Contract commits county to pay for central office move
A little-known contract crafted in 1980 will take center stage in coming months as Haywood County school officials and county leaders sort out who owes who what if the school system gets the boot from its central office location.
For 35 years, the county has housed the schools’ central offices rent-free in the old hospital on the edge of Waynesville. That ride is poised to end, however.
The school system could have to move out of its central office digs by early spring 2017 if a plan goes through to turn the old hospital into an affordable apartment complex called Brookmont Lofts.
However, school officials are pointing to a 1980 agreement that obligates the county to provide them with a substitute space if they have to leave the old hospital.
“If the school system is asked to vacate its premises at the old hospital, the county would provide comparable office space to the school board,” School Board Attorney Pat Smathers said while giving an overview of the 1980 agreement at a school board meeting this month. “The cost of comparable office space was to be born by the county.”
The infamous agreement dates back to a game of musical chairs that played out in 1980. At the time, the school’s central offices were located in an annex behind the historic courthouse in downtown Waynesville.
The county wanted that space to expand its own administrative offices.
So the county negotiated a deal with the school system to move into the old hospital — recently vacated following construction of a new hospital — and thus freeing up the historic courthouse annex for it own use.
“The county wanted that building. So they entered into an agreement with the school system that the school system would move into the current location in the old hospital,” Smathers said.
Now, 35 years later, the contract has been dusted off and is being mulled over by both sides, each trying to figure out what the county’s obligation is should it kick the school system out of the old hospital.
School leaders have maintained publicly that the county has to provide them with a substitute location for central office — per the 1980 contract. Here’s what the agreement says:
“If for any reason the Haywood County commissioners should, at a later date, terminate this contract, or cannot for any reason provide that portion of the hospital building…(the county) will promptly furnish and provide the (school system) with comparable quarters,” the contract states.
The comparable quarters must be large enough and be suitably designed “to meet the needs and requirements” of the school system, “in other words ‘equal offices,’” the contract states.
The county didn’t exactly promise to provide the school system with “equal offices” in perpetuity, however.
The agreement was initially good for 10 years. After that, it automatically rolled over another 10 years, and then another 10 years, and another — but with a caveat.
“This lease will automatically renew and extend for additional 10-year periods until notice is given by either (party) of its intention not to renew said lease,” the contract states.
The escape clause seems fairly simple. The county doesn’t have to meet any sort of criteria to get out of its promise to provide office space for the school system other than declaring it wants out.
The county has never said it wants out, however, so the agreement has simply rolled over every decade — each time extending the county’s commitment for another 10 years by default.
The last rollover was in 2010, leaving the county on the hook to provide central office quarters for the school system through the end of 2020.
“We do recognize that we have a lease agreement with the school system,” County Manager Ira Dove said.
Dove said the county will uphold its obligations, but “what that will look like is still being developed,” Dove said.
Haywood County Commission Chairman Mark Swanger said it would be premature to speculate, but hopes the two parties will come to a meeting of the minds.
“We want what’s best for the school system so I think we would negotiate as best we could to still satisfy their needs and be responsible to taxpayers,” Swanger said. “I would be shocked if there were not good faith negotiations on both sides.”
School officials have informally floated various options to the county over the past few years, but were rejected by the county as just too expensive, Swanger said. Likewise, the county has floated ideas of its own on where central office could go, but those were rejected by the school system as inadequate.
“Some of the options out there they don’t view as acceptable,” Swanger said. “When you get down to brass tacks then things get more serious.”
However, the county wouldn’t necessarily have to provide the school system with physical office space in order to live up to its agreement. A breach of contract can often be legally settled with a monetary payment in lieu of fulfilling the contract terms — under that scenario the county would pay the school system market value for four years worth of office space, in effect buying out its remaining obligation under the agreement.
Close to the vest
It is unclear whether the school system and county have established an open line of communication about the impending central office boot.
This is the second time the school system has faced the prospect of a forced evacuation from its central office quarters. Five years ago, the county was entertaining a buyer for the old hospital that would have forced the school system to be out by the end of 2011.
School officials presented the county with several options and cost estimates of new central office locations early in 2011, but had trouble getting a clear answer from county leaders on what they were willing to commit, according to correspondence records.
“At this point, we do not feel adequate progress has been made about relocating Haywood County Schools Central Office,” the school board wrote in an open letter to county commissioners in early 2011.
While two commissioners had met with school leaders to review options, school officials wanted a parley between the entire school board and entire board of commissioners.
“We have made previous requests to meet with both full boards. To date those requests have not been honored,” the school board wrote. “We feel the relocation of Haywood County Schools Central Office will have long-term financial and strategic implications. We want to ensure the decision-makers in this matter consider all potential ramifications before a final decision is rendered.”
