Wayne officials look at school bond plan
By Steve Herring
Published in News on December 10, 2010 1:46 PM
Wayne County commissioners Tuesday morning agreed to proceed with paperwork to apply for $15 million in federal school bonds even though they say they still want to review the revised schools' facilities plan and to tour the two campuses where the bonds would be spent.
County Manager Lee Smith told commissioners during their agenda briefing that he understood that the Board of Education had agreed during its Monday night session to proceed with the Qualified School Construction Bonds for the Norwayne and Eastern Wayne middle school projects.
Commissioner Jack Best said commissioners needed to review the plans before proceeding with a bond application. He also suggested that commissioners needed tours of the two campuses.
"I have seen (the plans)," Smith said. "This is just to get the process started."
Commissioner Steve Keen asked Smith to explain Qualified School Construction Bonds.
The bond program, which has benefited from the federal stimulus package, has been around for several years, Smith said.
Once approved for the program, the county would sell taxable bonds. The county would pay between $750,000 to $790,000 annually in interest. However, the federal government would reimburse the county at the end of each year making the bonds interest-free, he said.
The county would utilize lottery proceeds to pay the principal and local funds for the interest. One uncertainty commissioners face is how the Republican surge in the Congress could affect the program. However, Bob High of Davenport and Co., the county's financial consultants, has told the board that should funding be cut for the program, the county could refinance.
The bonds, which have to be sold before Dec. 31, 2011, would be paid off over a 17-year period, Smith said.
"You have signed the letter of intent and now you have to file the application," he said.
In response to questioning by Commissioner Andy Anderson, Smith said the annual savings on interest amounted to 1.55 cents on the county tax rate.
Anderson said the county had justified the need for the school projects. The amount of interest saved almost equals the $15 million that would be spent on the schools, he said.
Both Best and Anderson expressed concerns that the low-lying campuses were flood prone.
"I know we have talked about wanting more information, but that doesn't stop us from progressing on the application," Bell said later during the meeting.
Bell then made a motion to start the application process.
But before a vote could be taken Keen asked if he could offer an amendment to the motion.
Keen's more specific amendment was to allow Smith to immediately execute an application to the North Carolina Department of Public Instruction and the North Carolina Local Government Commission for the use of $15 million of Qualified School Construction Bond funding for renovation projects scheduled for Eastern Wayne Middle School and Norwayne Middle School in accordance with the Wayne County Board of Education's December 2007 approved facility plan.
"I like your motion," Bell said.
Both motions passed 7-0. Best did not vote on either motion and in accordance with board procedure was counted as a yes.