Schools get bonding OK for repairs, renovationsSchool districts in Murdo, Mount Vernon, Corsica and Kimball are among seven South Dakota districts that have been approved for nearly $2.5 million in bonding authority under the federal government’s Qualified Zone Academy Bond Program.
By: Ross Dolan, The Daily Republic
School districts in Murdo, Mount Vernon, Corsica and Kimball are among seven South Dakota districts that have been approved for nearly $2.5 million in bonding authority under the federal government’s Qualified Zone Academy Bond Program.
The bonding authority available statewide in fiscal year 2009 was tripled by the American Recovery and Reinvestment Act. Under the program the Corsica School District received $250,000 in bonding authority; the Mount Vernon School District, $400,000; and the Kimball School District, $325,000. The Jones County School District in Murdo received $250,000 in bonding authority.
“This program allows schools to stretch their funds by saving them literally thousands of dollars they otherwise would pay in interest,” Gov. Mike Rounds said in a press release. “It eases the burden of financing-needed renovation projects.”
The QZAB is a financial tool districts can use for school renovations or repairs. It may not be used for new construction. South Dakota schools also may use QZAB proceeds to invest in equipment and technology, develop challenging curriculum and train quality teachers.
The Mitchell School District has used QZAB bonds in the past to pay for school improvements. The most recent QZAB-financed project was the installation, in July 2008, of a new boiler and cooling tower at L.B Williams Elementary for about $235,000, said Steve Culhane, the district’s business manager.
It was also recently announced that Mitchell received authorization for $2.5 million in Qualified School Construction Bonds. Part or all of that bonding authority may be used to replace the aging stadium at Joe Quintal Field. Sports stadiums are a permitted use with the construction bonds, but stadiums can’t be built using QZAB’s.
Under the QZAB program, the federal government provides bondholders with tax credits in lieu of interest payments. As a result, school districts are responsible only for repayment of the principal, but not interest. Schools must secure their own lenders. Schools must meet certain criteria in order to be eligible for the program. In particular, at least 35 percent of students must be eligible for free or reduced-price lunches under the National School Lunch Program.
South Dakota has nearly $5 million in QZAB authority for fiscal years 2007, 2008 and 2009. So far, the state Department of Education has received only $2.5 million in requests. The department will allocate the remaining authority on a firstcome, first-served basis. Allocation authority lasts for two years.
Other schools approved for QZAB bonding authority include: Meade School District, $500,000; Redfield School District, $500,000; and the Wilmot School District: $250,000.