In a pivotal meeting, the Sumter County Board of Education delved into the intricacies of bond financing, seeking to unlock new avenues for funding critical educational initiatives. Bill Camp, a financial expert from Raymond James, provided a comprehensive overview, shedding light on the district's financial landscape and the potential opportunities that lie ahead.

Unlocking the Power of Bonds: Sumter County's Strategic Approach

Navigating the Debt Landscape

The Sumter County School Board has been proactive in managing its financial obligations, having borrowed funds in 2018 with the intention of repaying them over two SPLOST (Special Purpose Local Option Sales Tax) periods. As the board members learned, the final principal and interest payment on these bonds is scheduled for October 1, 2027, marking the end of the district's debt obligations.

Tapping into Authorized but Unissued Bonds

During the 2021 referendum, the voters of Sumter County not only renewed the sales tax but also granted the school board the authority to borrow additional funds. According to Bill Camp, the district currently has access to nearly $3.5 million in authorized but unissued bonds, providing a valuable resource for future projects.

Preparing for the Sales Tax Expiration

A critical consideration for the school board is the impending expiration of the current sales tax on June 30, 2027. To ensure the continuity of funding for essential educational initiatives, the board must plan for the renewal of this tax before it lapses. Bill Camp's projections, based on the district's average collections of $5.7 million over the past 12 months, suggest a potential revenue of $28.5 million over the next five years, assuming no growth.

Leveraging Bonds for Timely Capital Projects

The school board recognized the strategic advantages of utilizing bond financing for capital projects. By borrowing funds, the district can undertake essential infrastructure improvements and upgrades earlier than relying solely on the pay-as-you-go approach. This approach is particularly advantageous in the face of rising inflation, as Bill Camp highlighted, noting that "it's a lot cheaper to build something today than it is five years from now."

Maximizing Tax-Exempt Borrowing Opportunities

The school board also learned about the benefits of tax-exempt borrowing. As a governmental entity, the district can access lower interest rates when issuing bonds, as the interest income earned by investors is exempt from federal income tax. This financial advantage can translate into significant savings for the district over the life of the bonds.

Timing the Bond Referendum

The school board discussed the timing of a potential bond referendum, recognizing the importance of aligning the borrowing timeline with the district's specific needs and the availability of the sales tax revenue. By carefully planning the referendum, the board can ensure that the borrowed funds are utilized effectively to address the most pressing educational priorities.As the Sumter County School Board navigates these complex financial considerations, they are poised to make strategic decisions that will shape the future of the district. By leveraging the expertise of financial advisors like Bill Camp and exploring innovative financing options, the board is well-equipped to secure the resources necessary to provide a high-quality education for the students of Sumter County.