A majority of Alamance County’s commissioners have agreed to transfer the remnants of a six-year-old bond package to bankroll various roofing and HVAC upgrades that are meant to forestall the repeat of a massive mold infestation which shut down the local school system for several weeks in 2023.
During a regularly-scheduled meeting last Monday, the county’s board of commissioners voted 4-to-1 to shift $19,515,388.83 in revenue from a bond sale in June into a special capital projects fund that the county maintains for the Alamance-Burlington school system.
The transfer of these funds will allow the school system to use the money for roofing and HVAC projects at 11 schools – with nearly two thirds of the funds earmarked for work at Eastern and Western high schools. Also slated to receive some of this revenue are Southern High School; Western and Southern middle schools; and Haw River, B. Everett Jordan, South Mebane, Alexander Wilson, Hillcrest, and Smith elementary schools.
Meanwhile, the commissioners agreed to reallocate another $305,533.67 in leftover funds from several bond-subsidized construction projects to pay for additional improvements at Smith.
The bonds which generated these funds were effectively the rump end of a $150 million bond package that area voters approved on behalf of the school system in 2018. The commissioners had already squeezed $150 million from this package prior to the final bond issue in June. Even so, a combination of low interest rates and demand from investors had enabled the county to raise a substantial portion of these funds from so-called bond “premium” – a bit of financial jargon that refers to debt which the bond market offers beyond the principal of a bond package on terms that are particularly attractive to borrowers.
Between the principal and the premium, the county could have borrowed something in excess of $170 million when it issued the $150 million bond package. Yet, in deference to the will of the voters, the commissioners had initially pledged to cap the money they raised from the bond package at $150 million. The county, however, had rustled up this revenue through a combination of premium and principal that had secured it the most favorable terms. As a result, the commissioners still had roughly $19.5 million in unissued principal even after they reached their self-imposed limit of $150 million.
The commissioners had originally planned to let the bond package’s leftover principal remain unredeemed until it expired. The school system’s mold crisis nevertheless convinced them to revisit their plans, and in May of this year, they unanimously authorized the county’s administrators to cash out the remaining principal.
Following this unanimous vote, commissioner Pam Thompson insisted that she hadn’t realized the board’s decision had allowed the county to raise more than $150 million in revenue. She was ultimately able to act on her belated misgivings when the county’s administrators returned to commissioners in late May for permission to “accept” over $1 million in premium on top of the remaining $19.5 million in principal.
John Paisley, Jr., the chairman of Alamance County’s commissioners, opposed this request on the grounds that the school system wasn’t doing anything with the funds it had already received from the county. In the absence of commissioner Bill Lashley, who was in the hospital at the time, Thompson found herself in the position to scuttle the administration’s request – which she did with reference to the $150 million threshold.
Thompson invoked the $150 million ceiling once again when it came time for the commissioners to allocate the proceeds from the final bond issue at their meeting last Monday.
Paisley informed the rest of the county’s governing board that this budget amendment had originally appeared on a consent agenda of putatively routine or noncontroversial items, which the commissioners had signed off on en bloc at the start of that evening’s proceedings. The board’s chairman added that he had decided to pull the item off the consent agenda so the commissioners could discuss it in detail.
It was nevertheless Thompson who cast the lone vote of opposition against the proposed allocation.
“I cannot support that,” she said before she enunciated her vote, “because I swore I would not [vote to] pay back more than the $150 [million].”