City denies Key School bond request

Renovations have already started at the Key School's Hillsmere Drive campus, but the school's plan to borrow money from the city to pay for the work hit the end of the road earlier this week.

Representatives of the private school could not convince enough aldermen to issue $9.3 million in bonds at Monday night's City Council meeting.

"We're really disappointed in their decision," said Head of School Marcella Yedid. "We really felt we made the case that we're an asset to the community."

School officials said they now plan to ask the county for the loan. The county gave the school a loan in 2003.

Despite being located outside of Annapolis, school officials were hoping to borrow the money tax-free from the city, in a move to avoid higher costs. But school officials did not receive a majority approval from council when the ordinance came up for vote Monday.

The vote ended in a 4-4 tie with aldermen Richard Israel, D-Ward 1; Fred Paone, R-Ward 2; Julie Stankivic, R-Ward 6; and Ross Arnett, D-Ward 8, voting against the deal.

Classie Hoyle, D-Ward 3; Sheila Finlayson, D-Ward 4; Samuel Shropshire, D-Ward 7 and Mayor Ellen O. Moyer voted for the loan. Alderman David Cordle, Sr., D-Ward 5 was absent.

City Council members questioned the surety of the deal in an economically turbulent climate. Mr. Israel likened the deal to the savings-and-loan crisis of the 1980s.

School officials and the city Finance Department assured the council that the city's credit would not be pledged in the deal and that it was cheaper for the school to seek the bonds from the city.

Officials from The Key School were hoping to use $5 million to renovate the 17,000-square-foot upper and middle school building built in the early 1900s, referred to as "The Barn." The work also would add 10,000 square feet to the structure.

The remaining $4.3 million would be used to pay off the earlier loan from the county.

The state and the county usually charge processing and other fees for issuing similar bonds. The city does not charge any fees.The city has issued similar bonds to St. John's College, most recently $14 million in 2007. Residents and aldermen were uneasy about issuing

money to an entity outside of the city, however.

School officials tried to convince aldermen that it has sufficient connections to the city with roughly 40 percent of their students, faculty and staff living in Annapolis.

Ms. Yedid said the school will probably go back to the county to help finance the renovations.

"Timing is of the essence," Ms. Yedid said. "We were really hoping for a resolution."