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Board hears proposal to validate up to $200 million bond for capital projects
Summary
Attorney presenting a judicial-validation resolution told the Montgomery County Public Schools board the first phase of a bond issue would fund Percy Julian and preliminary Capitol Heights costs, with authorization capped at $200 million and a 5.99% maximum interest rate; board discussion followed and staff will return with financing details.
Montgomery County Public Schools trustees on May 12 heard an overview of a judicial-validation resolution that would authorize the district to proceed with a bond issue tied to an earlier ad valorem referendum. Board counsel’s presentation described the measure as a first phase focused primarily on the Dr. Percy Julian High School capital project and some preliminary costs for Capitol Heights Middle School.
Attorney Kane Bernett summarized the framework the resolution would authorize: an up-to-$200 million bond issue, financing to proceed only if final terms remain within specified parameters, and a cap on the initial interest rate at 5.99 percent. Bernett said the district would retain the right to prepay or refund the bonds after 10 years if market conditions make refinancing advantageous, and that the issuance would be routed through the state Department of Education review process. He estimated a potential closing in 60–75 days, subject to market and review timelines.
Bernett told the board the resolution document runs 27 pages and that the district’s finance team, along with Rice Advisory and the lead underwriter, Bank of America Securities, would finalize the precise offering amount and structure. He emphasized the $200 million figure is an upper bound and that staff will return with a narrower recommendation once underwriting work is complete.
Board members asked clarifying questions but did not take a final vote on the resolution at the meeting. The presentation was framed as Phase One of a multi-step process: authorize parameters tonight (presentation), complete underwriting and review, then seek a subsequent approval to close on final terms. The attorney said funds, if issued, would be used first to carry out remaining work on Percy Julian and to cover initial preliminary costs at Capitol Heights.
The meeting record shows no formal vote on the resolution on May 12; the board may be asked to act at a later meeting once finance staff provide final terms and a recommendation.
The board will receive more detailed cost and schedule information from the district finance team as Rice Advisory and the underwriter refine pricing and structure.
