Razing The Roof: PE School Projects Coming
Published 7:32 am Wednesday, May 27, 2015
PRINCE EDWARD — County supervisors gave the green light Thursday night to financing a host of school construction projects.
Work could get underway before the ink dries on the final report cards of the school year.
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The County had sought a lease-purchase financing arrangement of approximately $5.1 million to finance the energy performance contract with Honeywell. The project includes energy conservation measures, but also roof replacement for the middle school and career tech center. Seven lending institutions responded to the request for proposals and Hancock Bank was recommended for the 15-year loan with a fixed interest rate of 2.35 percent for 15 years.
The lease financing would allow the school projects to get underway now, but the monies to fund the work are generated from energy savings (estimated at $212,166 in the first year and escalating three percent each year and totaling $311,573 in the fifteenth year) and utilizing $250,000 available with retiring debt each year from the third to the fifteenth year.
“…We are comfortable with…the funding that you received,” advised County financial advisor James Sanderson of Davenport & Company. “It meets the requirements from a revenue perspective that you’re gonna have from the operational savings and your drop in debt service in order to pay for the project without having to come out of the budget of the county.”
Hancock Bank’s proposal provides the most affordable funding for the county and the interest rate is a market interest rate, he said.
In separate action, the board held two public hearings to make reflective adjustments to the current and coming budget fiscal years for the $5.1 million. When a county’s amended budget exceeds one percent of the total expenditures of the budget, State Code requires a public hearing. Since the projects can span two budget years, two hearings were held. There were no speakers and the board unanimously approved the budget amendments.
Meanwhile—with a few supervisor-suggested tweaks to the final contract still to come—work at the schools should get underway once the students leave for the summer. In addition to roof replacements at the middle school and career technical center, it also includes enclosing the walkway to the fifth grade wing, control system upgrades, water upgrades, building envelope (connections between the interior and exterior of the school), and lighting upgrades at all of the schools.
Supervisors approved the resolution authorizing the lease financing of energy conservation and other improvements for the schools. Sanderson explained they can move forward with contacting the bank and executing the documents and funding the loan. They are expected to be able to close in early June.
The board also approved a reimbursement resolution, which allows the county to spend funds from reserves towards the project in the interim if needed and to be reimbursed when the loan funds are available.
County school board members adopted a resolution authorizing a performance contracting agreement with Honeywell for school renovations.
While the action of the two boards green lights the work, among the issues yet to be worked out is the need for a project manager to oversee the work.
The funding for that could be rolled into the overall project cost.