SBA set to have more money

By Bill Byrd
Times West Virginian

FAIRMONT Sat, May 17 2008

— The state School Building Authority (SBA) should have $20 million more this year to help county school systems build new schools under a bill now on Gov. Joe Manchin’s desk, an SBA official said.
Senate Bill 297 allows the SBA to convert the $19 million in excess lottery revenues that it gets each year into a debt-service fund to pay off new bonds. Gov. Manchin is expected to sign the bill by an April 2 deadline, said a spokeswoman for the governor.
Dr. Mark A. Manchin said the authority is “extremely pleased.”
If the new bonds are sold on Wall Street this spring as planned, the authority will be able to hand out about $70 million in the new fiscal year that starts July 1, said Manchin, the executive director of the SBA.
Counties where voters approve local school construction bonds will continue to have “a very high priority” in getting a share of the state money, Manchin said.
Marion County residents will decide in the May 13 primary whether to pass a nearly $42 million local bond issue for upgrades and renovations at a number of local schools. County school officials also have an estimated $20 million request pending before the SBA to build a new East Fairmont Middle School.
If county voters reject the local bond issue, the county’s request for the SBA funds will also be denied, county and SBA officials have said. A decision on the SBA grant is expected next month.
Manchin said the new bonding authority still leaves
the state playing catch-up in meeting the need for new school buildings, gymnasiums and other facilities.
In recent years, annual requests for SBA aid have generally amounted to five or even six times more than what the authority has available, he said. Currently, the authority is reviewing requests for about $246 million, he said.
The authority has been using $19 million a year from excess lottery revenues and an estimated $27 million annual appropriation from the general revenue budget. The nearly $46 million to $50 million available simply isn’t enough, he said.
Converting the $19 million excess lottery fund into a debt-service fund means the SBA can now borrow more money on Wall Street. The authority is still paying off a mid-1990s bond issue.
The new bill raises the ceiling on the face value of outstanding bonds from $400 million to $500 million at any one time. The new bonds will be issued for a term of 20 years. Manchin said the SBA intends to gradually enter the bond market.
It plans to hit the $100 million ceiling over the next three fiscal years, selling about $20 million bonds in fiscal 2009, $60 million in fiscal 2010 and another $20 million in fiscal 2011. The Public Resource Advisory Group, a private financial advisory firm used by the administration, drafted the plan, Manchin said.
Delegate Timothy Manchin, D-Marion and a member of the House Finance Committee, said Monday the new bond authority should stabilize the annual spending on new school facilities.
“We’ll be able to do a fixed amount of work every year,” he said.
Contractors will benefit because they will have more ability to schedule purchases and rentals of large pieces of equipment, he said.
“That should make the whole process more economical and their bids more competitive,” the delegate said.
E-mail Bill Byrd at bbyrd@timeswv.com.