The Kenton County Schools Board of Education approved roughly $60 million in debt for various renovation projects throughout the district this week, including renovations at River Ridge Elementary, Ryland Heights Elementary, Kenton Elementary and Taylor Mill Elementary.
The Board also approved two new construction bids from Monarch Construction for work at Kenton and Taylor Mill Elementary schools. Finally, construction contract amounts were amended for several earlier projects, the cost for which has gone up due to increased construction costs, according to Superintendent Henry Webb.
You can see a breakdown of the different amounts in the table below.
School Construction company Debt financing amount Total project cost River Ridge Ashley Builders $4,272,602 $4,850,332 Ryland Heights Schrudde and Zimmerman, Inc. $12,978,333 $12,978,333 Kenton Monarch Construction $22,577,618 $22,577,618 Taylor Mill Monarch Construction $20,351,447 $20,351,447
The district expects to finance the construction through the issuance of general obligation bonds, which are one of several debt instruments both school districts and cities use to finance big capital projects. What distinguishes general obligation bonds from other debt instruments, such as industrial revenue bonds, is that they are backed by the issuer itself.
Here’s how they work: The city solicits investors to buy bonds, in this case $60 million worth, which will provide the district with cash to finance the buildings’ renovations. The district is then fully on the hook to pay back the principal of that debt plus any interest. In a scenario where the project fails to generate revenue for the repayments, the district would have to make up the money some other way.
In some cases, this could entail raising taxes, although the district’s Director of Finance Susan Bentle didn’t think that would be necessary, given the district’s financial health.
“We are getting some really good rates on them,” Bentle told LINK nky, “and many times, we actually save money and don’t even have to issue that many. [Investors]’ll pay a premium to get our bonds … They’ll give us some money up front in order to even buy our bonds.”
“Beginning July 1 [the beginning of the new fiscal year] we’ll still have somewhere between $60 and $70 million in bonding potential, which is excellent,” Webb said. “And each year that grows – it depends on what the legislature does with the budget each biennium and what bonds we have that’s paid off.”
The interest rate for the bonds won’t be determined until they’re actually negotiated and sold, but they’ll be paid back over the course of 20 years.
Bentle actually presented the district’s tentative budget on Monday at the same meeting where the Board of Education voted to approve the bonds. The $60 million in bonds approved this week did not appear on the projections – a final budget for next year will come before the Board in September – but the one presented on Monday put the district in a budget surplus with $210.9 million in total revenues and $175.1 million in total expenditures.
You can read full tentative budget as presented to the Board of Education on Monday night here.
“I’m excited to continue to be able to do these general obligation bonds,” said Board Chair Jesica Jehn. “They’re really beneficial for our district.”