The Hopkins County School Board has authorized the advertising of a 'bond anticipation note' in the tune of $6.7 million to fund construction of the new Career and Technology Center. The board approved the use of BANs Monday at a regularly scheduled meeting.
This is the second run at constructing a new career and tech center. The district halted work on the first project two years ago after the partially constructed building on Grapevine Road began to sink into the loose soil above a reclaimed coal mine.
Hopkins County Schools Superintendent Linda Zellich says the school’s bonding firm and financial advisors recommended using BANs bonds because they would allow the school to finance construction on the new site while still recovering damages from the previous build.
“Bonds were sold, so you have to pay off those bonds," said Zellich. "You have to get bonding again to construct a new one. So we had to close out one BG ,which is a construction form required by the Kentucky Department of Education, and initiate another BG, and these bonds anticipation notes. So we're actually using those in between until we know what the final amounts there will be because it’s in litigation.
"It's just a bridge method of funding, like a mortgage on a house," said Zellich. "Which used to be used a long time ago in the 80s when interest rates were 18 percent and schools started to construct a building. They would use a bond anticipation note so that they wouldn't get locked into high rates for 30 years."
The school is looking to recover damages from the insurance company and the engineering firm that conducted the previous site evaluation.
"There was some severe settling in one part of the building," said Zellich. "Some experts say the problem could be fixed with the use of micropiles, but it was the decision of the board of education that people would always have concerns with that property after that happened."
Zellich says she could not make public comment on the litigation's status until the matter is resolved.
The school board plans to break ground on the new site on Patriot Drive on June 1st and is looking at tentative 16-month timeframe for completion.