Jacksonville City Schools is working with Merchant Capital to borrow between $7 million and $8 million through a bond issue to build a new elementary school, a project expected to cost $11 million to $12 million in all.
The agreement reached Tuesday, still tentative, ensures the county will continue to support the school system financially for the next 30 years, said Ken Funderburk, the bond attorney working for the schools. It also obligates the county to pay a portion of the bond debt if the school system were to default, but its primary benefit to the schools is that it will help officials obtain a good bond rating, Funderburk said.
"It was a tool for us in the bond-rating process," he said.
Jacksonville schools Superintendent Jon Paul Campbell said he appreciates the work the commission has done toward the deal.
"It's not something they have to do," he said. "We're excited to move forward with it."
The school board plans a community meeting on the school project Thursday at 6 p.m. in the Jacksonville High School cafeteria. The meeting may be the public’s last chance to share thoughts about the location of the new school before the school board decides at its next formal meeting where to build, Campbell said.
The city of Jacksonville in December committed to pay an additional $170,000 a year for 30 years to help the school system pay for the bond debt. The city in May also borrowed $4 million for the project through a bond of its own. The funding from the city and the agreement with the county will help the bond rating agency Standard and Poors evaluate the school system’s financial standing.
"We're just offering up our pledge of credit as a security for the debt," said Calhoun County Administrator Ken Joiner.
The County Commission will vote Thursday on the proposal, Joiner said. He added that commissioners are already aware of the pending agreement.
While the county agreement commits a revenue source to the schools, it does not specify the source of the money, Joiner said. He said the resolution is being drafted to give commissioners the ability to select the option of using any legal funding source. Potential sources, Joiner said, are property and sales tax revenues.
A one-cent sales tax passed for schools by the County Commission in 2008 will not be obligated to the bond, officials said. That tax is divided among the county's five public school systems based on student population, and Jacksonville receives about $1 million from it each year.
Joiner said it is important to support the school system without obligating the commission and the county’s taxpayers to pay a specific tax to support the project for the life of the debt.
“They need a new school,” Joiner said.
Staff writer Laura Gaddy: 256-235-3544. On Twitter @LJohnson_Star.