HC Commissioners approve borrowing $5 million for AES project

Published 5:54 pm Tuesday, January 7, 2020

WINTON – Hertford County will move forward with borrowing $5 million as their part of the new Ahoskie Elementary School project.

At their regularly scheduled meeting here Monday morning, the county’s board of commissioners approved a resolution that authorized the filing of an application seeking approval of an installment financing agreement.

Additionally, the commissioners, after hearing a presentation from Ted Cole of Davenport & Company (a financial advisor firm under contract with the county), to apply with BB&T for the loan. Cole recommended BB&T from a list of interested lenders due to their low interest rate (fixed at 2.22 percent) as well as reduced costs for other fees associated with this project. The term of the loan is for 10 years.

The $5 million commitment from the county fulfills their matching funds as required under the guidelines that came with a $15 million grant from the state’s Needs-Based Public School Capital Fund. Hertford County officials were notified in November that their application for the state grant was approved.

Cole told the commissioners he saw no concerns within the county’s finances that would prevent it from taking on this added debt. As far as local taxpayers are concerned, there was one line within the resolution that read, “There will be no increase in taxes necessary to meet the sums due under the proposed financing.”

“The county is in good shape in regards to the debt you have on the books today,” Cole noted. “You have adequate resources within the confines of your current debt model to pay this new $5 million of debt over 10 years without having to find or bring in new revenues to do so.

“We have no concerns and the LGC (Local Government Commission) should have no concerns about your ability to take on this $5 million in new debt,” Cole continued. “It’s affordable for you and the 10-year payback saves you on interest costs as compared to a 15-year or 20-year payback.”

As for a timetable moving forward, Cole said the county’s Board of Education needs to meet and convey the property where the new school will be built to the county to use as collateral for the loan. There’s also a final resolution for the commissioners to consider at their next meeting (7 p.m. on Jan. 21).

Pending the LGC’s approval at their Feb. 4 meeting of the county’s desire to borrow $5 million, the next step will be to close the financing deal with BB&T on Feb. 14. Once the funds are in place, the contractor can begin construction. If that process stays on schedule it’s hopeful that the new school will open its doors in August 2021.

As to discussion among the commissioners and board of education at a special joint meeting held Dec. 23 regarding the school board’s request for the county to borrow $6 million in an effort to add a 350-seat auditorium to the construction project, Commission Chairman Ronald Gatling said that plan is moving forward as well.

“We’re trying to find out how we can add the auditorium to this project without having to borrow an additional one million dollars,” Gatling told the R-C News-Herald at the close of Monday’s meeting. “Our main objective is to build a new school. We’re looking within the overall money approved for this project ($20 million) to see if we can add an auditorium.”

Interim Hertford County Manager David Cotton said the general description of the resolution was broad enough in nature to account for any changes in the project as agreed to by the commissioners and the Hertford County Board of Education.

“There is flexibility in the application and the budget ordinance gives both boards some options, Cotton said. “Overall, we’re still leveraging $20 million – $15 million from the state grant and $5 million that we will borrow.”

The construction bids for the project were opened Dec. 10. A.R. Chesson Construction of Williamston submitted the lowest bid at $15,521,375.

Hertford County Schools Superintendent Dr. William Wright stated that with the architect’s fees coupled with other costs – to include fixtures, furniture, equipment, etc. – the grand total is $17,056,000. That would leave roughly $3 million for an auditorium if county officials choose to add that to the construction plans.

The project’s architect estimated it would cost $3,520,000 to add an auditorium.

 

About Cal Bryant

Cal Bryant, a 40-year veteran of the newspaper industry, serves as the Editor at Roanoke-Chowan Publications, publishers of the Roanoke-Chowan News-Herald, Gates County Index, and Front Porch Living magazine.

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