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Endowment donors get first chance at Three Rivers bonds
POPLAR BLUFF, Mo. -- Three Rivers College Board of Trustees voted Thursday in a special meeting on requirements donors must meet to participate in the initial offering of a donor secured bond sale.
Three Rivers has $5.4 million in bonds to sell, with preference given until December to those who contribute to the Three Rivers Endowment Trust.
The college plans to sell $12.4 million in bonds, with a second offering expected in the spring. The funds are to support construction within the next 18 months of an eastern campus at Sikeston, Mo., and a classroom building at the Poplar Bluff, Mo., campus. Discussion of funding for a new facility at Kennett, Mo., has also been discussed in connection with the fundraising effort.
The debt is to be repaid over the next 20 years at payments of $900,000 to $1 million annually.
Endowment Trust donors can purchase bonds during the first offering at a one-to-one rate, according the trustees' 4-0 vote, meaning donors cannot purchase an amount of bonds higher than their charitable donations. The measure also allows donors to purchase bonds based on pledges made over three to five years.
It was approved 4-0. Trustees Wilbur Thornton and Darren Garrison were absent for the vote, although Garrison was able to participate by phone for a portion of the meeting. Trustee Ben Ressel also participated by phone.
Bonds will be sold in $5,000 increments, said Emily Parks, Endowment Trust executive director and Three Rivers director of development and governmental affairs. There is no guarantee a donation to the Endowment Trust will result in the purchase of bonds or that bonds will be available in December, according to Parks.
Thursday's meeting was held to define the process used to accomplish the sale of bonds, which are an enticement to donate to the major gifts campaign, she said. Under an agreement between the college and the Endowment Trust, money from donors will be invested by the Endowment Trust and the return on investment given to the college to help repay the bonds that are sold.
The trustees' vote altered slightly an eligibility document the Endowment Trust had created, which stated cash in the bank was necessary before donors could purchase bonds.
It was written with two main principles, Parks said.
"Our understanding at the beginning was that it would be a one to one match and there had to be a guarantee the money was in the bank ? and that a pledge gift would take time to return on investment," Parks explained.
Endowment Trust member Dr. Marty Michel told trustees donors could be required to sign a legally binding pledge document, while Board of Trustees Chairman Randy Winston added the full amount of donations will not be needed right away.
The discussion also raised the question of how specific donors could be when identifying the project their funds would support.
Donors can designate their contributions to either the Poplar Bluff project, or the eastern campus project, according to officials at the meeting.
Federal regulations related to securing donations and sale of the bonds will not allow contributions to be designated in a more specific way, for instance to a specific building, said Three Rivers President Dr. Devin Stephenson.
Endowment Trust Chairman Allen Brooks had raised concerns the public would be more interested in an event center, which has also been planned for the Poplar Bluff campus at a later date.
"When the project first started ? we promised a classroom building and an event center here. Shortly after, the eastern campus ? got legs. Now we're adding the Kennett project, but the promise of the whole campaign was the Eastern campus and the Poplar Bluff campus," Brooks said.
Stephenson confirmed that under the current plan, the event center would not be funded through the first two rounds of bond sales. He said the proposal could be recalculated for the second round of bond sales, adding the college may be eligible for an additional $2.7 million in Federal Emergency Management Agency grant money at the main campus.
Trustee Phil Davis said he felt the classroom buildings were of a more critical need than the event center.
Brooks agreed academics should take priority, but said he was concerned the current plan was different than what was initially represented to supporters.
"We need to stand by what we told people we were going to do in the beginning with money," he said.
In both cases at Sikeston and Kennett, property was donated to the college without it looking for property, said Endowment Trust member Scott Matthews, who donated property at Sikeston.
He asked if the college should limit donations or purchase of bonds if it would change the college's priorities, saying residents at Sikeston and Kennett would not be as concerned with an activity center in Poplar Bluff as they would buildings at their own campuses.
"There has to be flexibility built into the planning," he said.
The event center is a critical part of the master plan, according to Stephenson.
Trustees asked if these concerns could be resolved if they considered adding the event center to a proposal related to the second issuing of bonds. Brooks said it would show the event center is still a priority.
Matthews suggested it would be easier for people to buy into the projects if they could do so at 50 cents on the dollar, for example, and were not required to donate as much as they would purchase in bonds.
Garrison indicated he was uncomfortable with doing that, at least initially.
Parks said the trustees would have to consider how much risk they wanted to put themselves and the college at if they did not have a donor to match the amount of bonds sold.
Others at the meeting said the college may get donations from people who choose not to purchase bonds at all.
Poplar Bluff, MO