The Bulloch County School District sold bonds with a face value of $50.32 million Thursday morning, thus borrowing that amount at an effective 2.16% annual interest rate to be repaid in installments over three years. This will partially finance a new, 2,000-student Southeast Bulloch High School projected to cost as much as $165 million.
Construction is slated to begin this summer.
At the Board of Education’s meeting Thursday evening, the members, by a single motion and unanimous 8-0 vote, approved four legal documents related to the bond sale. Also, by a separate 8-0 vote at the end of the meeting, they OK’d an intergovernmental agreement with the city of Brooklet to connect the new school and the two existing Southeast Bulloch schools to Brooklet’s water system and new sewer system, with the school district expected to foot the bill for a water tower and sewer lift station.
Todd Barnes, from Raymond James Financial, which is the underwriting firm for the bonds, reported on that morning’s sale. Then bond attorney Jon Pannell from the Gray Pannell firm presented and explained the documents for the board to approve.
“Timing really could not have been better for selling the bonds,” Barnes said. “We have seen, really over the last 12 months, interest rates in the municipal bond market, particularly on the shorter end of the maturity schedule, the yield curve, come down significantly, almost three-quarters of a percentage point.”
Strong demand in a market with few similar-quality bonds available resulted in over $200 million in orders for the Bulloch County Schools’ $50 million in bonds, he said. As a result of this demand and the district’s excellent credit rating, the overall yield on the bonds, which represents the real interest cost to the school district, amounted to 2.16%, Barnes reported.
The coupon or face, value of the bonds, stated in the bond resolution, is 5%. The projected total interest cost was $4,324,256. However, the bonds also sold at a premium, offsetting some of the interest cost. Barnes said that a little over $52 million will initially go into the project account.
“Congratulations, I wish I could borrow money for 2.15 percent,” Pannell remarked.
4 bond documents
The four documents he brought for the board’s approval were the bond resolution, the bond sale agreement, the Board of Education’s “tax recommending resolution” to the county Board of Commissioners and something called the “state intercept document.”
The bond resolution, a more than 35-page document, describes the bonds, the sources for repayment and other details, referencing other documents.
Although the primary source for the bonds is the county’s 1% Education Purpose Local Option Sales Tax, the bond resolution makes clear that the E-SPLOST in question is the one currently being collected, which was authorized by voters in a referendum on Nov. 8, 2022 and runs until Sept. 30, 2028. In fact, the full wording of the referendum proposal, which included authorization for “general obligation debt” of up to $80 million, is included in the resolution.
“So far you’ve been accumulating your sales tax monies each year to go toward the projects,” Barnes said to the board. “From here to the end, most of that will now go toward retiring these bonds, but it won’t take all of that every year to do that.”
Not E-SPLOST 6 yet
This means that the board is not committing money to repayment of these particular bonds from the five-year extension of the educational sales tax, nicknamed E-SPLOST 6, that was approved by voters in the Nov. 4, 2025 referendum. That run of the tax will be collected from Oct. 1, 2028 until Sept. 30, 2033.
However, a portion of the revenue from that further, already approved installment of the sales tax is expected to be needed yet to help fully pay for the new Southeast Bulloch High.
“At that point, or as close as we can get to that, is when this board would want to issue bonds again,” Wilson, whose retirement as superintendent is set to take effect March 31, advised the elected board members. “This has to do with E-SPLOST 5. You will revisit that again in a few years in relation to E-SPLOST 6, because both of those sources will be needed to complete this project.”
Two guarantees
The state intercept document authorizes Georgia’s State Board of Education to withhold any state funding due to the Bulloch County School District and use it to cover any deficiency in bond repayment.
“What it does is, in the event there’s insufficient funds to make a bond payment, the state will actually step in and make that payment for you,” Pannell said. “That’s not going to happen, because y’all have got money from the E-SPLOST to make the payment, but again it’s additional security for the bond holders.”
That reassurance in effect boosted the school district’s bond rating from Moody’s Aa3 to Aa1, which is just one level below the top Aaa rating, helping to secure the low interest rate, he said.
Meanwhile, the “tax recommending resolution” recommends that the county Board of Commissioners, which has direct taxing authority, levy a property tax millage if ever necessary to cover any possible shortfall in the sales tax revenue toward repaying the bonds. Similarly, the commissioners adopt the Board of Education’s recommended millage rate for school operations each year as part of the combined county millage rate.
District 3 board member Jennifer Mock made the motion to approve the bond documents, and District 8’s Maurice Hill seconded it before the unanimous vote. Later, during a break between the main open session and closed session, Wilson and BOE Chair Elizabeth Williams signed the documents.
The money isn’t in hand yet, but it will be delivered into the school district’s project fund after the formal “closing” of the bond transaction with the Raymond James firm, scheduled for Feb. 24.
Brooklet water & sewer
Wilson had mentioned one other matter related to the construction of the new Southeast Bulloch High School during the “superintendent’s report” early in the meeting. But this subject, an intergovernmental agreement with the city of Brooklet for water and sewer service – including from Brooklet’s new sewer system, currently under construction – to the planned new school and the two existing Southeast Bulloch schools wasn’t taken up until the very end of the meeting.
That followed a closed-door “executive” session, which the board voted to enter to discuss personnel actions and pending or potential litigation.
Back in open session, the board first unanimously approved Wilson’s recommendations for employee contract renewals and other personnel actions, including the hiring of some principals. Then the board heard his recommendation to approve the intergovernmental agreement with the city of Brooklet. Although the agreement had been discussed at some previous work sessions, no public discussion of it took place at Thursday’s meeting. On a motion by Mock, seconded by District 1 board member Lannie Lanier, the board voted to approve the agreement just before adjourning the meeting.
The Statesboro Herald requested and obtained a copy of the agreement Friday.
It will commit the school district and the city to a cost-sharing plan for extension of Brooklet’s water and sewer systems to serve the schools. Under the terms of the agreement, the school district will be responsible for the design and installation of a sewer lift station at an estimated cost of $500,000, plus the installation of a 300,000-gallon water tank on school district property at an estimated cost of $2.2 million.
Brooklet City Council has yet to vote on this final version of the contract, Marc Bruce, lead attorney for the Board of Education, said Friday.
(Brooklet City Attorney Ben Perkins) “has indicated to us that the text that we passed last night would be acceptable to the mayor and City Council as well, but we won’t know that conclusively until they actually vote on it,” Bruce said.
The school system stands to become, initially at least, Brooklet’s largest water and sewer customer by far, with an estimated water usage of 100,000 gallons per day mentioned in the agreement.