Three different types of bonds have been approved for sale: $2,266075 in general obligation bonds; $1,973,925 in Qualified School Construction Bonds (QSCBs); and $260,000 in Qualified Zone Academy Bonds (QZABs). Formation of a committee for establishing final terms for the QSCBs and QZABs was also authorized.
Voters approved the bond issue for remodeling, renovating, equipping and furnishing classrooms at Monett Elementary School by a margin of about 86.43 percent.
The QSCBs and QZABs are part of the $11 billion federal economic stimulus program authorized by the United States Congress for 2009. The recently approved Jobs Bill, known as the Hiring Incentives to Restore Employment (HIRE) Act, contains provisions that alter the QSCB and QZAB programs from a tax credit to a tax subsidy situation.
The change is beneficial to the R-1 District in that the U.S. Treasury will be responsible for fully reimbursing the district for the interest expense over the life of the QSCB and the QZAB bonds. The interest saved on both issues will be about $1,240,325, compared to what the regular 3.8 percent tax-exempt rate would have been for a 15-year period, said Larry J. Hart, president and chief executive officer of L.J. Hart and Company.
In addition, the QSCB and QZAB programs will earn interest for the district on the annual principal accumulation deposits, estimated to be 2.5 percent. Interest earnings will total approximately $307,165.
When we add both of these figures together, said R-1 School Superintendent Dr. John Jungmann, the gain for our taxpayers is about $1,547,490.
The Board of Education selected the negotiated sale of the general obligation bonds in order to capture current market conditions. The proposed interest rates were based upon current conditions in the municipal bond market. Proposed interest rates were compared with national bond indexes for general obligation bonds and other comparable Missouri issues.
Based upon pricing of these other financings on June 30, 2010, our rates were as good as or better than some public sales and other negotiated sales for a similar quality level of bond issue, said Jungmann.
The general obligation bonds are scheduled to mature on March 1, 2011, through March 1, 2030. Reoffering yields will range from .75 to 4.25 percent. The bonds carry an AA+ rating from Standard & Poor's Corporation due to the district's participation in the State of Missouri Direct Deposit Program, which is coordinated through the Missouri Health and Educational Facilities Authority.
The closings for the bond issues will occur on July 21.