07.01.09: Qualified School Construction Bond Update
By David Walrath
I encourage all small school districts that are looking for funding for energy conservation and energy generation projects (solar, etc.) to consider these almost interest free bonds as a method to pay for the energy efficiency and new generation infrastructure projects. Many SSDA Associate members in financial services, energy services and school facility program services can help you with applying for the funds and issuing the bonds.
While the principal on the bonds will have to be repaid, these are tax credit bonds that will have almost no interest costs. I also encourage small districts to work together to explore using the same financial services firms to reduce issuance and other bond sale costs.
Energy efficiency and energy generation are a good use of these bonds; they are not limited to energy projects. They can be used for almost any type of school construction or renovation.
From the California Department of Education:
Stakeholders: The California Department of Education (CDE) is preparing the parameters and one-page application for the Qualified School Construction Bond program in collaboration with the Governor’s Office, the State Treasurer’s Office and the Department of Finance. In the event the program is oversubscribed, (an issue we did not discuss in our June 9 stakeholder meeting) we are proposing the following:
- A July 31 application deadline.
- If oversubscribed, an August 7 lottery will be conducted by the CDE. Such lotteries have been conducted in the past for the Qualified Zone Academy Bond program allocations.
- If not oversubscribed, applications will be approved and allocated in date order from July 31 through October 1, 2009. Date order is established by the postmark and/or date stamp when hand delivered.
- A subsequent allocation period after October 1 will be considered if bond allocations are still available.
The lottery was our best answer to the possibility that the program is oversubscribed on day one of this new program. We do not know this to be the case, but we think it prudent to be prepared for such a case.
The parameters and application will be posted to our web page by the end of this week. We will be requiring school board approval of the filing of an application. A proposed project list and estimated cost will also be required, although we acknowledge that the project list may change. A $25 million cap per Local Education Agency with no minimum is also anticipated.
We again thank all of you for your interest and input.
