Carson City School District contemplates bond issuance priorities for capital projects
The news is helpful to the board and administration, which are taking several steps this summer to improve school facilities. The board also continued discussions on the purchase of the former Christian church in Capital and seeks financial capacity to move forward with the Capital Improvement Plan.
On June 22, Andrew Feuling, director of tax services and bond adviser Marty Johnson of JNA Consulting Group, gave a presentation on the district’s financial position and discussed a possible bond issuance as early as this fall to cover the cost of capital projects in 2022 and beyond.
Of the total $47 million estimated for bonds, or funds approved by voters to be used specifically to buy, build or maintain school facilities, Johnson reported that the amount would be spent in roughly three sums: $12 million available this fall, $15 million in June 2023, and $20 million in 2025.
But the timing for use can be accelerated or delayed, and the relocation of the bonds ultimately depends on the goals of the school district or current projects under the Capital Improvement Plan.
Construction costs have risen, but the increases have impacted the neighborhood’s current operations. The Eagle Valley Middle School expansion, which will allow for the repurposing of Fremont Elementary School and capacity at Carson Middle School, is now expected to cost approximately $14 million. This has gradually increased from the initial estimates of $8.2 million in 2017, Feuling noted. The artificial turf in the Carson High School stadium is being replaced and the district’s administrative office is being renovated. In addition, a roofing project at Bordewich Bray Elementary School is in order.
A December 2019 bond issue for $11.9 million for the Eagle Valley expansion then left a balance, according to Feuling, and another bond is now needed for ongoing work.
Johnson said at the last board meeting with the $12 million available in bonding capacity this fall, the amount would cover an estimated $7 million more needed for Eagle Valley’s balance and provide additional if needed for the purchase. of the former Capital Christian Church real estate on Snyder Avenue, which has been pending for more than a year, or other major projects, Feuling said. Options include roofing or asphalt and door replacement projects.
“With the capacity that we seem to have built here, other opportunities are coming in the short term,” Feuling told the board.
Johnson, who has served the district since the 1990s, gave an overview of the state of the financial markets, explaining earlier this year that Moody’s Investors Service downgraded its bond rating from Aa2 to Aa3, primarily as a result of Moody’s changes in “how it world sees,” he said.
Despite the shift, the rating remains excellent among Nevada’s school districts, and its $50 million total funding capacity gives Carson City the flexibility to use it as it sees fit for the next five years, with Johnson adding that now is a positive time to to take advantage of current rates to spend on projects.
In addition, the passage of Senate Bill 450 is this legislative session, which authorizes school boards to issue general obligation bonds to raise funds for the construction, design or purchase of new school buildings, conversion or expansion of their facilities or land, or to Acquiring new sites to build a school extends the district’s rating to 2035.
Johnson said if the board decides to go ahead with a bond issuance, it can prepare a resolution for July 27 at the earliest to sell the bonds, close and lock interest rates on current terms so the district can can continue with the projects with which it decides to proceed.
Trustee Stacie Wilke-McCulloch thanked Johnson for his help and insight, but noted that the $50 million grand total didn’t seem like enough to build a new school. Feuling noted no, compared to Washoe County School District’s cost of $200 million per high school or $40 million to $80 million for a new high school.
Board chairman Joe Cacioppo asked what it would take to improve the district’s bond rating, and essentially, Johnson said, nothing can help Nevada’s districts.
“I don’t think any of the school districts will have an upgrade in their rating for a long time,” he said.