New Kent supervisors hear options to finance new elementary school
With the wheels in motion to construct a new elementary school in the Quinton area of New Kent, county supervisors heard the possibilities to finance the project as part of Wednesday mornings work session.
Ted Cole of Davenport and Associates addressed New Kent’s Board of Supervisors about varying methods to finance the project that ranges between $28 million to $35 million to construct. Cole commented about the current funds that could be applicable to assist with the construction. His first comment talked about how the county has a $5 million one-time use in the school set aside for construction projects. Cole also mentioned that a one-time amount of approximately $4 million from Colonial Downs reopening could be applied to assisting with the proposed borrowing of those funds.
The financial consultant provided four different scenarios of how the money could be applied to assist with the loan.
Scenario one would require the board of supervisors to borrow the entire $35 million and use the $5 million and $4 million mentioned above to supplement the debt. This will result in payments of $1.9 million over the net 25 years, with no tax increase related to the schools until the year 2027, where it would cost tax-payers half a penny.
Scenario two consisted of borrowing $30 million and using the $5 million in the set-aside fund as an upfront payment. The $4 million from Colonial Downs would be used to offset debt, with an expected increase of one-and-a-half pennies in the future.
Scenario three revolved around using all $9 million to lower the debt service for the school project to $26 million, resulting in no revenues or reserve for the early years. While this choice lowers the overall borrowing, it will result to a possible tax increase of four cents (three cents if implemented by 2021). However, the increase could be offset by incoming revenue from the county.
Scenario four is similar to scenario two with the exception of just using the $5 million upfront and not use the remaining $4 million accumulated from Colonial Downs. This option would see an increase on the tax rates by five pennies around 2025.
“I don’t think there is one right or wrong choice in this,” Cole said to the county leaders. “It’s just the way you want to pay for it.”
While county leaders did not have to make a decision, board members discussed possibilities including using the one-time funds from Colonial Downs to pay for other outstanding debt. Related talks saw County Administrator Rodney Hathaway, and finance department members Mary Altemus and Larry Clark chime in about the pre-fixed rates on current loans the county is paying on.
A decision on the method of payment is expected to be made by county leaders within the coming months. A public forum about the new elementary school will take place on Sept. 30 in New Kent High School’s media center. The school is projected to have an opening day of August 2021.