CHARLESTON, W.Va. — The state School Building Authority has decided to refinance some of its debt to provide additional funds for county’s having a difficult time paying for school construction projects.
The SBA approved a plan to refinance bonds during a Wednesday meeting. The authority will go back to the market for a cheaper interest rate seeking $11.5 million in additional funding beginning next fiscal year and $18 million in fiscal year 2024. The money will be paid back over 20 years, according to SBA Director of Special Projects Sue Chapman.
“The market is relatively good,” Chapman told MetroNews. “We are using existing equity to leverage an increase in construction costs. We are selling West Virginia (to investors). We hope to get a better (interest) rate.”
The SBA decided the interest rate on the new debt is not to exceed 5%.
Excess Lottery funds make the payments on the debt.
SBA officials said the initial $11.5 million will used to help counties that had construction projects approved by the SBA in the April 2021 ‘Needs Grant’ cycle. Seven counties received $75 million funding but because of the pandemic, supply chain issues and inflation, the money has proved not to be enough.
The SBA hopes to get to the market in a matter of days.
Summers County Middle School
The Summers County school system was approved for $8.2 million needs grant funding from the SBA in that April 2021 meeting. The money will help build a new middle school addition to Summers County High School in Hinton.
Summers County School Superintendent David Warvel said bids for the job came back more than $2 million beyond the allocation.
“You’re looking at a lot of costs that didn’t factor in (originally)–a pandemic and a war has taken place. Everyone knows at this point and time prices are higher than anyone could have imagined,” Warvel told MetroNews Wednesday.
Warvel and the county-hired designers of the project have been working with the SBA to get costs down.
“Instead of having more windows, we just went with putting brick and mortar. Instead of having a few little extra things here and there within the school building, we just went down to the bare minimum at this time,” Warvel said.
There are non-negotiable’s of the project, according to Warvel, including 12 classrooms and a gymnasium.
Warvel said he hopes his county gets a little bit of extra money from the SBA refinancing.
Spencer Middle School
Roane County Schools received $13.9 million in the April 2021 SBA allocation for a new Spencer Middle School. Superintendent Richard Duncan told MetroNews Wednesday he’s not overly optimistic about the bids for the work that are scheduled to come in within the month.
“We would be extremely fortunate to come in at the budget that we set out there. We’ve seen some other districts go out with some major projects and totally blow out what their estimates were,” Duncan said.
Roane County has already been working on the design side of the project in hopes of cutting costs.
Duncan said he agrees with the SBA that the longer you wait the more expensive it’s going to get to build.
“We originally thought that if we waited it out a few months maybe we’d be able to get to a better state but I think the economy has shown it’s not ready to get back to normal anytime soon,” Duncan said. “The longer we wait, even if the current situation is resolved, we’re still going to see higher costs the longer we go out there.”
Other projects awarded funding in the April 2021 SBA funding cycle included:
Mercer County $9.6 million New PreK-5 school for Bluewell/Brushfork
Jefferson County $7.5 million New Shepherdstown Elementary, New Ransom Elementary
Greenbrier County $8 million Alderson Elementary relocation to Community Center
Mineral County $19.1 million New Frankfort Primary PK-4 school
Ohio County $18 million Renovations to six schools