Beatrice School Board acts on land transfer, for new elementary school project
BEATRICE – The Beatrice School Board has taken two actions that cover sale and lease of property for a new elementary school planned in east Beatrice.
Through an agreement with the Southeast Nebraska Education Agency….a partnership of District 15 and ESU Number 5…the actions involve about 29 acres of the 92-acre plot the school district has owned north of Beatrice High School.
Michael Rogers, a bond attorney with Gilmore Bell says the district sells the land to the agency and provides the funds to do so. "The reason that the land needs to be in the name of SNEA is because they will be mortgaging it to Pinnacle Bank as the lender for the project." The school board appropriated the funds for the sale and approved a lease for the new school facility. The SENA board has purchase of the land on its Thursday agenda along with financing documents with Pinnacle Bank.
"After the SNEA is done constructing the building, they will then lease it to the school district and that's what you're approving tonight...that lease agreement. The SNEA, the funds that they use to repay their financing with Pinnacle Bank are lease revenues. So it's a lease revenue financing on their side...Pinnacle Bank has as collateral the real estate and the building."
Rather than go the route of a traditional school bond issue, the Beatrice School District is planning to use the district’s building fund levy to make payments for the school, without raising additional taxes. The district would make an estimated payment twice annually, of nearly $850,000 over the financing period. Superintendent Jason Alexander says the district’s building fund levy is expected to generate between $1.3 million and $1.9 million annually in the coming years.
The leases with the school district each cover a seven-year-period. Construction of the school is expected to take about two years. Rogers says the final financing amount is pegged at about $35 million.
"It's possible that could be less. It's a drawdown loan, which is beneficial to the agency, because they will only end up borrowing exactly what they need. If its less than $35 million, then that's all they will borrow. At the end of a two-year period, they'll lock in the final amount that they'll need and amortize it at that point. So, if its fully drawn, the expectation is that the lease payments that the district will make, will be less than $850,000 every six months."
Within the financing, Rogers says there is no prepayment penalty should the Southeast Nebraska Education Agency be able to pay off the project early.
Board member Doris Martin said she’s excited about being able to accomplish building a new prekindergarten through fifth grade facility, which will replace four separate elementary buildings across the community. Board member Eric Book called it a huge step for the school district. "I'm so very excited for our kids to have a state-of-the-art, safe facility...and it's a long time coming. I'm so excited for our school community, too. I know there's a lot of people out there that are questioning the new school, or are not in favor of it and how we're going about it...and I understand that concern out there. But, I do have confidence that when this is said and done, we are going to change some people's minds....and they'll see that this option that the board has, was the best option that we could go down, given our situation. And, our kids sorely deserve better."
Two past bond issues for a new elementary school failed by large margins, during public votes.
Compaction work at the site will be starting in the coming weeks, with a groundbreaking planned. The goal is to have the new school operational in the fall of 2024.