By ROBERT CHALUPNY
Staff Reporter
With a $500 million bond issue slated to appear on the November ballot, the Metropolitan St. Louis Sewer District Board of Trustees has finalized its financing team for the bond issue should it be approved, but not without turning heads.
The board last week approved an amendment and adoption of an ordinance that replaces Bear Sterns with Banc of America Securities as the lead bond underwriter for the anticipated $500 million bond issue.
The complete financing team consists of Banc of America Securities as the lead underwriter followed by Bear Sterns, senior underwriter; A.G. Edwards & Sons Inc., senior underwriter; Edward D. Jones, senior underwriter; Stifel Nicolaus, senior underwriter; Kirkpatrick Pettis, co-manager; Loop Capital, co-manager; George K. Baum, co-manager; Siebert, Branford, Shank & Co. LLC, co-manager; and Stern Brothers, co-manager.
As a result of the change, Edward D. Jones and Stifel Nicolaus are no longer a joint venture on the finance team and now become separate entities giving each company an increased role in the financing.
Stifel Nicolaus is the company in which MSD board Chairman Robert J. Baer is a stockholder. Baer owns more than 3,600 shares in the company.
This issue was brought up at the recent board meeting by longtime MSD critic Tom Sullivan, who has written a letter to U.S. Attorney Ray Gruender’s asking him to investigate whether Baer was involved in the change giving Stifel Nicolaus an increased role in the financing.
Sullivan also said that the total shares that Baer owns are worth about $45,000
The board collectively denied there was any misconduct by Baer and was not involved in the decision to alter the financing team.
Trustee Dee Joyce-Hayes said that Baer deliberately excluded himself from all involvement in the matter due to a conflict of interest.
“Those accusations are not fair to our chairman or to the rest of the board,” Joyce-Hayes said.
Baer was absent from the meeting due to illness and was unavailable for comment before the Call’s press time.
The bond issue originally was scheduled to appear on the April ballot, but when five new trustees were appointed, the board voted to remove the proposition from the April ballot. The board later voted to place the bond issue on the Nov. 4 ballot.
The measure is designed to fund $647 million in capital-improvement projects over three years.
Last October the board issued a report of its strategic plan that outlined several hundred projects totaling nearly $3.5 million over the next 30 years, not including stormwater projects.
Projects scheduled to occur during the first three years include the most severe systems that need replacement as well as some projects the district is trying to get ahead on to avoid getting behind on regulatory issues with the U.S. Environmental Protection Agency and the Missouri Department of Natural Resources.
