Board accepts plan for schools
By Steve Herring
Published in News on June 5, 2014 1:46 PM
Wayne County commissioners unanimously approved a $41.5 million financing package Tuesday for construction of new middle schools in the Grantham and Spring Creek communities.
The board also accepted deeds for the two properties from the Wayne County Board of Education -- a tactic that will allow the county to recoup an estimated $1.2 million in sales taxes associated with the projects that the school system is not eligible for.
The county will lease the properties back to the school board.
The financing, which does not require a public vote, is similar to a bond. It is not backed by the county's taxing power, and is instead a mortgage on the property.
No one spoke during a required public hearing held Tuesday morning before commissioners.
The $41.5 million is about $5 million higher than the $37 million baseline commissioners have previously used when discussing the two projects.
The higher figure was recommended by Tom Lee, the county's bond attorney, and Davenport and Co., the county's financial advisers, to ensure that the county has enough money on hand to do the work.
County Manager George Wood said Davenport also had recommended a negotiated sale instead of competitive bidding for the financing.
Wood said the rates and term are comparable to what the county could have gotten had it gone through the added cost and time of a competitive sale.
"We are recommending that you go with SunTrust," Wood said. "The (interest) rate would be 3.55 percent, which is lower than what we had done our projections on. We are extremely pleased with that rate. This is a negotiated sale. We had one other applicant (Capital One) on that.
"They were very close, but we felt SunTrust was the better one. They gave us more flexibility in refinancing. The other thing that we see as a real plus is that Tom Lee reports they have done a number of financing with SunTrust so they do not anticipate any problems with them accepting Tom's documents."
That is important because "time is of the essence" in order to make the July meeting of the Local Government Commission to seek approval for the financing, he said.
Sun Trust also has better pre-payment terms, he said.
Payments will be level over the 20-year life of the financing, Wood said.
The county will only use the amount necessary up to the $41.5 million, Wood said.
A final cost won't be known until after bids are opened.
The team of Metcon/T.A. Loving has been hired by the school board as construction manager at risk to oversee the projects, including the bidding.
Bids will be received and opened June 12 at the Best Western conference room starting with the Grantham project at 2 p.m. and Spring Creek and combination bids at 4 p.m.
The school board will use $2.2 million annually from lottery and sales tax revenues to repay the financing. The county has agreed to cover any amount above that.
The operating expenses for the two new schools will come out of the school board's existing budget.