School Board authorizes $30M loan to jumpstart Hurricane Ida repairs
Published 12:06 am Saturday, December 11, 2021
LAPLACE — The St. John the Baptist Parish School Board voted Thursday to authorize a $30 million loan for the purpose of financing Hurricane Ida repairs at school sites.
Toby Cortez, managing director at Stifel Financial Corp., told Board members insurance proceeds and FEMA money can be used to repay the loan. This process has been used by other school districts including Calcasieu, Vermillion and St. Landry to move forward with hurricane repairs while waiting on money from insurance and the federal government.
“This instrument is put in place so you can get back up and running as fast as you possibly can,” he said.
Cortez said the most beneficial bid on the loan comes at a rate of 1.75%, interest only, for five years. The School Board would have the option to repay the loan beginning in 2023, one year after closing.
The authorization of the loan this week was the culmination of a process that started a little more than two months ago. At the time, Board member Debbie Schum said the School Board was simply “pre-approved” for a $30 million loan but may not need to borrow the full amount.
At the December 9 meeting, Cortez recommended drawing down the full $30 million based on the low interest rate and the number of invoices that need to be paid.
The LaPlace Elementary and Emily C. Watkins school sites received the most damage during Hurricane Ida and are not anticipated to reopen by the end of the 2021-2022 school year. Meanwhile, East St. John students are still following an A-day, B-day pattern at the Leon Godchaux site while waiting on campus repairs.
Attorney Jason Akers of Foley & Judell, LLP told the School Board that the loan can only be used for costs associated with hurricane recovery, such as renovation of facilities or environmental remediation at school sites.
School Board member Ali Burl III was apprehensive about authorizing the loan without having a chief financial officer in place to oversee it.
“I think we need to be very cautious on how we are spending these funds because we are going to have to pay the money back. We need to make sure we are spending this money correctly, and I am very concerned that we have no team in place to monitor it and make sure we are spending it all on hurricane issues,” Burl said.
The motion to authorize the loan passed with 10 in favor and one School Board member absent.