School districts get help with construction projects from stimulus bonds

Despite a failing economy, construction and financial experts continually told the Cape Girardeau School Board the time is now to pursue construction projects, in part because of low interest rates.

One of the components of what experts deemed a perfect storm kicked in last week when Gov. Jay Nixon announced the latest round of no-interest construction bonds awarded through the stimulus package.

Low-interest bonds through the American Recovery and Reinvestment Act and low interest rates were selling points for some districts that turned to voters in the past year for construction projects.

"We talked to them about the fact that with this program and the fact that a lot of people are looking for work, this is your perfect storm," said Mike Kiehne, superintendent of the Richland School District. Voters of the Stoddard County school district approved a $750,000 bond proposal in November.

Richland is one of five Southeast Missouri school districts collectively receiving $9.08 million of the $146 million in interest-free Qualified School Construction Bonds announced by Nixon last week.

Bloomfield, Cape Girardeau, Pemiscot County and Ste. Genevieve school districts were also on the list, the second round of bonds awarded through the program.

Last year, the state awarded $141 million of the interest-free bonds. Districts are also pursuing other low-interest bonds through the stimulus package including Qualified Zone Academy Bonds and Build America Bonds.

As area administrators begin tackling construction projects, they said their districts will begin to see immediate savings from the programs. Some districts will do more renovations, set lower tax rates or pay off projects sooner because of the bonds.

With Qualified School Construction Bonds, bondholders receive federal tax credits in lieu of interest paid by school districts.

Kiehne said the recently awarded bonds will help increase the scope of the district's project, which will fund heating and air conditioning upgrades and window replacements.

"This will give us a great shot in the arm," he said.

Cape Girardeau will receive the most in the area, $4.2 million in interest-free bonds toward its $40 million bond proposal that passed in April.

The school board will have a special meeting at 6 p. m. Tuesday to discuss bond pricing. Meetings are at district administrative offices at 301 N. Clark Ave.

Statewide, Springfield and Rockwood school districts received the most, with more than $7 million in the bonds.

The Pemiscot County School District will receive one of the lowest amounts, $178,232. The small kindergarten-through-eighth grade district passed a $425,000 bond issue in November for school upgrades.

With recent cuts from the state, the district's tax structure may not support issuing the full amount of the bonds without a rate increase, said superintendent Anthony Hartsfield. The district will issue the interest-free bonds and begin with window replacements, Hartsfield said.

"It's hard to turn down zero percent money," he said.

When the Bloomfield School Board meets to set the tax rate in August, taxpayers might get a small break because of the program, said superintendent Dr. Nick Thiele. Although he answered questions about the low-interest programs during the bond campaign, he said he did not use it as a selling point for voters.

"I didn't want to get everybody's hopes up unnecessarily," he said.

He said he calculated the worst-case scenario, a 27 cent tax increase to support the $1.5 million bond issue that passed in April for roof replacements and repairs. That amount could be reduced to 25 cents with the interest-free bonds, Thiele said. He said the district could save between $200,000 and $300,000 in interest in 20 years.

In Ste. Genevieve, superintendent Mikel Stewart said the district and its voters saw an opportunity with the current economic conditions.

The district started a facilities committee in the fall and passed a $9.5 million bond proposal in April to add classrooms to two elementary schools and build an auditorium.

"Our needs were there, and we were aware of those needs," he said.

It was the sixth bond issue to pass in his 20 years as superintendent, he said. He estimated the district could save $4 million over 15 years by using Qualified School Construction Bonds and other low-interest bond programs.

"That just helps the taxpayer," he said.

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By the numbers

Five Southeast Missouri school districts are among 60 receiving bonds in the latest round of Qualified School Construction Bonds awarded by the state. Under the program, which is through the American Recovery and Reinvestment Act, bondholders receive federal tax credits in lieu of interest paid by the district.

School district: Amount in Qualified School Construction Bonds, Bond issue

Bloomfield: $660,832, $1.5 million

Cape Girardeau: $4,203,408, $40 million

Pemiscot County: $178,232, $425,000

Richland: $319,439, $750,000

Ste. Genevieve: $3,719,779, $9.5 million

Pertinent address:

301 N. Clark Ave. Cape Girardeau, MO

505 Court Street Bloomfield, MO

24456 State Highway 114 Essex, MO

1727 County Highway 536 Caruthersville, MO

375 N. Fifth St. Ste. Genevieve, MO