027-00
BOARD OF SUPERVISORS
RESOLUTION OF THE BOARD OF SUPERVISORS OF THE COUNTY OF
FREDERICK, VIRGINIA AUTHORIZING AN APPLICATION
TO THE VIRGINIA PUBLIC SCHOOL AUTHORITY
WHEREAS, the Frederick County School Board ("School Board") and the Board of
Supervisors ("Board of Supervisors") of the County of Frederick, Virginia ("County") have
detenruned that it is advisable to contract a debt and issue general obligation bonds of the County in
an amount not to exceed $1,065,000 to tinance certain capital projects for public school purposes and
to sell the Bonds to the Virginia Public School Authority ("VPSA");
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF SUPERVISORS OF
THE COUNTY OF FREDERICK, VIRGINIA:
1. The County Administrator is authorized and directed to execute and deliver an application
to the VPSA in order to sell the Bonds to the VPSA at the Spring 2000 VPSA bond sale.
2. The Board of Supervisors adopts this declaration of official intent under Treasury
Regulations Section 1.150-2. The Board of Supervisors reasonably expects to reimburse advances
made or to be made by the County or the School Board to pay the costs of acquiring, constructing and
equipping the capital projects for school purposes from the proceeds of its debt or other financings.
The maximum amount of debt or other financing expected to be issued for such improvements is
$1,065,000.
3. This resolution shall take effect immediately.
Adopted by the Board of Supervisors of the County of Frederick, Virginia, at their regular
meeting held on February 8, 2000 by the following recorded vote:
Richard C. Shickle
Robert M. Sager
Charles W. Orndoff, Sr.
Margaret B. Douglas
W. Harrington Smith, Jr.
Sidney A. Reyes
John R. Riley, Jr.
Clerk, Board of Supervisors
County of Frederick, Virginia
RESOLUTION NO.: 027-00
RESOLUTION - NOT APPROVED
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Frederick County Public Schools
Superintendent of Schools
Visit us at www.frederick.k12.va.us
e-mail:
deanw@frederick.k12.va.us
To:
Frederick County Board of Supervisors ~
Dr. William C. Dean, superinte~choolS
VPSA Funding Requirements, Back Creek Elementary School
From:
Subject:
Date:
February 3, 2000
Included for your review is background information regarding the financing of the Back Creek
Elementary School project. Typically, most major school construction projects are financed from
funds borrowed through the Virginia Public School Authority (VPSA). Rather than borrow the
entire amount needed for a project at one time, it has been our practice to make application to
VPSA as funds are required in order to avoid unnecessary interest payments.
The first VPSA borrowing occurred in the spring of 1999, in the amount of $3.9 million for the
Back Creek project and $750,00 for the purchase of an elementary school site in southern/eastern
Frederick County, for a total application of $4.65 million. A second application to VPSA in the
amount of $4.1 million was approved in the fall of 1999. The process of borrowing funds from
VPSA requires the approval of resolutions by the school board and board of supervisors. The
school board considered a resolution for the funding necessary to complete the Back Creek project
at its February I, 2000, school board meeting and a similar resolution is part of the agenda for
your February 8th meeting in order to meet the timeline required by the VPSA application process.
The original budget estimate for the Back Creek project was $9.8 million. As noted, VPSA
applications in the fall and spring of 1999, resulted in the borrowing of a total of $8,750,000. Of
that amount, $8 million was identified for the construction of the Back Creek elementary school
and the remainder, $750,000, for the purchase of an elementary school site in eastern/southern
Frederick County.
A review of the current status of the Back Creek project indicates we will be able to complete the
project for $9.3 million rather than the original estimate of $9.8 million. The amount already
obligated or paid includes the purchase of land, architectural/engineering fees, and the cost of
construction, and totals $8,460,880. Based on past elementary school projects, we have estimated
an additional $740,000 will be needed to purchase furniture and equipment for the school, which
540-662-3888
1415 Amherst Street, Post Office Box 3508, Winchester, V A 22604-2546
FAX 540-722-2788
Frederick County School Board February 3. 2000
Memorandum Re: VPSA Funding Requirements, Back Creek Elementary School
Page 2
brings the total amount needed to $9.3 million and will necessitate the borrowing of an additional
$1.3 million. However, due to the fact that bond funds earn interest from the time we receive the
funds until they are expended, we have realized an additional $135,000 from the Spring, 1999, and
Fall, 1999, VPSA bond sales. In addition, as noted in the FY 1999 year-end financial statement,
approximately $101,000 remains from the construction of additions to Armel and Middletown
Elementary Schools, which will be applied to the Back Creek project. These amounts, which total
approximately $236,000, will reduce the funds needed to complete the Back Creek project to
$1,065,000 (we are required to borrow funds in $5,000 increments).
