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No phase two for Shining Rock Classical Academy, for now

Shining Rock Classical Academy will not continue with the second phase of school construction. File photo Shining Rock Classical Academy will not continue with the second phase of school construction. File photo

Shining Rock Classical Academy is hitting pause on plans for expansion of its school building — now untenable due to rising interest rates — even as the school population continues to grow. 


“We don’t have the cash flow to cover the projected debt service,” said Bert Newsome, managing director at Truist Securities and a member of the Shining Rock Board of Directors.

Plans for the second phase of construction at Haywood County’s only charter school included over 28,000 square feet of space in the form of a new wing to the building and a third floor. The SRCA Board of Directors approved plans for the project in February of 2022 with an estimated cost of just under $8 million. However, by August of last year, those plans had been put on hold  due to rising interest rates and cost of materials.

Several months ago, the school began updating projections to restart the bond analysis for phase two construction. This time around, cost estimates for the project came in around $9.3 million.  

While construction costs rose considerably during the COVID-19 Pandemic, Head of School Joshua Morgan says it is interest rates that are keeping the school from constructing additional space at this time.

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“It is truly a reflection of those interest rates and how they have changed,” said Morgan. “That has really narrowed the margin for error. We have a very good, strong, competitive rate on the bond that we have right now but the market has shifted significantly on the consumer side.”

“Right now, we’re flying into headwinds like interest rates, construction costs, they’re not going up significantly, they went up a little bit, but they certainly haven’t come back down to where they were a couple years ago,” said Newsome.

Current capacity at the K-12 Shining Rock School building is over 600, but the school population continues to grow. While last year’s budget was based on a 600 average daily membership, the actual number came in at 601. This year, the administration is projecting 695 students.

“Enrollment again has been very, very strong,” Morgan told the board during his budget presentation June 29. “There are a couple of grades where we have some lengthier wait lists established. We still have some openings in the high school grades, and a few of the selected elementary grades.”

In order to keep up with that growth, SRCA is projecting a 10% increase in revenues for the 2023-24 budget. There is a 9% increase in local funding.

“That increase in local, partially, is a reflection of increased enrollment,” said Morgan. “But it is also a reflection of increased funding from the county commissioners. So, it is not just an enrollment change that has done that. It is actually our support from county commissioners for all public schools.” 

The school is adding several new positions in the coming year to increase programming. These will include seven new teaching positions, one in the high school grades, one in exceptional children, two in the specials department, an elementary position and two in the middle school; two additional teacher assistants, an instructional coach, a speech language pathologist and a school-based social worker.

“We have found that this is going to be a position to really help address some needs that we’re seeing with some of our kids and families,” said Morgan of the social worker position. “The long COVID effects on schools, attendance is becoming a thing that’s quite prevalent and being able to deal with those issues and just some of the social dynamics are becoming a real thing. The school based social worker is a position, much like our school nurse, we will be the only school in the county that will have a full-time school-based social worker on staff.”

However, without more space, the school will not be able to continue growing.

“We’ve got now the challenge of what do we do if we can’t do phase two? How do we manage that story? And then how do we manage those kids at the other campus, and what do we do with the other campus?” said Newsome. “So that raises all kinds of questions about where enrollment is ultimately going to be if you can’t do phase two. We’ve got projections going up to 850 or 800; can we still do that? Can we still hit that if we have only the physical facilities that we have to deal with right now?”

The board plans to hold a work session on the topic this fall to consider its options and work toward a solution.

In the meantime, a set of bills currently making their way through the North Carolina General Assembly could change the options charter schools have for obtaining capital funds. As it stands now, charter schools must fund capital projects on their own. If House Bill 219  passes as currently written, charter schools would be able to go to local county governments for funding for capital projects. Macon County Schools recently signed a resolution  opposing HB 219 which creates several other avenues for charter schools to obtain a larger portion of funds set aside for public K-12 education.

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