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Rockingham County officials hoped to lock in a no-interest loan by the end of the year to help pay for the construction of a $14.5 million replacement for Douglass Elementary School in Eden.

But a dearth of lender interest and a looming deadline motivated officials to hold off on the financing. The county also hopes to receive more federal stimulus dollars and find more financial institutions willing to buy the special bonds.

“There are no guarantees that there will be any banks willing to do this next year,” said Michael Apple, the county’s finance officer. “I think there will be some.”

Douglass Elementary is one of four new schools the county needs to accommodate student population growth and replace old buildings. The Board of Education approved Douglass’ replacement in February, and the school has since been designed and assigned to a company for construction oversight. The district still plans to begin construction in March.

School board members hoped to take advantage of the federally funded Qualified School Construction Bond program that would offer a tax credit to a lender in return for issuing a no- or low-interest loan. Rockingham has $4.3 million in state-allocated bonds to sell, but the loan must close by Dec. 31. One bank expressed interest but wanted to charge the county 2 percent interest, Apple said.

The county decided to take its chances and wait for a better deal.

“The schools were kind of rushing up the design and everything so that we could close on the loan by the end of the year,” Apple said. “We just decided it was too late in the game, and what they (the bank) were offering us was just not that attractive.”

Rockingham’s situation is not unique. Counties across the state have been unable to take advantage of the stimulus program because lenders won’t come forward. In return, the N.C. Department of Public Instruction offered to roll over the allocations and allow counties to use the funds next year, said Roger Ballard, a consulting architect with the department’s school planning division. The state also expects to receive additional stimulus money next year, he said.

County officials have other options for Douglass. They already plan to pursue a more traditional loan to cover the remaining construction costs. Commissioners and school board members could agree to hold a bond referendum or finance through a certificate of participation, which does not require voter approval. But the county would pay back any loan through lottery and sales tax revenue, Apple said.

In the meantime, the district plans to move forward with its construction timetable.

“They all understand the economic conditions and the plight of the county commissioners,” said Bill Holcomb, associate superintendent, about the school board. “But they’re optimistic. I’m optimistic.”

Contact Morgan Josey Glover at 627-4881, Ext. 119, or morgan.josey@news-record.com