Washington County offers financing options for school

April 26, 2007|by KATE S. ALEXANDER

The Washington County Commissioners eased concern Tuesday when they agreed to find the most cost-effective way to fund the Barbara Ingram School for the Arts.

Debra Murray, the county budget and finance director, offered four financing options to the board that explored alternative bonding and lower interest rates for funding the project.

The board approved a partnership with the Maryland Economic Development Corp. (MEDCO) to fund the school in March, in part financing the $9 million project with bonds that the school system would pay back with an interest rate of about 5.5 percent.

In her presentation to the commissioners, Murray said the county has the option of bonding the project at interest rates between 4.25 percent and 4.6 percent, using either a self-supporting bond or the nonprofit partnership proposed by the Washington County Board of Education.

Deciphering the economic jargon, Commissioner James F. Kercheval explained that a "self-supporting" bond differs from a typical bond issued by the county because its debt service would not be paid out of the county general fund, but would be paid with state money.

The MEDCO partnership proposed by the Board of Education would require the City of Hagerstown, which owns the building on South Potomac Street, to lease the facility to a local nonprofit corporation that would serve as the facility owner/lessor, officials have said.

The partnership will allow the project to be eligible for a number of tax credits and grants that would lower the overall cost of the project by about $2 million.

The board asked Murray to continue exploring the many financing options with Chris South, the school board's financial director.

"This was just a preliminary look at other options Debbie wanted us to be aware of as we discussed the school," Kercheval said.

While the board did not make a decision Tuesday, Superintendent Elizabeth Morgan said the consensus to pursue funding moves the project forward.

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