DONE DEAL
After 50 years, Bristol is getting a new elementary school
David McGee
BRISTOL, Va. – The city expects to begin construction of a new elementary school later this year after the city’s Industrial Development Authority on Wednesday approved a $27.4 million lease bond financing package.
The 4-2 vote concluded an hour-long meeting that included presentations by school officials and financial consultants and a plethora of questions from IDA board members.
Plans call for groundbreaking in mid-June with the new school to open in August 2024, which would coincide with closing the city’s three oldest, most structurally challenged elementary school buildings.
“I appreciate all the effort, the review and the thought process that IDA members put into this,” IDA Chair Paul Conco said after the meeting. “I certainly appreciate the bond counsel and the School Board and all those who struggled with trying to make the best decision for the citizens of Bristol and, today, I think we did. We made the best decision.”
The IDA vote on the financing package followed a 4-1 vote Tuesday by the City Council and a 5-0 vote last week by the city School board to approve funding for the new school.
It will be the first school built in the city in nearly 50 years.
“I’m thrilled to death for today’s students of Bristol Virginia Public Schools and for future students of Bristol Virginia Public Schools. From a facilities standpoint, they will have the same opportunities to learn as students from all over suburban, northern and affluent Virginia,” Superintendent Keith Perrigan said, calling it “overwhelming support” for the project.
The agreement includes a guaranteed maximum price for the school of $25 million and the bond package is expected to include an annual payment of $1.34 million, based on an estimated interest rate of 3.77% - which is higher than when this issue resurfaced last December.
Perrigan said the estimated savings from closing three older buildings, combined with reduced staffing needs, is expected to generate annual savings of $1.2 million to $1.4 million, which would be used to make the payments.
The school system also intends to provide a $2.7 million down payment, using federal Elementary and Secondary School Emergency Relief dollars and other funds, Perrigan said.
IDA Board member Nick Esposito asked about waiting to see what kind of school construction dollars might be available once the Virginia General Assembly finalizes its biennial budget.
Perrigan responded the present House version would likely provide about $8 million to the city and the loan program might be unattainable due to debt restraints. He suggested any state funds could be better used for future needs at other buildings.
“Some think I’m against the school. It’s not about location, it’s about these numbers,” board Vice Chair Jackie Nophlin said. “That’s what I am focusing on – these numbers because we may have other people come to the IDA for whatever. We’ve got to make sound, good decisions…Is this the right time?”
Nophlin and Esposito ultimately voted against the measure. Jan Huffman, who made the motion to approve, Dr. Imanuel Morenings, who provided the second, Conco and member Carly Thompson voted for the plan.
The school is to be constructed on part of a 33-acre city-owned site adjacent to Van Pelt Elementary, about a mile from Interstate 81’s Exit 7, on the city’s eastern end.
“We looked at over 15 different properties. We realize the property at Van Pelt is not centrally located and may not be the most ideal location,” Perrigan told the IDA board. “We’re a very small city and there are not a lot of 10-acre tracts to consider but we looked at every one, whether they were available for sale or not. We kept coming back that the property at Van Pelt is really the best property.”
Had the IDA rejected the funding plan, the School Board was prepared to go back to its original funding proposal with contractor J.A. Street using the Public Private Education Facilities and Infrastructure Act. That was expected to cost about $4 million more than the plan approved Wednesday, would have delayed the start of the project by at least 90 days and might have excluded the $2.7 million in federal dollars, Perrigan said.
Roland Kooch of Davenport & Company, the city’s financial advisers called this lease bond agreement the “optimal way” to finance the construction because it has a low interest rate and the city lacks debt the capability to issue traditional general obligation bonds.
These bonds can also be refinanced after 10 years, so if interest rates are lower in the future, the city could realize more savings long-term, Kooch said.
Kooch said the bonds would likely go on sale in early May with the transaction expected to close in mid- to late-May.
Under the agreement, the city is solely responsible for making the payments, with funds coming from the school system, bond counsel Megan Gilliland told the board.
“The IDA’s only responsibility is structure,” Gilliland sad. “To transfer those dollars the city appropriates on an annual basis. If the city fails to appropriate those dollars, the IDA has no liability - personal or otherwise – to come up with those funds. The documents very clearly lay all that out.”
https://heraldcourier.com/news/after-50-years-bristol-is-getting-a-new-elementary-school/article_54afad0e-bb5a-11ec-8897-6fc056bbd124.html
Twitter: @DMcGeeBHC
[email protected] | 276-645-2532 | Twitter: @DMcGeeBHC | Facebook.com/david.mcgee.127