$1 billion bond issue money may be available sooner

MONTGOMERY - Schools in northwest Alabama may be able to start their capital projects with money from a $1 billion bond issue sooner after Monday's action by the Public School and College Authority.

Finance Director Jim Main, who is a member of the PSCA, said he had wanted to break up the bond issue and sell it over two years. But because some school systems had major pro-jects and needed a commitment for all their money, Main now wants to sell the bonds late this year.

"The idea of getting all the bonds sold as quickly as possible would put us ahead in the long run," Main said. "Some didn't have money (even) to hire architects."

K-12 schools in the Shoals will get $28.3 million for capital projects including $3.35 million for Florence, $7.6 million for Lauderdale County, and $2.5 million for Colbert County.

Other school systems and their amounts are: Franklin County, $2.8 million; Lawrence County, $4.8 million; Muscle Shoals, $2.4 million; Russellville, $2.2 million; Sheffield, $1.2 million; and Tuscumbia, $1.5 million.

Northwest-Shoals Community College will get $1.9 million and the University of North Alabama will $3.4 million from the bond issue.

The University of Alabama Tuscaloosa campus will get its portion of $79.8 million destined for the UA System's three campuses. Campus distributions haven't been determined. Auburn University will get $35.5 million.

The authority, headed by Gov. Bob Riley, approved hiring bond and authority lawyers, paving the way to sell about $1.07 billion in bonds by the end of the year.

Main said the bond sale depends on recommendations from advisers but because he believes the state will have enough money to meet annual payments he expects the bonds to be sold. Main said it will cost between $81 million and $82 million a year to repay bond buyers.

Proceeds actually will be used to reimburse school systems for their capital expenses. Selling the bonds all at once will give systems the ability to plan entire projects instead of breaking them into smaller pieces.

"There might be a school system out there that had $2 million but needed $5 million," Main said.

The bond issue was approved by the Legislature in the 2007 session. The last school bond issue was $500 million in 1998 to replace portable classrooms.

K-12 schools are to get $690.6 million, two-year schools and universities nearly $257 million, other special projects $68 million, and a fund controlled by legislators and Riley, $55 million. Industrial training will get $20 million.

Interest on the bonds could produce up to $100 million that would go back to the authority that is controlled by Riley. In addition to Riley and Main, school Superintendent Joe Morton is on the authority.

Dana Beyerle can be reached at (334) 264-6605 or dtb123@aol.com.