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Oak Hill building corporation approves lease amendment and bond issuance to fund $25.5 million HVAC project
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Summary
The Oak Hill School Building Corporation approved a lease amendment and a supplemental trust indenture to issue bonds—up to $25.5 million—to fund HVAC upgrades (vertical unit ventilators) at five schools; the body said the plan aims to preserve the district's levy around 3.5.
The Oak Hill School Building Corporation approved two resolutions to finance a planned capital project that would install vertical unit ventilators (VUVs) in five district schools and fund related work.
The corporation voted to adopt a form of amendment to a 2013 lease and to approve a first supplemental trust indenture authorizing the issuance of bonds to add financing for the project. The chair told members the financing would be repaid over about 22 years and that the corporation's maximum proposed borrowing capacity for the project is $25,500,000, which the chair said is intended to let the district keep its levy at roughly 3.5 rather than raise taxpayers' annual payments.
The chair described the financing mechanics: when a school corporation requires a lease above a statutory threshold it uses the building corporation to hold the property and issue debt; the school then repays the building corporation annually. The chair referenced financial materials in the meeting packet (identified in the transcript as from "Maker Tully") that show current debt falling off in the next few years, which creates capacity for the new borrowing.
On the project scope, the chair said the work would standardize heating and cooling equipment by installing VUVs in each building so that units and their controls are uniform across the district. Skillman was identified as the firm that provided the initial cost estimates two years ago; the chair noted prices may change and alternates were included in the bid documents in case lower bids allow additional work.
The chair outlined the procurement and funding timeline: issue bids in August, hope to award in September, and secure financing in November; the chair said the bond sale is planned for Nov. 10. The chair also noted a previous bond sale had produced a lower-than-expected interest rate, which allowed the district to obtain more proceeds than anticipated.
On construction timing, the chair said work would begin next spring with one building (likely the junior high) and proceed in phases (four to eight areas at a time). The plan calls for temporary classroom relocations within buildings; the chair said exact durations per phase were not known.
Both resolutions were moved and seconded during the meeting; the chair called the votes and recorded approval. The chair also noted that if the district does not spend the full $25.5 million it will not be obligated to issue that full amount.
Next steps: the corporation will move forward with procurement and the bond issuance process; specific award dates and phase schedules will be set as bids are evaluated and financing is finalized.
