County, schools discuss plans; middle school

Should a middle school come to pass, where the funding would be attained was a topic of discussion during the March 13 joint meeting of the Alleghany County Board of Education and the Alleghany County Board of Commission. County Manager Don Adams noted the three options are bond referendum, certificate of participation (COPS) and installment purchase.

Following a two-hour discussion on facilities, the boards opted to have an additional meeting to discuss the matter on April 10 at 5 p.m. at the board of education.

A bond referendum would require the issue to appear on a ballot and then the money would be raised through the issuance of bonds, which would be paid back by the county. Adams explained Tuesday that a bond guarantees the county’s taxing authority as collateral for the bond. Meanwhile, a certificate of participation is a bond that does not require a referendum and uses the property as collateral.

Finally, an installment purchase option would be an installment purchase, wherein the deed to the property would stand as collateral for the loan. An installment purchase arrangement was used to purchase Sparta Elementary School’s addition in the mid 1990s.

Adams reminded both boards that the county has to go to the Local Government Commission to attain loans, and they have a 15 percent cap on loans, which means the county can owe no more debt payments than 15 percent of its annual operating budget. The county is currently near the 10 percent level and a substantial loan, such as one large enough to pay for a middle school, would put the county very near to 15 percent.

A loan of this size will limit us from borrowing any significant amount of money for at least three to five years, said Adams. “I’m not talking about borrowing $100,000 for equipment and things of that nature,” he said. “I’m talking about all of the sudden, you need maybe two million (or) $3 million. It basically takes us to our capacity, as far as borrowing amount.” He pointed out later that the county might be able to overshoot the cap in an extreme emergency.

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