State to pay most of San Benito’s $40 million bond issue

SAN BENITO — As he oversees one of the school district’s biggest projects in decades, board President Orlando Lopez says a state program is expected to pay most of a $40 million bond issue to help “maximize” finances.

Last week, RBC Capital Markets, an international investment bank planning the bonds’ financing, told school board members the state is expected to pay about 69 percent of $30.7 million worth of bonds sold last year to fund the construction phase of a $20 million performing arts theater, a $5 million to $6 million aquatics center and a $5.1 million indoor sports practice field.

Next month, officials plan to sell the remaining $9.25 million in bonds, of which the state is also expected to pay a significant portion.

“It’s great news to us,” Lopez said. “We’re maximizing our efforts. It’s huge for our community.”

The Texas Education Agency’s Existing Debt Allotment program provides school districts struggling with low tax bases with money to help pay off debt.

Officials estimate the district will realize “gradual” savings totaling about $20 million over a 20-year term stemming from last year’s $30.7 million bond sale, board member Victor Rosas said.

“It’s a huge reduction on our monthly bond payment,” Lopez said.

Next year, the state program is expected to pay about $1.1 million of the annual $1.6 million payment stemming from the $30.7 million bond sale, leaving the district to fund about $498,279, Superintendent Nate Carman stated.

“It’s a win-win for the community,” board member Angel Mendez said. “It’s going to leave us with a healthy fund balance so the district will have more funds available to use in other areas.”

Officials will plan the use of the district’s savings, which will go into its general fund, Lopez said.

“We’ll make an assessment of the wants and needs of the district and the improvements we need,” he said.

Bonds’ interest rates

The projects are being funded through the $40 million bond issue which 54 percent of voters passed in November 2018.

The bond issue won’t force a tax hike in the district, whose property tax rate stands at $1.3 per $100 valuation, Lopez said.

In February 2019, the district sold $30.7 million worth of bonds at a 3.8-percent interest rate, with the money earmarked to fund the projects’ construction phase, district spokeswoman Isabel Gonzalez stated in a press release.

Last week, R. Dustin Traylor, a managing director with RBC Capital Markets, presented school board members with plans to sell the remaining $9.25 million in bonds Feb. 18 to make the money available by mid March, she stated.

“Because interest rates have trended lower since February 2019, the district can expect favorable rates,” she stated.

Indoor practice field

On the construction site, Joseph Palacios, the district-contracted project manager, said he’s working to cut costs on the projects Gonzalez stated would “forever change the landscape of our district (and) bring resources and new opportunities for our students for generations to come.”

So far, the projects are coming in “under budget,” Lopez said.

“We are anticipating building out the three facilities in the bond election well within the overall bond they sold for these facilities,” said Palacios, president of the Brighton Group.

As he worked to finalize the indoor practice field’s price, Palacios said he reduced the synthetic field from 90 yards to 80 yards to cut about $800,000, setting the project’s price tag at $5.1 million.

Now, the district is paying $75.22 per square foot for the 68,706-square-foot facility near Bobby Morrow Stadium, he said.

“Significantly, we got a phenomenal price,” he said.

In the Rio Grande Valley, the facility will stand as the largest indoor practice field, which the district’s sports teams will share with cheerleading squads, he said.

In Brownsville, he said, Rivera High School is home to the Valley’s sole indoor practice field, a 31,123-square-foot facility which cost $96.39 per square foot to build in 2016.

The project includes construction of a 10,000-square-foot workout facility featuring a weight room.

“This is the biggest, we believe, in the Valley,” Palacios said of the workout facility.

Hellas Construction, the Austin-based subcontractor specializing in sports facilities, is working with Houston-based PBK Sports to complete the project by June, he said.

Performing arts theater

Across 40 acres of district-owned land near Dr. Raul Garza Elementary School off Interstate 69 near Eighth Street, Palacios said he’s working to cut costs after launching construction in December on the district’s first performing arts theater and aquatics center.

“This has been moving along very proficiently,” he said of the project to build the estimated $20 million performing arts theater, which will be attached to the aquatics center, with a price tag projected at $5 million to $6 million.

Palacios, who’s working with San Antonio-based Davila Construction and ROFA Architects in McAllen to build the performing arts theater and aquatics center, said he expects to finalize prices in about two months.

“We found significant savings we’ll continue to work on,” he said. “We are anticipating good competitive pricing.”

For decades, the district’s students have turned to the cafeteria and make-shift stages to perform the arts.

Soon, the performing arts center, whose size is estimated at about 65,000 square feet, will give students their first stage to perform theater arts, choir, mariachi, conjunto, folklorico and jazz.

Aquatics center

Next to the performing arts theater, Palacios is building an estimated 23,000-square-foot aquatics center featuring two swimming pools.

Palacios said the aquatics center, which will be available to the community, will feature an 11,700-square-foot University Interscholastic League-approved competitive swimming pool featuring a diving section along with 10 vertical lanes and 10 horizontal lanes.

The center, which will give students their first swimming pool, will offer officials an opportunity to field the district’s first swim team.

The center will also feature a 37,000-square-foot “warm-up” swimming pool aimed at teaching second-graders to swim, Palacios said.

Construction of the performing arts theater and the aquatics center is expected to be completed by about 18 months, he said.

The contract

In March 2019, school board members hired the Brighton Group to serve as project manager.

“Brighton Group LLC. and its project team have extensive experience in not only overseeing all aspects of design and construction but also in the operations of the facilities,” Palacios wrote in his December 2018 proposal.

“Our objective is to provide high-quality professional support services that ensure the timely and efficient compliance with all program objectives and the composition of a high-quality project management system,” he wrote.

As part of the contract, the district is paying the Brighton Group $1.25 million.

Under the agreement, the district pays the company $50,000 a month.

“The aforementioned amounts are being calculated upon an estimate of $30 million in final construction costs, not including costs of consultants …,” the contract states.

As part of the contract’s attached professional services agreement, the Brighton Group will also oversee the district’s LED lighting program.

“Brighton Group LLC will manage the LED lighting program for San Benito CISD,” the agreement states.

Under the agreement, the district will pay the Brighton Group 4.5 percent of the LED lighting program’s total costs, excluding the company’s fees.