USD 253 Emporia will now seek bids for a loan to finance a major infrastructure project across the district.
At their regular meeting on Wednesday, board members approved a purchase-lease agreement with Piper Sandler Companies, a multinational investment banking firm, to solicit bids for a multi-million-dollar loan. Clayton Kelley of Piper Sandler spoke with KVOE News Wednesday and explained the details of the lease-purchase agreement.
Kelley noted this is one of two avenues traditionally available to districts for financing major projects, with the other being a bond, like the one the district approved back in 2019. He says while the two options provide the same outcome, they do have some notable differences.
According to Kelley, Piper Sandler should have bids ready for presentation and consideration by the board at their November regular meeting. The reason for the solicitation of bids, with the board seeking roughly $8 million in funds, is to finance a better-than-$13.6 million project to upgrade HVAC units across the district.
Approval of the purchase-lease agreement followed approval of an Investment Grade Audit, a comprehensive, data-backed engineering and financial evaluation used to help support or justify a major capital investment project, performed by Trane, which identified the major needs across all of the district’s buildings. This process began roughly six months ago, according to USD 253 Assistant Superintendent of Business and Operations Josh Schwartz and USD 253 Superintendent Dr. David McGehee, who told KVOE News the project was not identified as part of the district’s cost containment efforts over the past year, but finances did play a role in the district identifying it as a major concern.
To be exact, the district has identified $5 million in funds from the 2019 bond as well as an additional $500,000 in capital outlay funds. Going back to Kelley’s breakdown of the leasing process, the loan, once approved and finalized, would have a 10-year lifespan with annual payments of just over $1 million.
Given the aforementioned cost containment process, which has included the pending closure of Logan Avenue Elementary School at the end of the current school year, KVOE News asked if the district had concerns regarding community reaction to the size of the investment. McGehee commended the question and explained that the two items are not related to one another, as the dollars being allocated by the district cannot be used for any other purposes.
With the funds identified by the district, as well as potential federal investment tax credit incentives ranging between $1.3 and $1.5 million, the district will be seeking a loan of roughly $8 million. Schwartz says once the loan is approved and finalized, work would likely begin as soon as possible.
McGehee also noted this will be a phased project with work taking place during breaks in the academic year so as not to disrupt or disturb the learning environment.
Additional details from Wednesday’s meeting can be found online at the district’s website USD253.org. The board will next convene for a study session on Wednesday, October 28th at 6 pm for the purpose of reviewing student success metrics inside the Mary Herbert Education Center.
