qzab kenmore-town of tonawanda ufsd board of education june 11, 2013
TRANSCRIPT
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QZAB
Kenmore-Town of Tonawanda UFSD
Board of Education
June 11, 2013
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QualifiedZoneAcademyBonds
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What Is a QZAB?
A Federal program that offers very low (possibly no) interest rate bonds or obligations for financing qualifying capital projects in qualifying school districts
Federal allocations are given to individual states for distribution
The New York State allocation is coordinated by the Office of Facilities Planning
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District QZAB Allocation
From the 2011 NYS Allocation: $ 2,000,000From the 2012 NYS Allocation: $13,763,244From the 2013 NYS Allocation: $24,219,000Total Current Allocation: $39,982,244
Anticipated 2014 NYS Allocation: $ 9,017,756Anticipated Total Allocation: $49,000,000
(The District will use this to finance the current $58.6 million multi-year project)
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QZAB RequirementsSchool District must have a free and reduced
lunch percentage ≥35%School District must have a private entity willing
to contribute 10% of the QZAB amount to the District in cash or in-kind services
School District must use the funds on a capital project for renovations (not new construction)
A bank must be willing to issue the obligations and take tax credits from the Federal Government in lieu of normal interest payments
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Partners In Our QZAB
School District
Department of the Treasury
Financing BankPrivate Entity Match Partner
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QZAB Process: Match Partner
A+ Educators will be our match partnerWill provide resources and training for the
implementation of the Common CoreServices provided over 9 yearsDeeply discounted prices to the DistrictThe difference between what we pay and the
fair market value becomes the 10% match
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QZAB Process: Financing Bank
Bank of America will be our financing bank for this portion of the QZAB
Will provide $36 million of the financing at this time
Receives tax credits from the Federal government in lieu of the majority of interest
The District pays back the principal and 0.5% supplemental interest over 15 years
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District Savings for Current Allocation
Interest on a traditional bond: $10,139,781 ($39,982,244, 15 years, 3.05%)
QZAB Costs:
Interest at supplemental rate: $ 1,568,008
($39,982,244, 15 years, 0.50%)
Payments to match partner: $ 877,800
Total Cost: $ 2,445,808
Net Savings over 15 years: $ 7,963,973
Average Savings Per Year: $ 512,932
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Requested BOE Action
Approve the QZAB plan: “Recommended Deliverables Proposal” from A+ Educators
Approve Professional Services Agreement with A+ Educators
Approve financing resolution from our bond attorney