The deal to sell the old hospital fell through that time, however, giving the school board some breathing room to launch a more exhaustive search of options.
Now, five years later, the school system seems to be in the same spot again.
The county once again has a prospective taker for the old hospital, but the school system still lacks clear direction from the county on how to proceed.
“The school board has not been notified informally or officially of any deadline to vacate its premises,” Smathers said as of two weeks ago.
Among the unknowns: what is the move-out timeline, how will the 1980 contract be handled, does the county intend to provide office space to make good on the contract, or will it settle it with a monetary pay out, and if so, how much?
“There has been very little discussion about it,” School Board Chairman Chuck Francis said. “If we are going to be relocated we need to make a decision as soon as possible where that would be. If there needs to be remodeling done, where would the funding come from for that?”
Swanger attempted to quell any nervousness on the school’s part about the ticking clock.
“We have the capacity to move rapidly. There would be ample time for an orderly transition,” Swanger said.
Swanger said the county isn’t intentionally keeping the school system in the dark on where it stands, but it is speculative to make firm decisions until the Brookmont Loft deal is a sure thing.
“A lot of our discussions haven’t been overly serious because until we know, it is all conjecture,” Swanger said. “We can’t go out and secure something right now because if the hospital deal falls through we would have wasted a boatload of taxpayers’ money.”
The school central office currently houses 30 administrative staff, including the superintendent, human resources, finance and accounting, curriculum advisors, and coordinators for everything from busing to testing to services for migrant students, special needs students and the academically gifted program. It is also home to copious volumes of records that have to be preserved in any move.
Superintendent Anne Garrett said central office staff has started asking with increasing frequency where and when they might be moving.
The impending relocation of Haywood County School’s central offices has paralleled the impending closure of Central Elementary School in Waynesville. The school board voted in February to close Central Elementary School and consolidate its 230 students into other schools as a cost savings measure.
A lawsuit filed this month, however, alleges that the school board engaged in a “secretive plan to close Central Elementary under the false pretense of necessity due to a budget crisis,” when in fact the school system just wanted Central Elementary School for its own central offices.
The school system has disputed the notion of an ulterior motive.
“It is unfortunate that the site relocation issue for central office, which may or may not occur, is being arguably conjoined with the separate issue of decreased enrollment and funding for the purpose of alleging a secret agenda for the school board. It is simply not true,” Smathers said.
That said, Central Elementary School has indeed appeared on the list of possible sites to move central offices to.
“Yes, Central was considered as one of 28 sites,” Smathers said. “Although it was never a high contender.”
Central Elementary first shows up in public documents chronicling the school system’s search for a central office location in early 2015. That’s also the same time school officials began talking amongst themselves about the possibility of needing to close a school, Smathers said.
Central was later removed from the list of central office contenders, however, after county commissioners indicated they weren’t willing to pony up the estimated $750,000 needed to retrofit it for central offices, according to school building and grounds committee minutes from April 2015.
“The commissioners said we don’t have the money to move you to Central Elementary even if it were available. It has been a dead issue since then and it hasn’t even been considered,” Smathers said.
However, by January of this year, Central was back on the list and was indeed being considered. During a school board discussion in early January, talk of closing Central Elementary was laced with references to the urgent need for a new central office location.
“I think we’re going to have to do this because we’re going to have to think of a place that we’re going to go, where administration is going to go,” School Board Member Lynn Milner said when the idea of closing Central was brought up. “I think we’re going to have to look about going to Central.”
“If you are going to close the school this is prime time,” Superintendent Anne Garrett said during the school board work session.
Garrett acknowledged that it would look bad for the school system to close Central Elementary and then announce plans to move its own offices there.
“We don’t want it to be that we’re taking Central just so we can have a location to move. I think that would really give us a black eye,” Garrett said at the meeting.
If the decision to move central offices to Central Elementary was announced at later time, however, then it would appear that the school system was being fiscally responsible by moving into an empty building no longer in use, Garrett said.
Moving into Central Elementary would certainly make the county’s obligation to provide the school system with “equal offices” should it be forced to leave the old hospital.
But Garrett postulated that the county would owe the school system a monetary compensation in that event, which in turn could be used to pay for the move, according to discussions at the school board work session in January.
School Board Member Walt Leatherwood then spoke up.
“When it comes to that point the commissioners want us out of this building, I think we ought to be able to move to Central on an open check book in my opinion because they owe us, and they’ve tried to put us in every hole in the whole county to be honest with you, and we’ve talked about it, and we need to stick by our guns,” Leatherwood said.