In considering the VPSA bond resolution, you have several options which you may which to
explore to provide the funding needed to complete the school. The first option is to approve a
resolution in the of $1,065,000. This option preserves the $750,000 amount for the purchase of
land for an elementary site in southern/eastern Frederick County. A second option would involve
using the funds identified for the purchase of a southern/eastern elementary school site for the
Back Creek school project, thereby reducing the amount which needs to be borrowed to complete
the project to $314,000. Although we indicated in the 1999 VPSA application we intended to use
the $750,000 for the purchase of an elementary school site, once borrowed, the funds can be used
for any school project if the appropriate language is included in the bond resolutions. Your
selection of the second option will require us to return to you to discuss funding options at some
point in the future when a suitable site for an elementary school has been identified.. A third
option which you may wish to consider involves providing the money needed to complete the
project from the county fund balance and not utilizing VPSA funding. One concern that has been
expressed in the past with regard to the purchase of furniture and equipment for schools involves
using funds for items with a relatively short life span which must be paid back over a twenty-year
period. Examples of these items include computers and a wide variety of materials and equipment
such as maps and globes, art, music, and physical education equipment, etc. which have a limited
useful life span. Certainly, it is not the school board's, nor is it my place, to suggest how you
should use your fund balance; however, I feel it important that I provide you this information
regarding funding options as you consider the best way to complete the Back Creek District
elementary school project.
Should you approve a VPSA resolution in an amount less than that approved by the school board,
we will present a revised resolution at the February 22, 2000, meeting of the school board so that
both resolutions included in the VPSA application are identical. It is possible you may wish to
take some time to consider which option to select regarding funding the remainder of the Back
Creek project. In this event, I recommend you approve the identical amount which was
approved by the school board at its February 1, 2000, meeting (i.e., $1,065,000) so that the
completed application can be forwarded to the Virginia Department of the Treasury in order to
meet the February 17, 2000, deadline. If desired, localities may reduce the amount they wish to
borrow prior to the time of the sale, which usually occurs in April.
A brief summary of the status of the funding for the Back Creek project and various options which
have been referred to in the above text is attached.
Attachment: Summary of Back Creek Elementary School Funding/Options
Summary of Back Creek Elementary School Funding/Options
Page 1
I. VPSA Borrowing To Date
Spring 1999 Issue ..........................................................................................$4,650,000
$3.9 million for Back Creek Elementary School
$ 750,000 for Purchase of Elementary School Site in Southern/Eastern Frederick County
Fall 1999 Issue...............................................................................................$4, 1 00,000
$4.1 million for Back Creek Elementary School
Total Borrowing to Date for Back Creek Elementary School.......................$8,000,000
($3.9 million + $4.1 million)
Grand Total ofVPSA Borrowing to Date .....................................................$8,750,000
II. Original Budget, Back Creek Elementary School.........................................$9,800,000
III. Costs Incurred To Date, Back Creek Elementary School
Land............................................ ................................................................... $ 455,000
Archi tectural/Engineering Fees..................................................................... $ 330,000
Construction................................................................................................... $7 675 880
Total..................................................... ....... ................................................... $8 ,460,880
IV. Equipment Needed to Furnish Back Creek Elementary School....................$ 740,000
(Includes miscellaneous furniture; computers; library collection;
library furniture; audio-visual equipment; telephone system;
playground equipment; foodservice. art, music, and
physical education supplies; maps and globes; etc.)
V. Interest Earned on Spring 1999 and Fall 1999 Borrowing ............................$ 135,000
Remaining Funds From Construction of Armel/Middletown Additions.......$ 101.000
(To Be Applied to Back Creek Per Year End Financial Statement)
Total..................... ............ .............................................................................. $ 236,000
Summary of Back Creek Elementary School Funding/Options
Page 2
VI. Funds Nceded for VPSA Spring 2000 Issue to Completc Back Creek Elcmentary School
a. If Preserving $750,000 For Land Purchase From Spring 1999 VPSA Issue
Costs Incurred to Date for Back Creck Elementary School.............. $8,460,880
Equipment Needed to Furnish Back Creek Elementary School........ $ 740000
Total........... ......... ...... ...... .......... .... ................................. ... ...... .... ....... $9,200,880
Plus Contingency Allowance............................................................. $ 100.000
Grand Total of Amount Needed for Back Creek With Contingency $9,300,000
Less Total Amount Borrowed to Date for Back Creek .....................($8.000000)
Total Amount Left Needed to Complete Back Creek Project ........... $1,300,000
Less Interest Earned and Remaining Funds from Additions .............($ 236000)
Funds Needed to Complete Back Creek Preserving $750,000.......... $1,064,000
b. If Utilizing Funds Identified for the Purchase of the Southern/Eastern Elementary
School Site for the Back Creek Elementary School Project
Total Amount Needed for Back Creek With Contingency................ $9,300,000
Less Total Amount Borrowed to Date for Back Creek ..................... $8 000000
Total Amount Left Needed to Complete Back Creek Project........... $1,300,000
Less Amount Borrowed to Date for Southern/Eastern Elem. Site ....($ 750,000)
Less Interest Earned and Remaining Funds from Additions ............. ($ 236 000)
Total Funds Needed to Complete Back Creek Utilizing $750,000... $ 314,000
c. If Utilizing Funds Identified for the Purchase of the Southern/Eastern Elementary
School Site for the Back Creek Elementary School Project and County Funds to
Complete Project
Total Amount Needed for Back Creek with Contingency................. $9,300,000
Less Total Amount Borrowed Spring, 1999 and Fall, 1999..............($8,750,000)
Less Interest Earned and Remaining Funds from Additions .............{$ 23600())
Total Funds Needed to Complete Project from BOS ....................... $ 314,000