Indian River School District finds funding match for Sussex Central High project

GEORGETOWN — Some creativity has found a way to offset market pressure and generate an additional $4.9 million in state and local funding for the Sussex Central High School build.

The Indian River School District recently pitched to the state to use interest on its construction funds over the past couple years to receive Delaware’s market pressure match.

“We floated that through the (Office of Management and Budget), and we were given that permission,” Tammy B. Smith, the district’s director of business and finance, said at the Sept. 23 board of education meeting. “The interest between (fiscal year) 2023, when our interest rates came back above zero, through the interest we received today, which is through August, totals $1,951,997.92.”

The board unanimously approved the request to use that money in the 60%/40% state/local ratio for funding.

“With that, the 60% state share is just over $2.9 million and, in total, will get us just under $4.9 million in additional funds that we can put toward that project,” Ms. Smith said.

Board President Leolga Wright was appreciative of the initiative.

“It was called ‘thinking outside of the box,’ and it worked. We appreciate your due diligence in seeing that through.”

The high school rebuild, geared to address overcrowding, was approved by voters in a $146 million referendum in February 2020.

Since then, the pandemic, escalating inflation and supply chain issues fueled increased market pressure. As of Feb. 28, 2023, the estimated cost of the project, inclusive of the monies in the referendum, stood at more than $187 million.

“Our project at Sussex Central, due to market pressure, inflation and cost increases, was significantly over budget,” Ms. Smith said. “I believe the state, in their consultant’s report, had that we were about $30 million over budget.”

The district qualified for market pressure funds from the state, but those require a local match of 40%.

“So, when you are talking $10-plus million to local match, that is just something we couldn’t afford to (do), even on a normal basis. We should not have that much money sitting around,” Ms. Smith continued. “So, through this process — in working and asking for relief and asking if the local portion could be forgiven if we could do an in-kind contribution based on things that we did not end up putting in the project — we were denied.”

The proposal to use interest earned was approved, however.

“We are at the point of the project that we need to make that local match and receive the state funds, then we can keep moving,” Ms. Smith said.

The Sussex Central construction should be complete by the start of the 2025-26 year.