Board gets report on 7th elementary

By GINA KINSLOW
Glasgow Daily Times

GLASGOW March 28, 2008 04:45 pm

— Site preparation for the Barren County Board of Education’s seventh elementary will begin soon.
The announcement comes after the school board has awarded a site preparation bid and authorized the sale of revenue bonds for the first phase of the project.
The $589,398 site preparation bid went to McNutt Construction, of Glasgow, which is the same company that did the site preparation for the new Temple Hill Elementary, according to construction manager Darrell Wheeler.
The school board followed Wheeler’s recommendation in awarding the bid to McNutt, but did not accept the company’s unit prices. Instead, the school board agreed to allow Wheeler to negotiate those prices down.
Work to prepare the property, which is near the intersection of North Race Street and US 31E North, is set to begin soon.
“He indicated he would be ready to start immediately,” Wheeler said.
After awarding the site preparation bid, the school board approved a revised building and grounds or BG-1, permit for the site work.
Bond counsel Joe Nance with Ross, Sinclaire and Associates, of Frankfort, explained to the school board that the Kentucky Department of Education recommended it do a separate BG-1 for the site preparation work so that it could determine the actual cost of the site.
The BG-1 lists the initial costs for the project, including the $589,398 for site preparation; $33,006 for architect/ engineer fee; $26,405, construction manager fee; $25,400, bond discount; $13,700, fiscal agent fee; $29,470 contingencies or 5 percent; $541,829, site acquisition; and $10,792 for bank, rating printing and other miscellaneous costs for a total of $1,270,000.
The school board has a projected total bonding potential of $12.l million. A portion of that amount comes from property tax revenue.
For the 2008 fiscal year, which ends June 30, the school board will receive $2,034,588 in property tax revenue. This amount includes the base 5 cent per $100 assessed value property tax the school board receives, plus two additional 5 cent per $100 assessed value property taxes, or growth nickels, it receives for being a growth district.
“Based on projections for next year, a conservative estimate of next year’s property assessment, those three nickels will produce $2,115,971,” Nance said. “You can see with general growth in property our nickels will produce about $80,000 more next year than they did this year.”
In addition to the growth nickels, the school board receives two equalizations from the state.
“Both of those equalizations are going to go up $624,405 this year and $752,690 next year. That’s the main difference that is allowing us to proceed with the new elementary school,” he said.
In addition to the property tax revenue, the school board will also be allowed to use $44,607 in funding from the 2006 School Facility Construction Commission offer of funding toward the project.
After listening to Nance, the school board adopted a resolution authorizing the Barren School District Finance Corporation to issue the revenue bonds.
It also adopted a resolution authorizing the finance corporation to refinance 1998 series revenue bonds.
Nance pointed out that KDE requires a minimum net present value savings of 4 percent.
“You don’t want to do a refinancing too early, because once you do it, you’re probably not going to have another opportunity to take advantage of a low rate,” he said.
The current net present value savings is 3.25 percent, which generates a total savings of $127,102.
“That sounds pretty good, but just to give you an idea, in order to get the 4 percent savings we need to be at about $150,000 range,” he said.
Nance was confident that if the board agreed to move ahead with the refinancing of the bonds, once the net present value savings reaches 4 percent, his firm can move ahead with the refinancing within a five-day period.
The school board also called a meeting of the Barren County School District Finance Corporation, which voted to issue the $12.1 million in revenue bonds and to allow Nance’s firm to go ahead with its plan.
Seventh elementary ground breaking is set for April 15 at 10 a.m.