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|OPSB considers no-interest stimulus loan|
The Ouachita Parish School Board wants to ready itself to borrow up to $10 million at zero interest through the federal stimulus package.
Money borrowed from the government at no interest must be used for shovel-ready construction projects.
The school board adopted a resolution Tuesday during its regular meeting to grant preliminary approval to borrow the funding.
However, Ouachita Parish Schools Superintendent Dr. Bob Webber said the resolution does not mean the school board will borrow money through the federal program.
"We have nothing to lose on this," Webber said.
He said preliminary indications from the start of school show Ouachita Parish Schools could have up to 600 new students enrolled this school year.
"So, we could be running into a little crowding problem in some of our schools," Webber said.
If the school system must renovate schools and add classroom space for the increased student population, federal stimulus money would be available for that purpose.
"We don't want to borrow it just for the sake of borrowing it, but it's certainly a good deal," Webber said.
Grant Schleuter, of the law firm Foley and Judell of New Orleans, is the parish school system's bond attorney.
He told the school board that to participate in the federal program, the school board would need to identify shovel-ready projects by Nov. 3. The money can be used for capital improvement projects only, such as construction, renovations and major repairs.
The money also would have to be paid back, so the school board would have to identify a revenue source.
Also, the school board would have to locate a bank that is willing to participate in the federal program and loan the money at zero interest. Banks that participate in the stimulus program with schools are given federal tax credits for loaning the money to school districts.
"Under the stimulus bill there's a program for qualified school construction bonds for school districts nationwide that would permit, assuming there is a willing purchaser, the sale of bonds for capital improvement projects at zero percent," Schleuter said. "You have to have an allocation from either the federal government or the (state) Department of Education in order to have the potential to utilize this money."
"You have to pay it back, but you borrow without interest if you can find a purchaser willing to lend you the money," Schleuter said. "Even though its advantageous terms, you will need a revenue stream to pay it back."
Two school districts in Louisiana have already accessed the federal money. They are the Caddo Parish and Jefferson Parish school systems.
He said the federal program is a two-year program. Another allocation process will occur next year.
If the Ouachita Parish School Board solicits the funding, it would first need approval from the state Bond Commission.
In other action, the school board accepted the low bid of Don Barron Contractor Inc. of Farmerville for the construction of a new Richwood middle school.
Out of the five bids submitted for the project, the lowest bid was $12.27 million.
The school board had estimated the project could cost roughly $13 million.