It's official — the 75-year-old structure of Fair Street International Baccalaureate World School is coming down.
The Gainesville City Schools board voted at its meeting Friday to approve a parameters bond resolution that moves the Fair Street project forward.
"It gets you started with the actual issuance of the bond," Cory Kirby, an attorney with Harben, Hartley & Hawkins LLP told board members.
"It basically sets the ceiling for this transaction."
The general obligation bond, which is similar to a loan, will allow the school board to start its special local option sales tax projects before it begins collections in the fourth quarter of 2012.
Some of the projects that voters approved for SPLOST IV include paying off debt on Gainesville Middle School and purchasing teaching tools.
The Fair Street project, however, needed to begin as soon as possible, and board members did not want to wait until they had the cash to pay for it up front.
The SPLOST money, instead of paying for the projects outright, will pay back the general obligation bonds.
Tread Syfan, an attorney with Stewart, Melvin & Frost LLP told board members the estimated cost of the Fair Street project is $17.9 million.
Syfan told the board the legal team was proposing a bond of $15 million, to be issued by October.
"The parameters resolution is based on $19 million in bonds. That's the maximum amount of bonds voters authorized this board to issue," Kirby said.
"We want to go ahead and validate all of this at one time. ... You can go ahead and issue the $15 million, and down the road, if need be, you can go back and issue the other $4 million."
Bryan Huskey, vice president of Merchant Capital LLC, said the school board will get a higher sales tax percentage for SPLOST IV than in previous years.
He said the school board should see about $22 million in SPLOST collections to repay the bonds.
The next step for the school board and its legal team is timing.
Syfan proposed a schedule to get the general obligation bond.
After the parameters bond resolution is validated, he said an official statement would be prepared.
"It is essentially a disclosure document that discloses to potential buyers of the bond all of the information they need to make an informed investment," Syfan said.
Putting together the official statement could take a couple of months.
Once prepared, Syfan said the bond will be rated by a rating agency to determine how strong the credit is.
The final step will be approving the actual interest rate on the bond, part of a supplemental bond resolution. The bond would close two to three weeks later.
"You could choose to pay for (SPLOST IV projects) out of the general fund," Syfan said.
"We feel like because of the way things are this year, because of the tax digest and the pressure the school district and county has with the digest, it's better not to put more pressure on your general fund. You should not have to borrow internally from the general fund to advance these projects."