Bonds help fund Forest Circle remodel
by The Press and Standard | September 27, 2018 5:00 am
Last Updated: September 26, 2018 at 9:10 am
The General Obligation Bonds to be used to help cover the cost of the renovation of the former Forest Circle Middle School went on sale Sept. 20.
In February of this year, the Colleton County School Board approved issuing the bonds and a five-mill increase in the district’s debt service millage to cover the principal and interest on the bonds. The increase in the debt service millage did not have to go to the voters for approval.
According to the district, the increased millage will translate into about $20 more in property taxes on a home valued at $100,000.
School District Finance Director Emily Temple told the board that the school district had received “a very good rating” from Moody’s Investors Service, the school district’s bond rating agency, prior to the sale of the bond. She credited the board’s conservative approach to financing as part of the reason for the rating.
Moody’s Investors Service has assigned an A2 underlying rating and an Aa1 enhanced rating to the school district’s bond sale.
Moody’s, in a press release announcing the rating analysis, stated that “Moody’s has affirmed the A2 underlying rating on $9.9 million of outstanding parity general obligation debt and the A3 rating on the district’s $68.1 million of outstanding installment purchase revenue bonds.”
According to the press release, “The A2 underlying rating reflects the district’s sizable and growing tax base, below-average resident wealth levels, a satisfactory fund balance position that is maintained at levels lower than similarly-rated districts nationwide, a manageable debt burden, and an above-average pension liability.
“The A3 rating on the district’s outstanding installment purchase revenue bonds incorporates the risk of nonappropriation and the more essential nature of the financed projects and pledged assets.
“The Aa1 enhanced rating is based on the additional security provided by the South Carolina School District Enhancement Program (SCSDEP). As the SCSDEP is a state-backed program, the enhanced rating shadows the State of South Carolina’s rating (Aaa stable) and consequently carries the stable outlook.”
Temple said the millage increase will be included in tax year 2019. The plan is to repay the bonds in seven years.
Turning the former middle school into a new home for the school district administration, the adult education program and alternative education program is expected to cost approximately $7 million. A fund transfer of $1.25 million from the capital improvement budget will be combined with the bond proceeds to cover the anticipated costs.
Hilton Head architectural firm FWA Group estimated the construction costs will be approximately $5,192,739.
The breakdown of the construction expenses includes:
• $596,063 for site work, parking and landscape improvements.
• $3,457,046 for renovation work on wings one and two.
• $733,821 for renovation work on wing three.
• $180,689 for renovations to provide a boardroom.
• $225,120 for a sprinkler system for fire protection.
The remainder of the funds generated by the bond and a fund transfer will cover a number of other renovation costs including $500,000 for information technology and audio-visual systems, $379,000 for professional services and $350,000 for furniture.
The main building, 60 years old, and an addition constructed in 2005 were closed at the end of the 2011-2012 school year when the district decided to consolidate the middle schools and turn the old Colleton County High School into a middle school.
Since the 53,600-square-foot building was closed, it has sustained has suffered a great deal of vandalism.
Under the plan, the classroom wing constructed in 2005, which measures 26,100 square feet, will be renovated to become home for the adult education and alternative education programs.
The alternative education program currently operates at the Colleton County Middle School. The move to the former middle school will allow the district to expand that program.
The adult education program currently operates at the school district’s Colleton Annex Learning Center at 609 Colleton Loop. The district anticipates putting the learning center up for sale.
The district offices, currently located at 213 N. Jefferies Blvd., are in a building owned by the county.
School Superintendent Dr. Franklin Foster told the board members he hoped that the district will be able to undertake the move into the new facility the week of July 4, but that date appears to be dimming as an option.
He explained that the state’s Office of School Facilities has reviewed the initial drawings for the renovation and returned its findings.
The architect is now working on implementing the recommendations and producing the construction documents. Once completed, they will be sent to the state office for review and approval.
Following the meeting, Dr. Foster said that the school district hoped to be able to seek bids on the construction work, but that is now unlikely to occur. The district cannot seek bids on the work until the Office of School Facilities has given its final approval to the design documents. The state office remains involved throughout the construction until completion.
After the bids have been approved, Foster explained, it is anticipated that the contractors will need eight or nine months to finish the work and then the school district will need one or two months to prep everything after construction.