Mercer County board approves elementary construction contracts and authorizes $33.64 million bond issuance
April 26, 2024 | Mercer County, School Boards, Kentucky
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The Mercer County Board of Education on a voice and roll-call series of votes approved a package of contracts and funding steps to advance a new elementary school project and related work, and the board authorized the Mercer County School District Finance Corporation to issue revenue bonds with a principal amount of $33,640,000.
Board members voted to award construction contracts for the elementary project (base bid plus alternates 2–8) and approved associated direct purchase orders, subject to contract changes by board council. Construction consulting and services approved included commissioning to ZH Commissioning in the amount of $42,920 and testing and balancing with an optional building air-tightness test, which staff recommended to optimize building efficiency.
Finance staff outlined the plan to deposit bond proceeds in a construction building fund account with Whitaker Bank at a negotiated rate (described as ‘‘federal funds high rate minus 50 basis points’’). The board approved opening that account by roll call, with district representatives recorded as voting in favor during the meeting.
Lincoln of RSA presented the financing analysis during a recess convening of the district finance corporation. He explained revenue sources used to support the bond, including local tax 'nickels,' capital outlay, and state equalization payments. Lincoln modeled conservative interest-rate scenarios and showed that an anticipated state equalization increase of $90 per student (as reflected in the budget measures discussed at the General Assembly) would materially improve the district’s near-term coverage of debt service. Staff cautioned that modeling excluded a $1,500,000 geothermal rebate that the district hopes to receive and otherwise used conservative assumptions.
Board members asked about timing and contingencies for higher debt service in the near-term years. Staff and the consultant said the district has set aside budgeted funds as a cushion and that the bond sale timeline targets closing and posting of funds roughly 7–10 days after sale, with funds expected in May if timing holds.
The board approved the revised BG-1 project budget form (staff cited overall project costs and soft costs listed on the revised BG-1) and a $0 change order to substitute a plumbing subcontractor on the middle school contract for coordination reasons. The board then approved a resolution authorizing the Mercer County School District Finance Corporation to issue $33,640,000 in revenue bonds; the resolution passed by roll-call vote.
The approvals will allow the district to proceed with contractor mobilization and project payments as the finance corporation finalizes the bond sale and the district executes the contracts.
Board members voted to award construction contracts for the elementary project (base bid plus alternates 2–8) and approved associated direct purchase orders, subject to contract changes by board council. Construction consulting and services approved included commissioning to ZH Commissioning in the amount of $42,920 and testing and balancing with an optional building air-tightness test, which staff recommended to optimize building efficiency.
Finance staff outlined the plan to deposit bond proceeds in a construction building fund account with Whitaker Bank at a negotiated rate (described as ‘‘federal funds high rate minus 50 basis points’’). The board approved opening that account by roll call, with district representatives recorded as voting in favor during the meeting.
Lincoln of RSA presented the financing analysis during a recess convening of the district finance corporation. He explained revenue sources used to support the bond, including local tax 'nickels,' capital outlay, and state equalization payments. Lincoln modeled conservative interest-rate scenarios and showed that an anticipated state equalization increase of $90 per student (as reflected in the budget measures discussed at the General Assembly) would materially improve the district’s near-term coverage of debt service. Staff cautioned that modeling excluded a $1,500,000 geothermal rebate that the district hopes to receive and otherwise used conservative assumptions.
Board members asked about timing and contingencies for higher debt service in the near-term years. Staff and the consultant said the district has set aside budgeted funds as a cushion and that the bond sale timeline targets closing and posting of funds roughly 7–10 days after sale, with funds expected in May if timing holds.
The board approved the revised BG-1 project budget form (staff cited overall project costs and soft costs listed on the revised BG-1) and a $0 change order to substitute a plumbing subcontractor on the middle school contract for coordination reasons. The board then approved a resolution authorizing the Mercer County School District Finance Corporation to issue $33,640,000 in revenue bonds; the resolution passed by roll-call vote.
The approvals will allow the district to proceed with contractor mobilization and project payments as the finance corporation finalizes the bond sale and the district executes the contracts.
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