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QZAB

QZAB. Kenmore-Town of Tonawanda UFSD Board of Education June 11, 2013. Q ualified Z one A cademy B onds. 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

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QZAB

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  1. QZAB Kenmore-Town of Tonawanda UFSD Board of Education June 11, 2013

  2. QualifiedZoneAcademyBonds

  3. 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

  4. District QZAB Allocation From the 2011 NYS Allocation: $ 2,000,000 From the 2012 NYS Allocation: $13,763,244 From the 2013 NYS Allocation: $24,219,000 Total Current Allocation: $39,982,244 Anticipated 2014 NYS Allocation: $ 9,017,756 Anticipated Total Allocation: $49,000,000 (The District will use this to finance the current $58.6 million multi-year project)

  5. QZAB Requirements • School 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

  6. Partners In Our QZAB School District Private Entity Match Partner Financing Bank Department of the Treasury

  7. QZAB Process: Match Partner • A+ Educators will be our match partner • Will provide resources and training for the implementation of the Common Core • Services provided over 9 years • Deeply discounted prices to the District • The difference between what we pay and the fair market value becomes the 10% match

  8. 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

  9. 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

  10. 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

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