Lynchburg awarded up to $18 million in bonds for Sandusky Middle construction

Lynchburg has been awarded up to $18 million in zero-interest bonds for the construction of the new Sandusky Middle School.

City officials expect they will only be able to draw down $10.5 million of that due to eligibility restrictions attached to the bonds. The money, announced Thursday, comes from the federal stimulus bill.

The state as a whole has $191 million in stimulus-backed bonds to fund school construction projects. The bonds are being allocated directly by Gov. Timothy M. Kaine. Lynchburg’s award will save the city millions in future interest payments.

“Zero-percent interest is always good news,” City Manager Kimball Payne said.

Payne said the city learned about a month ago that it was in the running for this money and has been working since to understand what it means for the Sandusky budget and the city’s finances.

Officials do not think they can use the full amount awarded by the governor because the bonds can only be used for future construction costs. The new middle school, a project that broke ground last year, only has about $10.5 million in expenses left, Payne said.

Getting these bonds will shore up a big chunk of the Sandusky budget that has been in limbo since the state eliminated funding for its own school construction program due to the budget crisis.

In a news release, the governor said he used the waiting list from that program to determine how to distribute the stimulus money. Lynchburg was on the list after applying for a $7.5 million low-interest loan for Sandusky. The stimulus bonds will now be used to supplant that.

The new stimulus money may also enable the city to redistribute part of the proceeds from the local bond sale just completed in July. Officials are studying that possibility now and hope to be ready to brief City Council later this month.

The new Sandusky Middle School has a total budget of $28 million. It’s slated to open in 2010. It will be the city’s first new school in almost 30 years. It also is expected carry the distinction of being LEED-certified by the U.S. Green Building Council for its energy-conscious design and construction.