Chambers County School Board discusses bond underwriter in consolidation process
Published 8:30 am Friday, January 19, 2024
As the consolidation of the two county high schools moves forward, Chambers County School District Superintendent Casey Chambley discussed the next steps during the school board meeting.
With the schematic designs on the way, the school board is starting to look to engage a bond underwriter for the project.
The schematic designs have been submitted to the Alabama Department of Construction Management. Once they have been reviewed and returned to the school board’s architects, the next step will begin.
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“There’s not a resolution for this today,” Chambley said. “Because there won’t be a resolution until after we’ve signed the agreement, and [the underwriting firm] would bring the agreement back to you from the bond attorneys.”
The school board needs to enter an engagement agreement with a bond underwriter in the coming weeks. Chambley said that he and Chief Financial Officer Cassandra Allen have met with four underwriting firms over the past several months and chosen Stegall Underwriting Firm.
With the schematic designs of the building done, the underwriting firm can make a more informed estimate for the funds needed to build the school, Chambley said.
The firm hopes to be within range of a $5 million bond; however, Chambley said they have built in a $4 million contingency. Chambley said it would be a 30-year loan.
Chambley said the next steps after that will be for the bond lawyers to draft a resolution and present it to the school board.
“We will present you with another document that will show you their fees,” Chambley said “And it will also show you a comparative fee and the rate that other systems [matching] our size, our credit rating, and borrowing the same amount of money.”
From there, the underwriting firm would take the agreed upon deal and sell the bonds in the bond market.
Chambley said that it’s a good time for the school district because the interest rates on loans have begun to drop again. With the election year, Chambley said he thinks the interest rates will continue to be stable.
“Interest rates today would allow us to borrow that amount with a debt service of about $5.6 million,” Chambley said.
Once the bonds were sold, the underwriter would again bring the bond pricing and fees to the school board for approval. Then, the superintendent and board chair would sign the deal and receive the money for the new school.
“We feel like that were a good time, ready to do this and ready to go,” Chambley said. “Things are moving forward really well, with the architects with schematic design. We’re still on pace to be able to release to you very soon, the first renderings of what the building’s going to look like.”
Looking ahead, Chambley and the school board have announced that the completed renderings for the new school building as well as the colors and mascot will be unveiled to the community during a ceremony at the Langdale Auditorium in February.
During the unveiling, the school board will have a ceremony commemorating any school in the district, even those that have closed over the generations.