Sales tax

Alexander City Schools superintendent Dr. Keith Lankford tells the Tallapoosa County Commission about plans to use proceeds from the 1-cent sales tax the commission will consider in August.

Alexander City Schools superintendent Dr. Keith Lankford will ask for the formation of a committee to ensure stakeholders have the correct information on how the funds from a 1-cent sales tax are used, starting with planning construction.

“I have requested that a small capital projects committee be selected to ensure all constitutes are receiving the same information as we move through this process,” Lankford said in an email. “The committee will be made up of two Alexander City Schools board members, two (Alexander City) councilmembers and one (Tallapoosa) County Commission member.”

The sales tax will be used to help fund $56 million in projects in Alexander City Schools the Alexander City Board of Education had already signed off on before the commission approved the sales tax in August. 

Funding

Lankford explained how he anticipates the process of selling bonds, accounting for funds and selecting vendors would occur as he and city school board staff make plans to approach the bond market.

“The Alexander City Schools Board of Education will pledge the proposed 30-year 1-cent sales tax to secure warrants (bonds) for the needed capital projects,” Lankford said. “Current bond rates are at near historic lows and offer the board the chance to lock in a low rate for a longer period of time compared to a conventional loan. A 30-year rate can be locked in and take away any interest rate risk the board would have in having to refinance a conventional loan in a few years. We are also able to refinance if the warrant/bond rates decrease from this point forward.”

Lankford said the board is working to ensure it receives the best interest rate and costs for obtaining the bonds.

“We are working with our financial service company (underwriter) to evaluate rates on both public, private and blended warrants as well as continuing to watch the fluctuation in the market,” Lankford said. “(The underwriters) are working to secure credit rating and payment options that best meet the district’s needs based on our scope of projects and revenue sources.”

Lankford said closing fees, attorney fees and origination fees run about 1% of the amount of the warrant or bond. Lankford said he and chief school financial officer Rhonda Blythe have met with four underwriting companies — FCStone, The Frazier Lanier Company, Joe Jolly & Company and Piper Jaffray Financial Investment — and “each presented similar services and fees.”

Lankford said Alexander City Schools has recent dealings with FCStone.

“with positive references from superintendents I was familiar with, we signed a non-binding G-17 agreement with (FCStone) to represent Alexander City Schools in the initial phase of the warrant process,” Lankford said. “Prior to actually going to market, I will recommend their services to the board for final approval.”

In addition to the committee, Lankford said other measures will be put in place to for funds to be tracked.

“All financials associated with schools are public record and a financial report is presented publicly at each monthly board meeting and posted on the district’s website,” Lankford said. “A status report will be provided each month detailing the capital projects in connection with timelines and budget. A special-use code or separate account will be used with our capital projects to ensure transparency and efficiency with knowing where we are at all times regarding budgets and timelines.”

Lankford said funds from the bonds would earn money while waiting to pay for projects.

“I anticipate the capital projects possibly taking three to four years to complete which would leave excess funds available for investment over that period of time,” Lankford said. “Any monies appropriated from warrant/bond investments will go directly to capital projects. The county commission has stipulated that the sales tax will be used for capital projects or debt services related to such. Therefore, monies generated from the tax will also be used for the same.” 

Lankford said he is requesting information about such investments and the board of education will make the decision about how the funds will be handled.

Projects

Lankford said in previous report there are four main projects the tax will fund. 

First is a new high school near the Charles E. Bailey Sportplex projected to cost between $38 and $40 million.The school board will start planning and programming it in the fall, have groundbreaking in June 2020 and complete it by 2021.

The second priority is to repurpose portions of the current Benjamin Russell facility and update roofing, lighting, plumbing, mechanical and civil engineering to address drainage and security access at the vestibule. The renovations will possibly include removing portions of the existing structure.

The start date is around January 2022 and the anticipated completion date is January 2023.

The third priority is renovating Alexander City Middle School. Additions and renovations include extending the entrance, converting exterior pathways to hallways, using civil engineering for drainage, building an elevator for Americans with Disabilities Act (ADA) accessibility in a semi-detached building and upgrading roofing and security. The cost for the project is $6 million.

The expected start date for programming and planning the project is May 2021. Construction will start in January 2022 and completion is set for 2023.

Jim Pearson Elementary School will be renovated to add more classrooms and address security concerns which is expected to cost $3.5 million. It is being funded from monies on hand.

Renovations include an entrance connecting the existing buildings, a science, technology, engineering and math (STEM) classroom, a new media center, ADA accessibility to the lunchroom and gymnasium and approximately six additional classrooms. The school system started planning the project in June, groundbreaking is expected in April 2020 and the expected completion date is May 2021. 

Construction

The construction process is still in the planning stages for Alexander City Schools. Lankford said the staff and board are evaluating if a member of the staff will be the city BOE’s representative or if it will be hired out. To help with decision making process Lankford said he has met with four firms about possibly managing parts of the projects.

Hoar Program Management is a Birmingham-based firm which has built schools across the Southeast including schools in Jefferson and Mobile counties. Ra-Lin is a Carrollton, Georgia firm which has built Clay Central and schools in west Georgia. TCU Consulting Services is a Montgomery-based firm which built the new Auburn High School. Volkert is a Mobile-based firm. It has completed many infrastructure projects across the Southeast and has helped with projects with Birmingham City Schools.

“I explained to each the proposed scope of the projects and requested each group present to the board during an open public work session on Sept. 5,” Lankford said. “I gave a list of questions each much must answer in their presentation and each board member asked additional questions after the 20-minute presentation. I am currently developing a rubric that looks at services provided, reputation and references, cost and experience with related projects. I have and will continue to visit projects currently underway with each group and discuss these projects with superintendents associated with them.

“The primary focus of hiring a program management group is to ensure professional services provided assist the board of education with timelines and budget throughout the process and making sure the initial program of the project fits the program designed for the number of students, cost and requirements under building codes without excessive change orders or over engineering of mechanical, electrical, structural and the like.”

Lankford said the board will consult the Alabama State Building Commission.

“It is a requirement that the Alabama Building Commission be involved and all plans, alterations and inspections garner their approval,” Lankford said.

Lankford said large construction projects can present issues for staff and that is why the Alexander City Board of Education is heavily exploring employing the services of a construction management firm. But the board will define the firm’s role, expectations and have known costs for the services.

“Managing a large scale project such as the high school is difficult,” Lankford said. “Assigning a project manager within the system would not allow him or her the ample time to complete assigned duties under their current job description because of the extensive time required on the building site. Alexander City Schools does not currently employ personnel with a contractor’s or builder’s license that would be qualified to oversee the project in the detail a program/construction management firm can provide.

“It may be suggested and encouraged by me that if we elect to go forward with such a company, we would like a customized fee schedule to assist us in areas I feel are needed, such as the initial programming of the project and solicitation of bids to increase local participation. We are not prepared to pay a standard percentage fee based on the amount of the project.”

 

Cliff Williams is a staff writer for Tallapoosa Publishers.