The Cobb Board of Education voted Thursday to accept a bid from Morgan Stanley to borrow $90 million in short-term loans to begin projects on the Cobb Ed-SPLOST V construction list.
The one-cent sales tax extension collection period began on Jan. 1, but Cobb County School District officials said waiting for the revenues to roll in before beginning work on new schools, renovations and technology upgrades would end up costing more due to increasing interest rates.
The $90 million will be paid back by the end of the year, at an interest rate of 1.72 percent (around $1.54 million), according to Brad Johnson, the district’s chief financial officer.
At a school board work session Thursday afternoon, he said nine financial institutions bid for the loans. Johnson said that for the loans, Moody’s Investors Service gave Cobb schools its highest credit rating, which is unrelated to its overall AAA long-term rating.
Johnson said interest rates have been rising 4-5 percent a year, so being able to start on the first batch of projects at once will enable the district to lock in construction interest rates.
“This is a good deal for us,” he said.
Cobb schools borrowed a similar amount last year for similar purposes, in closing out many SPLOST IV projects.
The district is estimating it will collect around $797 million in sales tax revenues for SPLOST V over the next five years.
Among the primary projects on the SPLOST V list (here’s the full notebook) is rebuilding and relocating Eastvalley Elementary School to the former site of East Cobb Middle School on Holt Road.
Major additions and modifications are planned for Lassiter HS (theater renovation), Sprayberry HS (CTAE building renovation), Walton HS (new tennis courts and softball field) and Wheeler HS (Magnet School renovation).
Dickerson and Dodgen middle schools are slated for major classroom additions.
The first project on the new list was approved by the school board Thursday. The district is merging Harmony Leland and Clay elementary schools in Mableton and building a new school on Factory Shoals Road at a cost of $26.8 million.
SPLOST funds also are used for technology upgrades at every school, including for security measures, and for general maintenance of facilities and equipment.
Get Our Free E-Mail Newsletter!
Every Sunday we round up the week’s top headlines and preview the upcoming week in the East Cobb News Digest. Click here to sign up, and you’re good to go!
