WASHINGTON — In an attempt to save schools money while promoting green technology, Virginia Gov. Timothy Kaine announced yesterday that the state’s remaining $119 million qualified school construction bond allocation will be used to finance energy-efficiency projects rather than new construction.
“Today’s announcement will advance two of the commonwealth’s top priorities — education and energy efficiency,” Kaine said in a statement. “When school divisions lower their energy consumption, they can lower their energy costs and direct more resources to the classroom, all while reducing their environmental impact. The projects made possible by these [American Recovery and Reinvestment Act] bonds will create jobs, improve our children’s learning environment, and promote green technology and construction here in the commonwealth.”
School divisions and local governments can submit project applications through Nov. 11, state officials said. Project proposals will be evaluated by three state departments: Mines, Minerals and Energy; Education; and Treasury. A team of officials will score the projects based on their energy savings, said Arthur E. Anderson, a partner at McGuireWoods LLP who is bond counsel for the state. Project announcements are expected to be made by mid-December.
The QSCBs could be issued as early as January in one or more transactions, according to Evelyn Whitley, Virginia’ s director of debt management. If the state does more than one transaction, some schools might benefit by waiting for a later transaction, she said. Market demand might influence the size of the deals, she added.
Not all of Virginia’s school districts may rush to apply for the QSCBs. The Fairfax County Public Schools system, the largest in the state and 12th largest in the country, would only be interested in the QSCBs if they lower borrowing costs, said Paul Regnier, a spokesperson for the district. Fairfax already has energy-efficiency projects included in its bond-funded capital improvement program and is currently researching QSCBs as an option, he said.
The $119 million allocation of QSCBs comes after Kaine announced in September that the U.S. Treasury Department had initially allocated of $71.6 million of QSCBs to the state, which will be used for eight projects in seven localities, including school construction, renovation, and land acquisition. The QSCBs for those projects are expected to be issued this month in a negotiated deal with Goldman, Sachs & Co. as underwriter, Anderson said.
Eligible projects include improved heating, cooling and ventilation systems; insulation, and solar photovoltaic cells for hot water, among other options, the governor said. Virginia received $191.1 million of the $6.6 billion of QSCBs allocated to states in 2009 in the stimulus law. The state expects to receive the same amount in 2010.
Whitley said Goldman has talked with Guggenheim Partners LLC as a potential buyer for the state’s first QSCBs. Guggenheim, a privately held financial services firm, has been the largest buy of QSCBs with $272 million of QSCB purchases though Sept. 21.