Steps are being taken in Buena Vista to lay the groundwork for financing a $17 million construction project that will put Parry McCluer Middle School and the high school under one roof.
City Council adopted a “reimbursement resolution” this past Thursday that will allow the city to reimburse itself for expenditures related to the planning, financing and other preliminary work associated with the school construction project. The reimbursement would be for costs going back 60 days and moving forward to when financing is secured.
The resolution, interim City Manager Wayne Handley explained, “allows the city, if it chooses to do so, to wrap some of what we call ‘soft’ costs into the entire project. … And what that’s going to require is [finding] options for us to finance this going forward.”
The School Board on May 28 adopted a similar resolution after hearing a presentation on a proposed agreement with Richmond-based financial advisory firm Davenport & Company. Superintendent Dr. Heather Ault presented the School Board with information about the proposed agreement with Davenport, which would serve as financial adviser for the project. The presentation was informational only; the Board was not asked to take action on the Davenport agreement.
Under the proposed arrangement, Davenport would conduct a comprehensive financial review of the city before any financing is executed. That review would assess existing financial conditions, debt capacity, revenue trends and policy considerations to ensure any recommended financing structure aligns with the city’s long-term fiscal health. The firm would also analyze the fiscal impact of issuing debt to fund the high school project, modeling projected debt service requirements under multiple financing structures.
The analysis would factor in potential participation in Virginia’s School Construction Assistance Program grant, as well as any revenue generated by a proposed 1 percent local option sales tax currently under consideration by the General Assembly. If this local sales tax option is included in the state budget – assuming lawmakers approve a state budget by June 30 – the city would make plans for a fall referendum to ask voters to approve the 1 percent local option sales tax.
The results of Davenport’s work is to be presented at a future joint meeting of the School Board and City Council and shared publicly. Because the city, not the School Board, serves as the fiscal agent for the project, the city will need to formally engage Davenport. The agreement has been discussed with City Council’s budget and finance committee.
Both the School Board and City Council adopted the reimbursement resolutions unanimously. Under IRS regulations, an issuer of tax-exempt bonds may only reimburse itself for previously paid expenses if it has adopted a formal declaration of intent before those expenses are incurred – or within 60 days prior. The resolution covers expenses paid no earlier than the previous 60 days, and establishes a reimbursement window of up to three years from the date an expense is paid, or 18 months from the date the project is completed, whichever comes later.
Eligible expenses include costs such as financial advisory fees, bond counsel attorney fees and architectural and engineering design costs – what officials referred to as “soft” costs that arise before construction begins.
The resolutions estimate the total project costs at approximately $17 million. Of that, roughly $5.1 million is expected to come from the Commonwealth of Virginia’s School Construction Assistance Program, with the remaining $11.9 million anticipated to be borrowed through programs such as the Literary Loan or the Virginia Public School Authority, or other borrowing sources.
Officials emphasized that adopting the resolutions does not obligate the School Board or the city to issue bonds; it simply preserves the option to be reimbursed from bond proceeds if financing does move forward.
The financing discussions come after months of study and planning surrounding the future of Buena Vista’s school facilities. Earlier this year, the School Board voted to relocate middle school students into unused space at Parry McCluer High School beginning with the upcoming 2026-2017 school year, citing the deteriorating condition of the current middle school building and the need for a more sustainable long-term solution. The move is intended as an interim step while the division pursues a larger facilities project centered on renovations to the high school and construction of a new gymnasium-auditorium addition and standalone wood shop.
The current plan emerged from a facilities study conducted by RRMM Architects, which evaluated multiple options, including construction of a new middle school and extensive renovations to existing facilities.
School and city officials ultimately concluded that relocating middle school students to the high school campus and expanding that facility represented the most cost-effective approach.
Since then, the School Board and City Council have been working through the preliminary steps required before construction can begin, including selecting architects and construction delivery methods, pursuing state grant funding, and evaluating potential financing strategies.
