Assessing its capital projects in progress and having resumed discussions on the potential Snyder Avenue property purchase, the Carson City School Board has approximately $50 million available for construction or facility improvements for the next five years, of which about $47 million could be issued in bonds as needed.
The news is helpful for the board and the administration, which is proceeding with several undertakings this summer to improve school facilities. The board also continued talks about purchasing the former Capital Christian church site and seeks to ensure financial capacity to move forward with its Capital Improvement Plan.
On June 22, fiscal services director Andrew Feuling and bond adviser Marty Johnson of JNA Consulting Group gave a presentation regarding the district’s financial position while discussing a possible bond issuance as early as this fall to cover capital projects costs in 2022 and beyond.
Of the total $47 million projected for bonds, or funds approved by voters to be used specifically for purchasing, building or maintaining school facilities, Johnson reported the amount would be dispensed approximately in three sums: $12 million to be available this fall, $15 million in June 2023 and $20 million in 2025.
But the timing for use can be accelerated or deferred and the movement of the bonds ultimately depends on the school district’s goals or its current projects based on its Capital Improvement Plan.
Construction costs have been rising, but increases have impacted the district’s current work. Eagle Valley Middle School’s expansion, which will allow for the rezoning at Fremont Elementary School and ease capacity at Carson Middle School, is now expected to cost about $14 million. This has gone up gradually from initial estimates of $8.2 million in 2017, Feuling noted. The artificial turf at Carson High School’s stadium is being replaced and the district’s administrative office is being remodeled. Additionally, a roofing project at Bordewich Bray Elementary School is in order.
A bond issuance in December 2019 for $11.9 million for the Eagle Valley expansion then left a balance, according to Feuling, and another bond now is necessary for ongoing work.
Johnson said at the last board meeting with the $12 million available in bonding capacity this fall, the amount would cover an estimated $7 million more needed for the balance of Eagle Valley and provide an extra sum as needed for the purchase of the former Capital Christian Church property on Snyder Avenue, which has been under consideration for more than a year, or other major projects Feuling said. Options consist of roofing or asphalt and door replacement projects.
“With the capacity we seem to have built here, in the near term, there’s other opportunities to come,” Feuling told the board.
Johnson, who has served the district since the 1990s, provided an overview of the state of financial markets, explaining earlier this year Moody’s Investors Service downgraded its bond rating from Aa2 to Aa3, mostly due to Moody’s changes in “how it sees the world,” he said.
Despite the shift, its rating remains excellent among Nevada school districts, and its total $50 million funding capacity leaves Carson City with flexibility to use it as it deems fit during the next five years, with Johnson adding it’s a positive time to take advantage of current rates to spend on projects.
Additionally, the passage of Senate Bill 450 this legislative session, which authorizes school boards to issue general obligation bonds to raise funds for the construction, design or purchase of new school buildings, remodeling or expansion for their facilities or grounds or to acquire new sites upon which to build a school, extends the district’s rating through 2035.
Johnson said should the board decide to move forward with a bond issuance, the earliest it could prepare a resolution is July 27 to sell the bonds, close and get the interest rates locked in for the current terms, enabling the district to proceed on the projects with which it chooses to proceed.
Trustee Stacie Wilke-McCulloch thanked Johnson for his help and insight, but noted overall it seemed the total $50 million would not be enough to build a new school. Feuling noted it is not, compared to Washoe County School District’s costs of $200 million per high school or $40 million to $80 million for a new middle school.
Board President Joe Cacioppo asked what it would take to improve the district’s bond rating, and essentially, Johnson said for now, nothing any of Nevada’s districts can do will help.
“I don’t think any of the school districts will have an upgrade in their rating for a long time,” he said.