Gateway floats $40 million bond for capital improvements, including middle school

The Gateway Board of School Directors voted to float a bond of up to $40 million in order to pay for capital projects around the district and to renovate Gateway Middle School as part of a district-reconfiguration plan.

The resolution passed 7-2 during the board’s March 17 meeting. Board members Paul Caliari and Scott Gallagher dissented. They were not immediately available to comment.

The district’s business manager, Paul Shott, said the middle school’s renovation will cost about $30-35 million. Schott said the project has not been bid.

“We are definitely within the parameters of the bond for the renovations,” said Superintendant Bill Short. The renovation plans were to be reviewed during a buildings and grounds committee meeting that was scheduled for March 19, but the meeting was canceled.

The plans include renovating Gateway Middle School in order to house fifth- through eighth-grade students. Moss Side Middle School, the building situated on the district’s campus that currently houses fifth- and sixth-graders, would be used only as offices for administrative staff.

District officials have said the money from the bond will be used for other capital projects around the district, but it is unclear what those projects entail. District officials did not respond to requests for comment.

“We do know where the money is going. We do not know the exact dollar amount as of yet. We do have an estimate,” said Rick McIntyre, the board’s vice president. He said he trusts the administration to continue to work to get the district the best deal on renovations.

During an agenda-setting meeting held March 12, Chris Shelby, managing director at Piper Sandler, said the bond market is favorable currently due to record-low interest rates.

“Rates are now, absolutely, at the lowest point they’ve ever been in the history of our country,” Shelby said, addressing the school board. At the time, he said the 10-year bond’s interest rate was down to around 0.8% and the 30-year bond’s rate was 1.2%. As of March 19, that rate has increased to 1.12% for the 10-year bond and to 1.78% for the 30-year rate, according to the U.S. Department of the Treasury.

As a sidenote, Shelby said the district’s refinancing of a 2012 bond will return a little more than $1 million over its lifetime, which ends in 2032. That means the school district will see an extra $70-80,000 in savings per year.

“So you have that going into this. That’s good,” Shelby said.

The bad news, Schott said, is the district’s interest earnings on excess cash deposits will be down $500,000.

“So there’s some good, there’s some bad. That’s more of a short-term thing. But again, in terms of this new money, we’re looking at a longer term great situation,” Schott said.

The business manager also said the bond will mean a property tax increase for Monroeville and Pitcairn residents.

The board’s decision to renovate Gateway Middle School comes after it asked Monroeville council to rezone the land to increase its sales values as a commercial property. Council never rezoned the property, saying it needed to know what would replace the school.

The 115,000-square-foot building, first built in the 1950s, was appraised in January 2018 and listed for sale without an asking price three months later.

The idea was to use the proceeds from the sale for the construction of a new building to house sixth-, seventh- and eighth-graders. Fifth graders would have been placed within the district’s four elementary schools.

When no favorable offers came to the district for the property, it was removed from the market in September.