By Christopher Lenois

LAPLACE – The St. John the Baptist Parish Council’s enthusiasm over the newly voted bond issue was dampened at this week’s meeting, thanks to an Internal Revenue Service regulation that will prevent the entire $18 million from being delivered in June.

Attorney J. Hugh Martin, the bond counsellor for the parish, presented a new sale schedule to the finance committee and then to the entire council, which estimated that only $6.6 million would be eligible for delivery in the first week of June. Martin cited a “technicality” in the IRS code which prevented the emission of more than $10 million in tax-free bonds during one fiscal year.

The council had already delivered “bank qualified” bonds to reduce interest rates on some certificates of indebtedness earlier this year, said Martin. Thus the majority of the bond monies would not be delivered until January 2003.

The IRS regulation, identified as Section 265 (b) (3) (B) in the Internal Revenue Service code, is in place to help keep interest rates low for town governments, said Martin. In general, the council members took the announcement in stride. District 7 representative Steve Lee, who is a member of the finance committee, said during the meeting the timeline for accepting bids and awarding contracts was such that it would not affect projects.

“It’s going to work out fine, we can get some of the projects started. But there was no way the civic center would be built this year, for example,” said Jobe’ Boucvalt of District 5, who is also a member of the finance committee. “The administration and council is just so excited about giving something back to the taxpayers.”

District A Councilman Cleveland Farlough, who chairs the finance committee, said Martin did nothing wrong, but expressed his concern about whether this development would mean higher interest rates later when two-thirds of the money becomes available.

“The interest rates are currently down, which is why we went to the public with the bond issue,” Farlough said. “Will we get the same interest rate or will it be higher? I don’t know.”

When reached for comment, Martin said there is a possibility of a “minus side” regarding the interest rates.

“The second set [of bonds] won’t be sold until November, so the rates might go up,” Martin explained. “That’s beyond our control.”