The Oconee County Board of Education has authorized the sale of $37.2 million in General Obligation Bonds for capital projects approved by voters in the Education Local Option Sales Tax referendum on March 16.
The Board took the action in a special called meeting that followed a budget hearing held by the Board on May 18.
The Oconee County Board of Commissioners finalized the action by approving the resolution at it meeting on Tuesday evening.
Oconee County Schools sold $23.5 million in bonds following passage of the current ELOST in 2016 and has paid off just a little more than half of the debt from those sales.
Saranna Charping, chief financial officer for Oconee County Schools, presented the 79-page bond sale resolution authorizing the sale of the $37.2 million in bonds to the Board at the called meeting on May 18.
Charping said the “blended” rate for the bonds will be 1.22 percent.
According to the minutes of the meeting “The Board asked pertinent questions regarding the Bond Resolution. Ms. Charping answered those questions.”
The entire meeting lasted three minutes.
Request For Details
According to the resolution, the bonds “shall be issued in the denomination of $5,000 each or any integral multiple thereof.”
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| Charping With (L-R), Board Member Kim Argo, Superintendent Branch, Board Member Michael Ransom, Board Member Burgess |
Board Member Tim Burgess asked Charping for the rates of bonds sold in the denomination of $5,000 and those sold in the denomination of $10,000, according to a video record of the meeting.
“I don’t have that broken out like that,” Charping said,. “I just have it all together, but I can get it for you.”
“Can you give us a schedule that shows the interest rates for the fives and the tens and then the debt service schedule for the fives and tens?” Burgess asked.
“We’ll get that information and bring it back to you,” Superintendent Jason Branch told Burgess.
Anisa Sullivan Jimenez, director of Communications for Oconee County Schools, told me in an email message on May 21 that “The information that the Board requested will be presented at the June Board meeting.”
Jimenez said she would not release that information prior to the June 7 meeting.
Voter Approval
In addition to approving the 1 percent Education Local Option Sales Tax on March 16, Oconee County voters also authorized Oconee County Schools to issue up to $42,950,000 in General Obligation Bonds.
That sales tax will run for five years and is capped at $48.5 million.
The $37.2 million in bonds that the Board authorized to be sold at its meeting on May 22 will be dated for June 9, 2021, and will begin to bear interest from that date.
Oconee County Schools will not begin collecting tax from the Education Local Option Sales Tax approved by voters in March until Jan. 1, 2023.
The existing tax doesn’t expire until the end of next year–2022.
School officials said they were seeking early approval of the tax to take advantage of a favorable bond market and to save money by beginning construction before costs increase due to inflation.
Payment Schedule
According to the Debt Service Schedule that is part of the resolution approved by the Board of Education, Oconee County Schools will begin interest payments on the bonds on Sept. 1 of this year–2021--and make its first payment against the principal on March 1, 2024.
The final payment is scheduled to be made on March 1 of 2033.
At that point, Oconee County Schools will have paid $12,530,159 in interest, bringing the total payment for the interest and principal to $49,730,159.
The resolution passed by the Board of Education states that Raymond James & Associates, Inc., agrees to purchase the $37.2 million in bonds from the School District “for re-offering to the public.”
The resolution also includes a Custodial Agreement with Oconee State Bank for the flow of money from the sales tax and the disbursement of those funds.
How Money Will Be Spent
In the campaign for ELOST VI, school officials and promotional materials said the money would be used for a list of capital projects.
Included was construction of the system’s third middle school at the Dove Creek campus in the far northwest of the county that now houses Dove Creek Elementary School.
The money also is to be used for classroom additions to Colham Ferry Elementary School, High Shoals Elementary School, and Malcom Bridge Elementary School.
Also planned are renovations to Oconee County Primary School, Malcom Bridge Elementary School, Oconee County Elementary School, and Rocky Branch Elementary School.
The money also is to be used to construct an instructional support center and for buses and technology.
Oconee County Schools has never released a time line for any of the projects, other than saying the plans are to open the Dove Creek Middle School by the Fall of 2023.
It also has not released cost estimates for the individual projects.
Colham Ferry Elementary
Oconee County Schools submitted site development plans and an urban forestry plan for a 10-classroom addition to Colham Ferry Elementary School to the Watkinsville City Council for review at its May 19 meeting.
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| From Document Submitted To Watkinsville View Looking North Toward Existing Buildings |
The School is within the city limits of Watkinsville.
I asked Jimenez on June 1 for a project description, time line, and cost estimates for that project.
Jimenez confirmed that the project had gone before the Watkinsville City Council and that it will be funded by revenue from the $37.2 million in bond sales from ELOST VI, but she said “Details on the 10-classroom addition are not available prior to Board approval.”
The plans submitted to the Council and displayed publicly at the May 19 meeting show a detached, one-building addition south of the existing buildings. The new building will be approximately 14,500 square feet in size.
Brock Toole, chief operations officer for Oconee County Schools, said at the Council meeting that construction will begin in late summer and be complete for the next school year.
Construction will require the removal of the butterfly garden, he said. It also will require the removal of 34 trees, according to the submitted urban forestry plan.
Council approved the site development plan and the urban forestry plan.
I also had asked Jimenez about time lines and cost estimates for other projects to be covered by ELOST VI, now that the bond sales have been authorized, but she said “Project information is not available prior to Board approval.”
Current ELOST
The Board of Education sold $23.5 in bonds after voters approved the current ELOST (ELOST V) in November of 2016. That tax also is 1 percent on sales in the county.
As of April 30, according to Charping’s report to the Board last month, the system had paid $13.4 million against the $25.9 million owed to retire those bonds.
Oconee County Schools will make another payment of $222,688 this calendar year.
As of March 30, Oconee County School had collected $26.3 million from the tax.
The school system is projecting that it will collect $39.9 million by the end of the collection period in December of 2022.
Calculation Of Savings
In March, following a meeting of the Oconee County Democratic Party, I asked Jimenez to respond to a comment from Ken Davis, party representative to the Oconee County Board of Elections and Registration.
Davis told the Democrats that Oconee County Schools, in the runup to the March 16 election, had reported to election officials that the school system would save $500,000 by seeking early approval of the ELOST rather than wait a year to get approval and issue bonds.
I asked Jimenez on March 23 if there was some document showing the calculation of savings from the early issuance of the bonds and if someone from Oconee County Schools or the Board of Election had communicated to the Elections Board about the savings.
Jimenez said there was no such document and that there was no communication to the Elections Board.
Bond Company
I asked “with whom I can talk about the bond sales” given that there was no document showing the savings.
“I was able to check with Saranna this morning,” Jimenez said, referring to Chief Financial Officer Charping.
“In a recent conversation with our bond company, they mentioned a $1 million cost savings by holding the vote in March 2021 as opposed to November 2021,” she wrote.
“You may also recall that some of the benefits of ELOST VI being voted on this month--rather than later this year--are that the school system can take advantage of historically low interest rates, avoid inflation costs, and begin projects much sooner.
“If you have any additional questions, please let me know and I will work with Saranna to get them answered for you,” she continued.
I asked Jimenez to “tell me the bond company OCS uses.”
Jimenez wrote that it is Raymond James, which, according to the resolution passed by the Board on May 18, will purchase all of the bonds for resale.
Video
I did not attend the called meeting on May 18, and Jimenez said that no video record was made of it.
The called meeting followed a budget hearing, which John Phillips, parent of students in Oconee County Schools, did attend.
Phillips recorded the short video below, which begins after Charping made her brief report to the Board regarding the resolution.
I am using it because it is the only video record of the brief meeting and it shows the exchange between Charping and Burgess.
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