“With these bonds, systems can repair, renovate and construct much-needed schools while also stimulating our economy,” said Gov. Bob Riley, who announced Thursday the allocation of $236 million in interest-free bonds for 46 school systems across Alabama.
St. Clair County was allocated $829,000 for school repairs and construction.
St. Clair Schools Superintendent Jenny Seals said they had applied for $1.5 million.
“At first, we received word that we had received about $724,000,” Seals said. “Evidently, since proration, there were some school systems that decided to turn this money back over to the state department. We then received word that the were receiving $829,000.”
Seals said the intention is to use the money to renovate Ashville Elementary School.
“We are looking at adding 8 to 10 classrooms and we estimate this will cost about $1 million,” Seals said.
Allocations of the bond money are based on a formula taking into consideration each system’s ability to repay the bonds, the percent of students on free or reduced lunch, and per pupil expenditures from local funding sources.
“The ability of the state to sell bonds for all school systems at once was brought about by a bill adopted in special session of the Legislature earlier this year,” state Schools Superintendent Dr. Joe Morton said. “It gets the money to the systems quicker and at less cost than all 46 systems trying to individually do this. It’s a win, win situation for Alabama.”
The bonds are part of a new federal program created by the economic stimulus law that Congress passed earlier this year.
The Qualified School Construction Bond program provides tax credits to bondholders, as opposed to tax-exempt interest, which allows bonds to be offered with no interest, state officials said.
The Pell City School System also received bond money.
Pell City was allocated $4.7 million for school repairs and construction.
Superintendent Dr. Bobby Hathcock said the School System applied for the bond in late summer.
“We asked for $5.8 million,” he said.
He said the top priority of the School System was to secure the interest-free money for the renovation of Iola Roberts Elementary School.
He said that project would cost the School System about $3.7 million, leaving about $1 million for other smaller projects.
Hathcock said it is up to the board whether or not to proceed in actually securing the bond money for the construction project.
“Right now we’re saying yes, unless things get a whole lot worse,” he said. “I don’t think we’ll see another opportunity to borrow $5 million interest free.
He said Iola Roberts is a good school but it is old.
“I believe it was built in 1953,” Hathcock said. “It’s a good school, but it needs some work.”
Hathcock said he realizes the School System has no reserve because of proration, but he believes the economy will get better.
“I would hate to look back four or five years from now wishing we had taken advantage of this interest free money,” Hathcock said. “An interest free loan is unheard of.”
He said the board would have some time before making a final decision whether to move forward with borrowing the money.
“It’s a heck of a dilemma,” Hathcock said. “How often do you get a chance to borrow money with no interest? On the flip side, you have to pay the money back.”
— David Atchison contributed to this story
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