Carroll approves school bonds

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Stimulus funds will pay for expansions of Carroll's high and intermediate schools.

By Christopher Brooke, Reporter

HILLSVILLE — The Carroll school system’s plan to go out to bid May 1 on two facilities projects has been helped along by the county supervisors agreeing to repay a $15 million bond issue for the work.
The supervisors, in a brisk and busy meeting April 25, did their part by holding a public hearing on the qualified school construction bonds coming to Carroll County, and signing off on the bond requirements.
Educators had appealed to Gov. Bob McDonnell for funding through the federal stimulus program to help pay for expansions at Carroll County high and intermediate schools after the closure of Woodlawn School.
The goal of the construction project is to add space for the ninth grade at the high school and to make room for the intermediate school to house grades six through eight.
The governor set aside the maximum of $15 million in bonds for the Carroll effort.
County Administrator Gary Larrowe, at the Monday meeting, outlined the particulars of the bonds and the county’s responsibilities for them.
The bonds have always been described as having “zero interest," he noted. What actually happens is that the federal government will subsidize the county’s interest payments and the net effect should be zero interest costs to Carroll.
The length of the repayment term has not yet been fixed, but county and school educators have discussed it as being between 15 and 19 years, Larrowe said.
Carroll’s bond counsel just recently brought up another possibility. “There is a possibility — a very, very, very slight possibility — it could be as low as 13 years,” Larrowe said.
A repayment schedule of 19 years would be better for the county, of course, Larrowe added.
The bond issuer, Virginia Public Schools Authority, will give Carroll latitude in its repayments, as long as the county repays 10 percent in five years and 50 percent in 10 years, the county administrator said. The remaining debt would be divided out equally to pay by the end of the term.
The school system has to spend all proceeds from these bonds on the construction projects, Larrowe said.
“This is a very important matter for Carroll County,” he said. “It’s not every day we spend $15 million.”
Supervisors’ Chairman Tom Littrell asked what period of time would elapse between the time the county pays the interest and gets reimbursed by the federal government.
“Bond counsel has said c the way they have it timed out we would end up receiving the interest payments prior to actually making the payment,” Larrowe answered. “So we should end up having the money in our account before we would have to end up making the payment.”
“That doesn’t sound like the way the federal government does business,” Littrell said.
Larrowe expected the funds for the interest payment would come in just a few days before the county’s payment is due.
Supervisor Sam Dickson expressed some concern at the idea the repayment term could be as short as 13 years. Will that affect the county?
County officials have already set aside $1.5 million to repay 10 percent in the first five years, Larrowe answered. The county would not feel a squeeze for that length of time.
When will county officials find out the length of the term for sure, Supervisor Wes Hurst asked.
The Treasury Department will set the term at the date of the bond sale, Larrowe answered.
When the supervisors opened the public hearing, no citizen spoke.
The school board has already approved its part of the bond sale, Larrowe said. If the supervisors approve the bond resolution, it will go into effect immediately because of the timeline for the bond sale.
Hurst made a motion to approve the resolution, and all supervisors voted yes.
“We hope your bids are very favorable so you can do a lot of these projects,” Littrell said to Carroll Schools’ Superintendent Greg Smith after the vote.
“It’s been a long journey, hasn’t it?” Smith said from the audience. “But thank you all very, very much.”
The school board’s intention is to go out for bids May 1, with the bid opening on June 16, Smith said.
“This keeps us on schedule for the bidding process and eventual construction,” he said after the meeting. He was pleased with the supervisors’ action.