Lindbergh School District to receive $7.1 million in interest-free bonds


The Lindbergh School District will receive more than $7.1 million in interest-free construction bonds through the federal stimulus package that will save district taxpayers roughly $3 million.

The Board of Education voted last month to apply for $11.7 million in Qualified School Construction Bonds. State officials announced last week Lindbergh will receive $7,165,910 in interest-free federal bonds awarded through the American Recovery and Reinvestment Act.

Including Lindbergh, 33 Missouri school districts will receive a total of $141,441,000 in interest-free bonds to fund construction projects financed through voter-approved bond issues.

In Lindbergh, the bonds would be issued as part of Proposition R 2008, a $31 million bond issue approved by voters last November.

Prop R 2008 received 20,378 “yes” votes — 72.4 percent — and 7,770 “no” votes — 27.6 percent.

A four-sevenths majority was needed to approve the measure, which will not increase Lindbergh’s debt-service tax rate, but extend the current rate of 38 cents per $100 of assessed valuation an additional five years.

Chief Financial Officer Pat Lanane told the Call he was pleased to learn Lindbergh will receive more than $7.1 million in interest-free federal bonds, which are coming from a pool of $11 billion in bonds throughout the nation.

“… It is all good news and it will result in, it looks like to me, in just that much less interest being (collected) in tax dollars …,” he said. “… We think it will have the effect — if nothing else — of really changing some of that money that would have been paid to interest now will end up as money that … we’ll probably never collect it, is what will happen … That will be just that much less that it will take to retire the bond issue.”

The interest-free federal bonds will be sold sometime before the end of the year, according to Lanane.

“… We’ll sell these bonds pretty much the way we always do,” he said. “We’ll have an open, competitive bid for them and there will be an interest rate set, but that interest rate will never be paid by us. That interest will then go back to the people who own those bonds in the form of a federal tax credit so that they can use these to offset their taxes …”

In March, the Board of Education voted to approve the sale of $10 million in general-obligation bonds to fund Proposition R 2008 projects.

By seeking bids for the sale of those bonds, Lindbergh officials saved district taxpayers nearly $677,000.

Nine bids were submitted to purchase the first $10 million installment of Proposition R 2008 bonds, and the school board approved a resolution authorizing the sale of the bonds to Robert W. Baird & Co. Inc. of Red Bank, N.J. Robert W. Baird & Co.’s true interest cost of 4.557 percent was the lowest of the nine bids submitted, according to Lanane and the district’s financial adviser, Joy Howard of WM Financial Strategies.

Morgan Stanley & Co. Inc.’s true interest cost of 4.941 percent was the highest of the nine bids.

The difference between the lowest and highest bid “is huge,” Howard told school-board members March 10, the day of the bond sale.

The Board of Education had placed Prop R 2008 on the ballot with the goal of providing a long-term solution to space concerns at Sperreng Middle School.

More than 1,300 sixth-, seventh- and eighth-graders are jammed into the middle school that was designed to accommodate 800 pupils when it opened in 1970.

While Sperreng will remain a sixth- through eighth-grade middle school, funds from Prop R 2008 will be used to convert Truman Elementary School to a sixth- through eighth-grade middle school, add onto Crestwood and Long elementary schools, convert Concord School to an elementary school and construct a new Early Childhood Education building next to the Administration Building.