School construction allocation remains available

Published 8:29 am Tuesday, November 15, 2011

WINDSOR – The money is available.

On the same day the Bertie County Commissioners approved an architect to build a new Bertie High School, the board heard from Davenport & Company spokesman Ted Cole that the money is available to build the new school.

Cole reported the status of the Qualified School Construction Bonds (QSCB) which will help the county build a new high school at limited or zero interest costs.

The $18 million allotment was scheduled to have been allocated by December, but Cole reported the deadline has been extended.

“Your allocation is not in jeopardy,” he said. “You have an extension that will allow you to work through this process.”

The key to the allocation is the “net zero” interest component which will allow the county to pay only $18 million for the new school.

Cole said the county would receive a loan and would have to pay the interest, but would receive a subsidy from the Internal Revenue Service. That subsidy, if matched correctly with the loan, would allow the county to pay back only the principal of the loan.

Cole said Wayne and Martin counties recently finished the process and both were able to reach net zero interest.

“QSCBs can be issued through either a public sale or a privately placed bank loan,” according to Cole. “An analysis of market conditions of both the public and private markets will be necessary to determine the most cost effective approach based on the term limits, tax credit rates and prevailing market interest rates.”

Other keys would be a sinking fund option, permitted sinking fund investments, call provisions, credit ratings, closing requirements and others.

Cole said upon completion of the design it would take approximately 11 weeks from a meeting with the Local Government Commission to start the process and the closing date.

Following Cole’s report, Bertie County Manager Zee Lamb informed the County Commissioners he felt it was going to be necessary to have the expertise of Davenport & Company to lead the county through the financial process.

“I have asked them to draw up a proposal and send it to us,” Lamb said. “You will have the chance to look over it and decide if that is the way you wish to proceed.”

Later in the same meeting, Hite Associates was chosen to do the architect work for the new Bertie High School facility which will be constructed across U.S. 13 from the current building.