- The school board takes a look at the numbers during the work session, seeking to begin improvements.
The Polk County Board of Education has at lot of plans for improvements at schools across the district, and members will soon be looking at a vote for bond sales to pay for all the projects put forth during the latest E-SPLOST vote.
Raymond James and Associates were back once again before the school board to provide figures on how much the system will get back from the bond market as they seek to get proceeds from sales now to pay for projects while the 2017 Education-only, Special Purpose Local Option Sales Tax funds come in month-to-month.
It is the latest round of sales for the sixth SPLOST sought by the school district and approved by voters on the 2017 ballot that includes new workspaces for Cedartown’s various art and performance programs, a new Agriculture Education building for Rockmart, heating and air conditioning repairs at various schools, general repairs and enhancements for the middle and high school’s athletic facilities, and new roof repairs for schools district-wide.
Here’s how the plan is set to work: the district sells the securities to receive immediate payment they can use to upgrade the schools, while bond-owning patrons can sit on their purchase as it matures and gains interest.
The school district will eventually have to repay their customers in full with some interest, but the newly approved E-SPLOST will be bringing in sales tax through 2026 to pay back the system’s dues, totaling up to around $20 million.
By comparison, Raymond James and Associates puts estimates of E-SPLOST collections as high as $23 million without any growth at all, and upward of $31 million and more at 6 percent growth.
However, Polk School District is capped in this latest draw on E-SPLOST to only collect $28 million, one penny at a time over the next 8 years.
“What we’re always looking for is a 12 month picture,” Tom Owens of Raymond James and Associates said. “What is one year’s worth of sales tax? We then want to compare that to your highest debt-service payment.”
Owens went on to add that “we want to make sure those numbers match-up and that the sales tax is more than enough. The obvious reason is that we want to be able to pay the bonds, but the other reason is that these bonds are general obligation bonds. So, if that sales tax ever fell short, the school district would need to come up with payment.”
The general outlook for the district’s sales tax was positive. Through ESPLOST, Polk brought in a total of $4,688,179 in 2017.
The year’s monthly average was $390,682, and 2018 is off to a powerful start thanks to January raking in a record high of $449,652- the most of any month in the last 7 years.
“You’ve had a very positive situation in sales tax the past year,” Owens said during the Feb. 6 meeting. “I think in every month but one, you had a better collection in 2017 than you did the year prior. For the year, you experienced a 4.93 percent year over year growth- which is fantastic.”
However to ensure there is no revenue shortfall when the school system has to meet the obligations of the bond payments, they took a step needed in the process by seeking a vote from the Polk County Commission to guarantee that if necessary, they would raise the school system’s millage rate for property taxes if SPLOST revenues came in less than expected.
County commissioners approved that measure after some questioning as to why it was needed by Commissioner Marshelle Thaxton. He wanted clarification as to why the process was needed for their vote, when the Board of Education already is responsible for setting a millage rate annually.
Superintendent Laurie Atkins and attorney representing the school board Carey Pilgrim said the process was needed as part of the steps required to ensure bond purchasers that funds would be available to pay them back, and no more.
The approximate $20 million the county is looking to obtain from this move has already been pledged to construction fees, and the county unanimously approved R.K Redding Construction as the management firm for the upcoming projects.
“They’ve served us well and we’ve been pleased to with the services they have provided in the past, so we’re definitely pleased to continue working with them,” Superintendent Laurie Atkins said.
An initial bond payment of $17,690,000 will be delivered on April 1, and the construction is free to begin soon after, but the district is expected to keep its end of the bargain by paying the first interest payment on Sept. 1, 2018, the first principal payment on March 1, 2022, and the final principal and interest payment on March 1, 2026.
The district will also make an interest payment every six months.
“To me, this is really exciting because it really is allowing us to begin our projects from SPLOST,” Atkins said to the Raymond James crew. “I just wanna say thank you so much for all of your assistance and help in getting us to this point in the sale of bonds.”
Editor Kevin Myrick contributed to this report.