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Macon County approves financing terms to build new Franklin High School, votes split 3-2
Summary
After a public hearing, the Macon County Board of Commissioners approved preliminary and final resolutions authorizing limited-obligation bonds to finance a new Franklin High School; the board voted 3-2 on both resolutions. The county expects a Sept. 11 bond offering and a Sept. 26 closing.
Macon County on Aug. 13 approved financing steps to build a new Franklin High School, voting 3-2 to adopt both a findings resolution and a final resolution authorizing limited-obligation bond financing.
Mitch Brigulio of Davenport Public Finance told the Board that a public sale of limited-obligation bonds was producing better interest rates than direct bank loans, and that the county expects the Local Government Commission to consider the application Sept. 10. According to Brigulio, the bonds will be offered Sept. 11, when interest rates will be set, and the closing is scheduled for Sept. 26 when funds will be deposited to start project spending. He said the planned bond issue will cover only the amount needed for the project, and that the county has a $62 million state grant toward the roughly $135 million project. Brigulio described the county's financing need as about $72.8 million plus financing costs and estimated that, at current rates, the total payback over about 20 years could be near $100 million.
The board took two separate votes. Commissioner Young moved to approve the preliminary resolution; Commissioner Antoine seconded. The preliminary resolution passed 3-2 with Commissioners Young, Antoine and Chairman Gary Shields voting yes and Commissioners Higdon and Shearl voting no. The board then approved the final resolution providing for terms and documents for the sale of limited-obligation bonds by the same 3-2 margin.
Commissioner Shearl said he would vote no because of continuing concerns about costs and site suitability; Commissioner Higdon also raised congestion concerns around the chosen site. Supporters said the financing structure (limited-obligation bonds secured by the school property) was a common approach in North Carolina and that the state grant makes the county's net cost lower.
Brigulio also reviewed draft financial policies for the county, saying they mostly codify practices already in effect; the board unanimously approved the financial policy guidelines.
What happens next: the county will proceed with the application to the North Carolina Local Government Commission and the underwriter-led bond sale timetable outlined by Brigulio. If the market sale proceeds as described, the bond offering on Sept. 11 should set final interest rates and the closing is scheduled for Sept. 26.
Actions at a glance: the board approved both the preliminary and final resolutions needed for bond financing; both measures passed 3-2.
