During the work session on October 10th, representatives from Summit Charter School in Cashiers approached the Jackson County Board of Commissioners, seeking a $2.5 million loan to facilitate the construction of a new high school building. The pressing need for expansion was attributed to the notable surge in enrollment, which had risen by 28 percent over the past four years, as highlighted by Kurt Pusch, the school’s head.
Pusch emphasized the urgency of their expansion plans and the ongoing efforts to adjust the facility to accommodate current and anticipated growth in student numbers. To support this endeavor, the school had initiated a capital campaign with the aim of raising $6.5 million. So far, they had managed to secure $4.8 million through cash and pledges, including $2 million in cash.
The intended purpose of the loan, as explained by Pusch, was to assist in managing cash flow during the construction phase. However, prior to the presentation, Board Chair Mark Letson requested to be excused due to his position on Summit’s board. During the discussion, Commissioner Mark Jones inquired about the possibility of charging interest on the loan, while Commissioner Todd Bryson sought information regarding the county’s ability to set the interest rate.
In response, County Manager Don Adams clarified that although interest would be applicable, the primary objective was not profit-making. Rather, it aimed to compensate for the interest that the county would have accrued if the funds had remained in its accounts. At present, the county was earning an interest rate of 5.5 percent.
To meet their timeline, Summit required the funds and completion of the loan by the beginning of the following year. Adams proposed that the commissioners make a prompt decision, ensuring the loan process could be finalized by January. The proposed term for the loan was 36 months.
Considering the newness of the situation for the county, Bryson expressed concerns regarding potential risks. Adams assured the commissioners that most of the risks would be mitigated through securing a deed of trust on the property and a promissory note in the event of default. However, he also emphasized the challenges associated with foreclosing a public school.
Regarding the source of the loan, Adams suggested utilizing the general fund balance. Bryson sought clarification from Pusch about whether the school would repay the loan earlier if sufficient funds were raised before the designated term. Pusch confirmed that the school would indeed repay the mortgage ahead of schedule in such a scenario.
Jones confirmed that Summit had explored options with at least one bank but found the terms unfavorable. When asked about accepting promised pledges as income, Jones expressed confidence in the strong financial support from reliable individuals associated with Summit.
The commissioners agreed to examine the school’s financials for risk assessment, similar to the process followed for a bank loan application. Despite personal reservations about charter schools diverting funding from traditional public schools, Jones acknowledged Summit’s positive track record and academic achievements over the years.
Adams clarified that Summit had requested a fixed rate and would not be offered an adjustable rate to cover potential fluctuations in interest rates. The next steps would involve presenting the school with a letter of intent outlining the subsequent procedures and conditions, which would require scrutiny from the county attorney to ensure legal compliance.
Adams also highlighted that Summit would be accountable for all associated attorney fees, including the review process. Additionally, the board might stipulate that Summit exhaust the $2 million in hand before receiving the loan, ensuring additional value investment in the property, currently appraised at $345,000.
Due to the remote participation of two members and Letson’s recusal, the commissioners did not take any action during the October 17th work session. As a result, the meeting was adjourned until October 24th, when a vote was expected to be held.
