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Financial advisor outlines financing options and project costs; board warned of bid overruns on several school projects
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Summary
Ford and Associates advised the Nassau County School Board that financing generally occurs late in the planning process and can take 3–6 months; the board heard project scopes (Callahan, Yulee consolidation, Pages Dairy elementary, Fernandina Middle School) and staff recommended contractors for a welding classroom ($2.3M recommendation, ~$600K over estimates) and a $3.8M mechanical retrofit at Fernandina Beach High School.
John Ford of Ford and Associates told the board on April 6 that school construction financing typically follows selection of architects and completion of bid pricing, and that closing financing usually occurs when construction contracts are signed. "It's a 3 to 6 month process," Ford said, summarizing the district's options for debt structuring and timing.
Ford outlined common financing types used by Florida school districts, including certificates of participation (COPs), which he described as frequently used because COPs can leverage existing local capital‑improvement millage and avoid creating separate dedicated revenue sources. He cautioned that the credit profile for financing depends on the underlying assets: a new school generally supports stronger credit than a renovation. Ford also described master‑lease approaches that, when structured broadly, can strengthen security and reduce borrowing costs.
Board members asked about maturities and structuring. Ford noted Florida law limits COP maturities to 30 years but the district can structure amortization schedules—interest‑only periods, heavy initial principal payments or balloon features—to match cash‑flow needs. He said his preliminary read of current market rates suggested a range near 4.5–5% depending on term and the district’s credit at issuance.
Project details discussed by staff included conversion of Callahan to an intermediate school, a K–5 consolidation in Yulee that would close Yulee Primary and make Yulee Elementary K–5, a new elementary near Pages Dairy/Chester Road, and an extensive Fernandina Middle School repair program (multipurpose room/cafeteria, media center and roughly 20 classroom upgrades to remove portables). Staff said the district typically sees a minimum two‑year schedule from architect selection to completion and that financing work often begins about 12–15 months into that timeline.
Contract recommendations and bids: Staff recommended awarding phase 2 of the YSAC welding classroom addition and demolition to Scorpio Construction for up to $2,300,000; they noted the low bid came in roughly $600,000 over earlier estimates and the district had a $500,000 grant to offset program costs. Staff also recommended Thomas May Construction for the Phase 3 mechanical retrofit at Fernandina Beach High School for an amount not to exceed $3,800,000.
What happens next: Staff will return with comparative analyses, updated market rate estimates and recommended sequencing if the board selects projects for near‑term financing. Ford offered to provide a rate analysis to the board later in the week. Board action on specific contracts and project financing will appear on the regular agenda.
