Board OK’s Education Foundation

BLYTHEWOOD – During the Nov. 15 School Board meeting, Superintendent J.R. Green discussed his ongoing plans to construct teacher housing in Fairfield County and called on the Board to establish an Educational Foundation that, he told the Board previously, would benefit a teacher housing initiative in Fairfield County.

At last week’s meeting, Green and Board member William Frick (District 6) talked about that benefit in terms of financing, spending about a half hour on a detailed report on how an apartment complex for teachers in North Carolina was financed at zero interest through an Educational Foundation.

It appeared to be a snapshot of what could be done in Fairfield County and, at the end of the meeting, the Board voted 5-2 to establish the Educational Foundation. However, in an interview with The Voice earlier this week, Green said the zero-interest financing that made the North Carolina teacher housing financing possible is not available to the Fairfield County School District.

During the meeting, Green reported that he and four Board members – Silvia Harrison (District 1), Henry Miller (District 2), the Rev. Carl Jackson Jr. (District 5) and Frick – traveled to Hertford, N.C. earlier this month to tour the apartment complex and find out more about the project and the financing.

But Green was not specific that the type of financing used for the N.C. teacher housing could not be used for a teacher housing initiative in S.C.

Frick explained the N.C. housing project’s financing process. He said it was not acquired by the Hertford School District, but by an Educational Foundation, a 501(c)3 charitable corporation, that is independent of the Hertford School District’s Board of Trustees. The Educational Foundation’s Board acquired the zero-interest financing from the N.C. State Employee Credit Union, which routed the funding through its own special foundation set up for the purpose of supporting such projects, Frick said.

According to newspaper reports about the financing of the N.C. project, the Credit Union’s own foundation (not the Educational Foundation) holds the lien until the loan is repaid. The loan payments are made by the Education Foundation Board from rent it collects from the tenants.

“The property the N.C. housing project sits on is owned by the school district, which rents it to the Educational Foundation for $1 per year,” Frick added, saying the school district pays the Educational Foundation $20,000 a year to manage and oversee the day-to-day operation of the housing project, including interviewing the housing applicants, collecting rent and calling the plumber for emergencies.

Green said the Fairfield School District owns 90 acres between the District office and the high school and that if the teacher housing project is built there, only three or four of those acres would be used.

Both Miller and Jackson said they were impressed with the N.C. project, noting that it was within walking distance of one of the schools.

Frick said that another benefit of the Educational Foundation is that people who wish to make donations to the school district might be more encouraged to do so through the foundation.

Annie McDaniel (District 4) asked how the chairman of the Hertford Educational Foundation Board was selected.

Green said he was not sure, but guessed that, “the chair was appointed by some people affiliated with the (School) District and some people affiliated with the Foundation.”

Green told the Board that he would want to appoint the Foundation’s Board members. He later told The Voice that the Board members will then elect their chairman and other officers.

McDaniel also asked about the cost of applying for a 501(c)3 corporation.

Green said the Fairfield County School Board would pay the approximately $1,000 cost, which would include attorney’s fees, for the Educational Foundation to apply for 501(c)3 status.

When asked by McDaniel what role the School Board would play in the Educational Foundation, Green said it would have no role.

Although discussion about the zero-interest financing for teacher housing in N.C. was lengthy, Green did not actually say that financing was being considered for Fairfield County teacher housing, nor did he identify another source of financing he might seek.

The Board voted 5-2 to establish the Educational Foundation. McDaniel and Hartman voted against the measure.

“I support an Education Foundation for Fairfield County School District, but there are a lot of questions that should be answered before we move forward to establish it,” McDaniel said.

Earlier this week, The Voice asked Green if he was planning to seek the zero-interest type of credit union financing used in N.C. since that was not made clear at the meeting.

“No. I am looking to do conventional financing through a traditional financial institution,” Green said.

Green told The Voice that the N.C. financing package for the teacher apartment complex in Hertford is “very unique” and not available to the Fairfield School District or in S.C.

“That situation in North Carolina is something that that particular credit union is doing to help transform education in their community. They are not doing it as a business to make a profit,” Green said.

Asked what the relationship would be between the School District and the Educational Foundation, Green said they would be two separate entities.

“The School District’s Board establishes the Foundation, but after that, the District has no oversight or control over the Foundation,” Green said, noting that the Foundation would obtain the financing and repay it to the loan institution out of the rental revenue. He said that, like any housing financing, the housing complex would be the collateral for the loan.

Asked if Educational Foundations in S.C. can finance construction projects, Green said he thinks they can but did not know for sure. He said he would look in to it.

Green said he was not familiar with any school districts (in S.C.) that have secured financing (like N. C.’s) through an Educational Foundation to construct teacher housing.

“The circumstances are different here. It’s just not available in South Carolina,” he said.

Green said the District’s attorneys are moving forward to set up the Educational Foundation for Fairfield County.

Barbara Ball contributed to this story.