Mehlville School District to select debt-restructuring underwriter

By MIKE ANTHONY

The Mehlville Board of Education is scheduled to consider selecting a firm to provide underwriting services to restructure the school district’s debt, including refunding some general-obligation bonds issued in 1997.

Three firms — A.G. Edwards, Banc of America Securities and L.J. Hart & Co. — presented their ideas for restructuring the school district’s debt during a recent special meeting.

The Board of Education is scheduled to consider the selection of an underwriter when it meets at 7 p.m. today — Dec. 14 — at the John Cary Early Childhood Center, 3155 Koch Road.

During the roughly four-hour special meeting that took place Nov. 28, the three firms presented a variety of proposals for refunding the 1997 general-obligation bonds at a savings of nearly $1 million.

The firms also discussed a number of scenarios of issuing new bonds and re-structuring the district’s existing debt, including some certificates of participation issued to fund the Proposition P district-wide building improvement program, with the goal of increasing operating revenue for the district. No action was taken by the Board of Education Nov. 28.

Board members last spring began discussing the possibility of placing a no-tax-rate-increase, general-obligation bond is-sue before voters.

During a Board of Education meeting in May, then-Chief Financial Officer Stephen Keyser outlined what steps needed to be taken if the board would pursue a no-tax-rate-increase, general-obligation bond issue and how the revenue from such a measure could be used. At the time, three areas of needs were identified — technology, buses and facilities.

If the school board ultimately decided to pursue a no-tax-rate-increase, general-obligation bond issue, the district’s debt-service tax rate would remain unchanged at 34 cents per $100 of assessed valuation, but would be extended for an as-yet undetermined period of time if approved by voters.

A four-sevenths majority or a two-thirds majority would be required for approval, depending on the date of the bond election.

During a Board of Education meeting in June, Banc of America Securities and A.G. Edwards made presentations regarding the proposed no-tax-rate-increase, general-obligation bond issue. At that meeting, Keyser distributed a draft of a proposed resolution that proposed a general-obligation bond issue estimated at $23.5 million.

An ad hoc committee comprised of interim Superintendent Jerry Chambers, board members Rita Diekemper and Tom Diehl, interim Chief Financial Officer Brent Bell, then-Associate Superintendent A.D. McClain and then-North Area Superintendent Eric Knost later analyzed the proposals by Banc of America Securities and A.G. Ed-wards. The committee recommended Banc of America Securities serve as the underwriter for the proposed bond issue.

On Aug. 24, the Board of Education voted unanimously to accept the recommendation that Banc of America Securities serve as underwriter.

However, at that same meeting, Chambers recommended the board not place the proposed $27 million no-tax-rate-increase bond issue on the Nov. 7 ballot, saying, “We still have some healing to do.”

Chambers acknowledged that his recommendation not to pursue the proposed no-tax-rate-increase bond issue, tentatively called Proposition S, would come as a surprise to some, but board members agreed with the interim superintendent to postpone placing the proposal before voters.

“… As superintendent, I recommend that we postpone an election with our community. We feel that through feedback we’re getting out there that it’s not the right time. There’s a number of reasons for this, and I’ll just be blunt even though we’re in public session. We still have some healing to do. We still have some convincing to do, particularly as an administration, and as superintendent I feel that I/we have to prove ourselves to the community, and I think we’ve got a long ways to go,” Chambers said Aug. 24.

Chambers also discussed how the proposed bond issue would benefit students, hence Proposition S, saying it would encompass technology, transportation, facility needs, safety, security and energy efficiency.

He emphasized the no-tax-rate increase aspect of the proposed bond issue, but noted that if the measure is not placed on the ballot or was not approved, the district’s debt-service tax rate would drop by 10 cents.

Since then, some board members have suggested conducting a community survey and public-engagement process before pursuing a ballot measure, and the Board of Education voted last month to award bids for a community survey and a public-engagement process to Unicom-ARC.

A committee comprised of Chambers and three Board of Education members — Vice President Karl Frank Jr., Diehl and Micheal Ocello — had recommended the bids for the community survey and public-engagement process be awarded to Unicom-ARC.

Unicom-ARC’s bid for the community survey is $21,750, and the firm’s bid for the public-engagement process includes a monthly fee of $4,000 to $6,000 for a roughly six-month period, including professional fees. Reimbursables, such as printing, video production, travel and graphic design, would be billed at cost.

The district had issued a request for proposals, or RFP, for the community survey and the public-engagement process with an Oct. 18 deadline.

The district received four bids for the community survey — a fifth bid was received after the deadline and not considered — and three bids for the public-engagement process. In reviewing the proposals, the committee unanimously agreed to conduct interviews with two of the firms — the Vandiver Group and Unicom-ARC — for both the community survey and the public-engagement process.

The interviews were conducted Oct. 31 by the four committee members, Knost, who was named deputy superintendent Nov. 15, and Bell.

Based on those interviews, Chambers wrote, “It is the unanimous recommendation of the committee to award both RFPs to Unicom-ARC.”

Unicom-ARC last served as a consultant to the district in late 1999 and 2000, conducting a public-engagement process that led up to the successful passage of the Proposition P districtwide building-improvement program six years ago.