School board borrows $50 million

Published 12:00 am Tuesday, February 21, 2006

Work will soon be under way for new schools in Calera and Helena.

The chance at two new schools was finalized last week when the Shelby County Board of Education voted to borrow $50 million.

Larry Ward, the school system&8217;s financial adviser with Morgan Keegan, reported that a strong credit rating earned the system an additional $177,500 and an &8220;excellent interest rate.&8221;

&8220;At no time will we get a more positive result,&8221; Ward said. &8220;This was well-planned and well-organized and you are benefiting from the work that has been done.&8221;

Ward said $50 million would be leveraged at an interest rate of 4.534 percent and debt service of $3.44 million per year, almost $10,000 less than the $3.54 million initially projected.

The board pledged future sales taxes to retire the debt over 25 years.

Ward said the school system received an A2 rating by Moody&8217;s Investor&8217;s Service and an A rating by Standard & Poor&8217;s for the school warrants.

The rating companies also upgraded the board&8217;s ratings on its existing 10- and 11-mill property taxes to A1 for Moody&8217;s and A+ for S&P.; The upgrades reflect Shelby County&8217;s rapidly growing economic and residential base, above-average incomes in the county, strong debt service coverage from sales tax revenues and the school system&8217;s healthy financial position, performance and credit rating.

&8220;Not many systems can go in, borrow $50 million and be upgraded at the same time,&8221; Ward said.

&8220;This move was no gamble. It was the calculated result of good work and good planning.&8221;

Superintendent Evan Major said the system&8217;s ability to borrow $50 million was a team effort.

&8220;Our school warrants were well received in the marketplace because our school district is financially sound and well-managed,&8221; he said.

Construction costs of the two new schools are estimated to be $18-20 million for the new Helena Middle School and $22-25 million for the new Calera High.

The board has already secured property for the two schools, and construction will begin in the fall.

After construction of these two schools, the remainder of the funds will be used to make repairs at other schools in the system.

In other construction reports, Assistant Superintendent of Operations Tom Ferguson said the building of Chelsea Park Elementary School is &8220;moving on a good pace.&8221;

A completion date is set at the end of October, he said.

As for other construction projects:

-The MBF room at the Instructional Services Center in Alabaster is almost complete. That room will house the system&8217;s mainframe computer.

-Paving is under way at Linda Nolen Learning Center. Other paving projects will begin soon at Shelby County High, Calera High, Meadow View Elementary, Vincent Elementary, Vincent Middle/High, Oak Mountain Middle, Oak Mountain Elementary and Elvin Hill Elementary.

In other business, the school board awarded bids for:

uGrading and paving project for parking at Thompson High School to Walker Patton Company Inc. for some $190,000.

uRe-roofing project at Helena Elementary School to GKL Companies Inc. for $112,800.

uPartial roof replacement at the Instructional Services Center, Linda Nolen Learning Center and Vincent Elementary School to Interstate Roofing Inc. for $384,600