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Riverside board approves up to $4 million in TANs and lease-purchase financing after debate over costs and timing
Summary
After extended discussion about construction costs, interest rates and how far district funds will stretch, the Riverside Local Board approved a resolution authorizing up to $4 million in school improvement tax anticipation notes and a separate tax-exempt lease/lease-purchase financing resolution to fund building projects, including an 8-classroom addition and a new gymnasium.
The Riverside Local Board of Education voted to authorize not-to-exceed tax anticipation notes (TANs) of up to $4,000,000 and separately approved tax-exempt lease/lease-purchase financing (certificates of participation) to fund school-improvement projects after an extended debate over cost estimates, guaranteed maximum price (GMP) timing and market interest rates.
Board members and staff described the immediate priorities: constructing an eight-classroom addition and building a new gymnasium, removing students from moldy trailers and addressing infrastructure needs such as HVAC, windows and potential asbestos abatement. One board member noted an engineer's estimate of approximately $98,000,000 of recommended work districtwide and argued the board must act to avoid losing purchasing power to inflation and rising construction costs. Another member pushed for waiting until a GMP and alternate bids were available so the board could better understand exactly how far proposed borrowing would go.
On the TANs resolution, administration presented a debt-service schedule that assumed a 5.1% interest rate pulled from then-current market data, and staff said market movement could lower that cost before issuance. Opponents questioned whether the proposed cap (TANs plus anticipated COPS) would be sufficient if unforeseen items emerged. Proponents countered that doing nothing had cost the district purchasing power during prior inflation and that taking financing opportunities while market rates fell would allow the district to fix urgent safety and comfort issues for students.
After discussion the board took roll-call votes and approved the TANs resolution (recorded roll-call included multiple ayes and nays and the motion carried). The board then approved the separate resolution authorizing installment/lease-purchase financing or certificates of participation (also carried by roll-call vote).
Board members requested additional financial details: staff said the owner's representative and the design team would deliver the GMP package within about two weeks and that alternate bids and line-item estimates (roofs, HVAC, windows) had been requested to allow prioritization once exact numbers were available. District staff emphasized the intention to apply funds to the highest-priority, safety- and habitability-related items first and to take remaining funds as far as the money will go.
Next procedural steps: staff will present the GMP and alternates to the board when available and continue coordinating with the owner's rep and financing counsel on timing and market conditions.
