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No time to waste on construction loan

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By Christopher Brooke, Reporter

HILLSVILLE — There's a lot to do to qualify for a federal loan, and not much time to do it, said Rural Development's Travis Jackson in a visit to the Carroll Board of Supervisors meeting Monday.

There's some urgency if Carroll County officials want to qualify for the loan to renovate two schools and get a 35 percent rebate on interest from the federal government, Jackson noted, when joining Carroll Schools Superintendent Greg Smith in a presentation to the county board.

Jackson has assisted school officials in getting a federal loan from the stimulus funds for upgrades to Carroll's intermediate and high schools.

Educators want to apply for a loan from the federal agency to add the ninth grade to the existing high school and change the intermediate school to house grades six through eight.

But getting a $30 million loan from Rural Development — plus qualifying for that interest rebate provided by Build America Bonds — is no small task, Jackson indicated.

The pot of federal money that could be used for the renovations is usually limited to about $3 million per project, Jackson noted. But if county officials act in a timely way, Jackson believes that Carroll County could secure a loan to cover the scope of the work that educators want to do.

The likelihood of getting funding in a timely way from the state Literary Loan fund seems distant, he said.

Working through Rural Development, it's possible that the county could get a loan with an interest rate of 4.125 percent to pay back over a 40-year term. It would be just like a simple interest loan, where there'd be no penalties for early pay-off.

The U.S. Treasury Department also offers the Build America Bonds, through which Carroll County could receive a 35 percent rebate from its interest payment each year for 10 years, Jackson said. That would mean, if the interest payments total $1 million in one year, $350,000 of that would come back to Carroll County.

Based on budget legislation that Jackson knows about, the pool of money available from the federal government will disappear fairly soon, he said. Carroll County would have to meet some crucial deadlines.

"As of September 30, my office's ability to be able to help Carroll County is diminished greatly," he said. "Today, I could do a $20-, $30-, or $40-million project quite easily."

From the information from the Congress and the White House he's seen, the upcoming budget will likely go back to capping the max for school renovation projects at $3 million.

That really puts a lot of pressure on communities to decide whether to go ahead or wait for the economy to improve, he noted.

The funding that Jackson's talking about will be given out on a "first-come, first-served basis".

"So I really need to have an application in my hands by early June if we are going to be competitive with other projects that's in the nation," he said.

Like Jackson said at the Sylvatus-Mitchell's Crossroads water project announcement, some people debate the merits of the stimulus funds. But, he noted the money has already been allocated and it will be spent somewhere in the United States.

"And I look at it as my job to see that this region of our state gets the majority of that money, back into the citizens' hand that are the taxpayers," he said.

Jackson feels confident that if this board decides to move forward to seek this revenue bond through the Industrial Development Authority, that Carroll County would receive the funding.

Meeting the requirements of the Build America Bonds also adds some urgency, because that program has a deadline of Dec. 31, Jackson noted. "So I think we need to move forward if we're going to do this project."

Jackson named off a whole list of federal requirements to get this done, including getting a final set of plans, meeting the Buy American clause, getting the plans approved, getting the environmental review done. "So those things are all time consumers, so you can't wait much longer and those hope to meet those deadlines.”

One of the features of this federal loan is that payments can be deferred for three years, which would give Carroll some "breathing room" at the beginning of the loan, Jackson said.

Pinnacle Architects' Frank Williams presented an architectural report to the supervisors, similar to one given to the Industrial Development Authority last week when seeking its approval to apply for the federal loan.

There have been some changes to the architectural plans since last week. The base estimate had been revised down to $14.5 million for the high school and close to $5 million for the intermediate school.

Several items — like adding a "Ninth Grade Academy," a new auxiliary gym, a new entrance, lobby, media center, baseball complex, renovations to the heating and cooling and electrical system — remained in the plan, according to a document handed out to county officials at Monday's meeting. Other things, such as an athletic field house addition, upgrading existing parking lots, expanding the cafeteria and building a new auto mechanics and horticulture building, have become optional "add-alternates" that could be included if the bids come in low enough.

That brought the total for construction down to $19.4 million, according to the handout. The budget also contains other fees, including $2.55 million in architect, engineering and other technical work; $235,000 for furniture; a contingency of 10 percent of the construction cost set at $1.9 million; and refinancing for about $3.7 million in existing loans.

Supervisors Wes Hurst noted that the county officials would like to see an amortization schedule for the debt pay-off before they make a decision.

He also noted that Rural Development and Travis Jackson have provided Carroll County with a great deal of assistance by providing funding to tackle projects like getting water and sewer service to each of the three Interstate 77 interchanges in the county.

Having heard three citizens — educators Brenda Collins and Shelley Goad and citizen Annetta Stanley — speak in favor of applying for the Rural Development loan during citizens' comment time, Hurst indicated that the supervisors still needed to do their research before making a decision.

The only decision about seeking the schools renovation loan came later during supervisors' time, when Supervisor Tom Littrell motioned to hold a public hearing on the idea at the county board's regular June meeting.

The supervisors approved that motion unanimously.