk about the politics of changing how we vote for school board members.

Bryan: Mine has nothing to do with power, Republicans or Democrats. It has to do for people to have greater representation and to have the ability to vote for more people. Now they can vote for one out of nine in a system with 150,000 kids. We run from the district. We (commissioners) run countywide. Some structure that allows for greater representation for the public to be able to have an impact or more than one out of nine school board members who are presenting, as they always say, a whole system.

The whole objective is to give the pubic a greater representation, to be able to vote for more people and have people respond to them. It’s not about, look back at the last election and see that Betty Lou Ward and Caroline Sullivan won 57-43 (both are Democratic at-large county commissioners). You may be able to do this like the county commissioners. You live in a section of the county, but you run countywide. You could easily draw a conclusion that all four (at-large school board members) would be Democrats.

Q: At-large races would be more expensive. If a backer person who had a local interest took a great interest in those races and decided to raise a lot of money for those four, that would skew it.

Bryan: Absolutely. I think Jim West keeps reminding me perfection is the enemy of the good.. I hope people would see the greater good is to mave more representation, more people to vote for.

Q: What is the proper relationship between the county and school board?

Cooke: Why are you asking me that?

Q: Because you’re the best manager in the country.

Cooke: Does the county commission have authority over the board of education? My quick answer is no. The one set up in North Carolina is one based on checks and balances. If you look at our budget, it’s the largest expenditure the county makes. The stakes are high in our relationship. Both boards have to figure out how you get there and what each side’s role and responsibilities ought to be in order to deliver the best education system for our 150,000 students.

What’s our overall goal? The best education system. If we keep that goal first and foremost, we know we’re all going in the same direction. So now it’s a debate on strategy and roles and responsibilities. It’s a significant amount of money. The board of commissioners has partnerships throughout the county. The idea of striking partnerships with other boards is not unusual.

We’ll do a ribbon cutting in April or May on the 26-mile Neuse River Greenway. When things go well and partnerships work, that is the expectation of you in the public. And you should want it that way. You should demand it.

The key on this thing is we should share with the school board a common objective: the best school system in the world, the best achievement for all students in the system. As long as we share that common objective, everybody wants the same thing.

Q: Will all of the county commissioners get behind the school bond issue?

Bryan: I think we will say it is the No. 1 goal of the county commissioners. I believe Paul (Coble) and the entire board will be behind it, yes.