Governor hopes to sell $1 billion in school bonds in single sale
By Phillip Rawls
Associated Press Writer
MONTGOMERY — State officials hope to speed up school construction projects by selling more than $1 billion in school bonds all at once rather than spreading out the sale over two years.
The Alabama Public School and College Authority, headed by the governor, voted Monday to hire financial advisers and lawyers to work on a single bond sale late this year — provided the experts say it's workable.
When the Legislature approved the $1.07 billion bond issue in May, the Riley administration was planning to sell the state's largest school construction bond issue in increments over two years. But then state Superintendent of Education Joe Morton, who serves on the authority, explained that many school systems were planning projects so big, they couldn't begin until their full share of the bond issue was available.
"It became apparent we needed to do a bond issue for $1 billion," state Finance Director Jim Main said at the authority meeting.
"It's an exciting proposal and one needed to get the projects moving in all our districts," Morton said.
They said schools that already have their building plans and contractors lined up could begin work shortly after the bonds are sold.
The authority recently sought proposals from Alabama firms for doing work on the bond issue and accepted the lowest proposals Monday.
Attorneys John Harrell and Stan Gregory of the Bradley Arant law firm were hired as bond counsel for $43,500. Mason Davis, Tim Davis and Scott Sims of Sirote and Permutt were picked for authority counsel for $17,500. And Preston Bolt and Nick Greenwood of Hand Arendall were chosen as disclosure counsel for $75,000, Main said.
The authority also selected Public FA Inc. of Huntsville, headed by Philip Dotts, to be financial advisers, with the fees for its staff averaging about $145 per hour, Main said.
Main said state officials will await advice from the experts before deciding to go with one big bond sale, but he believes the state's tax revenue is strong enough to support a single sale.
The bond issue is the state's first for school construction projects since 1998. It will cost the state an estimated $81.2 million per year for 20 years to pay off, according to fiscal experts.
The bond issue will provide money to every city and county K-12 school system, ranging from $51.5 million in Mobile County to $618,908 in Linden, and will fund construction projects at two-year and four-year colleges.
It will also include $24 million to build a training center for state troopers and correctional officers at Wallace Community College in Selma. There will also be money to improve the facilities of the state Department of Forensic Sciences: $7 million at Auburn University and $4 million at the University of South Alabama.
The bond issue will provide two pools of discretionary money, one overseen by the governor and the other by a committee where legislative leaders hold half the seats. The legislative committee will have $55 million and the governor as much as $100 million, depending on how much interest the bonds earn after they are sold and before the money is paid out.
Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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