The board, after a work session Tuesday following the voting called meeting, also got an update on the 2017-18 budget and the current fiscal year, the latter of which soon will include an estimated $1.5 million to $2 million needed to close out the self-insurance health plan the board abandoned Dec. 31, after two years, in favor of the Tennessee health plan.
The architect funding vote was 5-0 to approve the payment of $650,100 to Perkins+Will for the building design. Coupled with previous payments, the amount approved Tuesday makes for a total compensation of $950,500, or about 5.5 percent of an estimated construction cost of $16.5 million, not counting a $30,000 flat fee and a few other items.
“We’re getting a deal on this,” BOE member Todd Golden said, while member Carrie Upshaw cited the architectural firm’s “exemplary” work so far.
The project will be funded with the city’s share of $140 million in Sullivan County bonds, with Chief Finance Officer David Frye saying Kingsport’s portion, about $45 million, should be received by March 28. The city will then pay the county $20 million for Sullivan North High/Middle School, which will be turned over to the city school system when the county completes a new high school off Exit 63 of Interstate 81.
When the money comes to the city, Frye said, the Board of Mayor and Aldermen also will return funds to the school system that were temporarily diverted from other accounts: $200,000 from the Overlook Road project at Jefferson Elementary, $100,000 for the Indian Highland Park parking lot paving project to get underway in May and $25,000 to study North’s conversion to a city middle school.
As for the budget and health insurance, Frye during the work session estimated up to $2 million will be required to cover health claims that continue to roll in, although they are fewer and farther between, after the system went back to the state plan. Those claims will be partly offset by an expected $300,000 or so in pharmacy rebates over roughly the next nine months.
In answering questions from BOE member Todd Golden, Frye said that in the new fiscal year starting July 1, he expects the fund balance will not be $2 million short of what it is now, but it will be affected somewhat.
“We’re dwindling off” in claims, Frye said. However, “It’s going to be a significant amount.”
Looking forward to the 2017-18 budget, Frye projected overall revenue increases of at least $2.5 million, but those would be offset by step increases for employees totaling $692,000 and salary improvements of $1.144 million, as well as unitemized expenses including additional teachers, a new counselor, teaching assistant, a maintenance worker and additional bus drivers, as well as other items including $400,000 to improve wireless access at elementary schools.
Frye said a full recommendation should be ready by the April 18 BOE work session, in time for consideration and a vote at the May 2 BOE meeting, after which the recommended budget will go to the Board of Mayor and Aldermen.