$10 million in interest free bonds approved

Published 12:00 am Saturday, November 6, 2010

By David Vitrano


RESERVE – The St. John the Baptist Parish school district is the first in the state to be able to take advantage of a recent federal program called Qualified School Construction Bonds aimed at speeding up both education projects and the economic recovery.

On Thursday, the School Board approved a measure that will grant the district $10 million in bonds that will be used for the extensive renovations set to begin at LaPlace Elementary School, according to Superintendent Courtney Millet.

“It really was a big deal,” said Millet. “For us it was great.”

The amount is the maximum award allowed for a school district of this size, said attorney Hugh Martin.

These bonds will replace one round of bond sales the district had anticipated as part of the bond issue approved by voters in November 2008.

The advantage of these bonds is they are interest free. According to Executive Director of Business and Finance Felix Boughton, that will save St. John’s taxpayers about $4 million over the next 15 years.

In lieu of the usual interest paid, the buyer will instead receive tax credits.

It also speeds up the bond issuance process.

“Ordinarily, when we sell you bonds, we have to apply for a rating … and have an advertised sale,” said Martin. That is a process that takes both time and money.

The government for its part has a few requirements regarding the awarding of the bonds.

“They require you to designate a school or schools you’re going to spend the money on,” said Martin.

Also, the money must be spent within three years.

One final stipulation — a matter still being hammered out — is that workers must be paid a wage set by the federal government. This means some contracts already in place may have to be reworked.

St. John originally applied for the program in its first year, 2009, but according to Martin, “St. John was not in a position to apply then.”

Although that application was rejected, it put the district in position to be the first in the state to be granted the bonds.

It seems a win-win situation for the parish and its residents.

“These bonds were anticipated to be issued anyway,” said Martin. “The only thing that changes is the money to pay it back goes way down.”