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Wake County authorizes up to $703.65 million installment financing agreement for school capital needs
Summary
The Wake County Board of Commissioners on July 7 adopted an authorizing resolution to issue a 2025 installment financing agreement not to exceed $703,647,000 to fund major school construction and renovation projects for fiscal years 2026–27; the county plans to convert the temporary bank loan to limited-obligation bonds over the next four years.
The Wake County Board of Commissioners on July 7 adopted an authorizing resolution to issue a 2025 installment financing agreement for the Wake County Public School System, not to exceed $703,647,000, to fund major school capital needs in fiscal years 2026 and 2027.
The draw program — a temporary bank loan structure the county calls a "draw program" — will be non-general-obligation debt that the county intends to convert to limited-obligation bonds (LOBs) over the next four years. "This is the second and final board action required for issuance of this draw program," said Todd Taylor, director of debt and capital strategy, during the presentation to the board.
Why it matters: the county estimates total capital needs for the schools over the two fiscal years at $833.3 million; the $703.647 million figure is the debt portion that the proposed draw program would provide. County staff said the approach produces cash-flow savings versus issuing traditional bonds up front and allows debt to be incurred as projects request draws.
Details and process: Taylor said the county conducted a public request-for-proposal to select a bank provider; Truist Bank submitted the lowest-cost bid and was selected to provide the draw facility. The county has identified five school properties that will be conveyed by the Board of Education to the county as collateral for the draw program; as the county issues LOBs, drawn amounts will be moved to separate deeds of trust supporting those LOBs. The Local Government Commission is scheduled to consider approval of the draw program on Aug. 5, the county anticipates closing the bank facility on Aug. 12, and the Board will consider appropriation of projects funded by the debt at its Aug. 18 meeting.
Planned projects: Taylor showed a sampling of projects that the draw program will fund, including a tear-down/rebuild major renovation at Brentwood Elementary School, a similar major renovation at North Garner Middle School, and the new Morrisville High School campus. The agenda item includes a full breakout of projects and county funding sources.
Board action: Vice Chair Myles moved to approve the authorizing resolution and transfer of certain school property to the county; Commissioner Waters seconded. The motion carried unanimously.
What’s next: county staff will convey deeds for the five pledged schools to the county, pursue LOB financings over the next four years to convert the temporary debt to permanent debt, and return to the board on Aug. 18 to appropriate projects funded by this program.
