Bogalusa School Board

Bogalusa, Louisiana

Special Board Meeting

October 3, 2011

5:30P.M.

 

 

Proceedings Of The Bogalusa School Board Taken At A Special Board Meeting That Was Held On Monday, October 3, 2011

 

The Bogalusa School Board met in a special session at the Bogalusa School Board Office, in the Media Center, located at 1705 Sullivan Drive, Bogalusa, Louisiana on Monday, October 3, 2011, beginning at 5:30P.M. The sole purpose of the meeting was to address the QSCB Loan. The agenda included presentations regarding the QSCB Loan action

 

1.)        Call to Order

President Paul Kates called the meeting to order at 5:34P.M.

 

2.)        Pledge of Allegiance

Superintendent Louise Smith led the Pledge of Allegiance.

 

3.)        Prayer

Reverend Raymond Mims delivered the opening prayer.

 

4.)        Roll Call

There were present:  President Mr. Paul Kates; Vice President Mr. Adam Kemp; Members:  Mr. Curtis Creel, Mrs. Eleanor Duke, Mr. Calvin Hymel, Reverend Raymond Mims and Dr. Brad Williams

 

There was absent:  None

 

5.         Presentations

 

Mr. Offner stated that he was here about a year ago regarding the ten million ($10,000,000) dollar QSCB loan.  He proceeded to give insight to the QSCB Loan process at hand for six million ($6,000,000) dollars.  He noted that the State Department of Education has given the district five (5) renewals for the right to go ahead and issue that.   He stated that the commitment to the bond has to be signed by November 1, 2011.  Mr. Offner gave different ways in order to acquire this loan.  One way was through tax credit. The district would pay the bank the full interest; and the federal government would reimburse the district up to what is called a credit amount.  He went on to say that Mrs. Walker asked if there were other options.  Mr. Offner stated that another option was a Conventional Limited Tax Revenue Bond sale.  ”Regions Bank is going to make an offer.  Regions Bank has a few requirements that I think the Superintendent and Director of Finance have been discussing with me.  If you don’t have any questions for me, Regions will go over what their requirements are,” concluded Mr. Offner.

 

Mr. Meador came forward stating, ”Good afternoon my name is Alan Meador.  I am with Regions Bank in New Orleans.  He went on to introduce Judy Wilson of New Orleans and Scott Howard also with Regions Bank of New Orleans.   Next, he gave some insight on how to proceed with the matter at hand.  He stated the QSCB Loan is a seventeen (17) year fixed rate loan.  ”When I got the approval for that, we asked that the banking business for the school Board be moved to Regions; and per discussion with Deloris, we recognized some issues she brought up; and primarily that is the daily cash transactions that take place between the schools and the local bank.  So, I think kind of like a counter proposal we said ’Well our intention is not to make life more difficult; but we kind of need to have some business with  the School Board to kind of make the seventeen (17) year fixed rate loan something we can kind of get over the hurdle to do. So, we said why we don’t just leave the school accounts with the local bank here in Bogalusa.  I think kind of what we would like to propose is that the primary operating accounts which may also be known as the General Fund; the Payroll Account; the Sales Tax Account and the Investment Account be moved to Regions.  We think we can bring something worthwhile to the School Board and the School System,” says Mr. Meador.

 

Ms. Judy Wilson, then addressed the Board stating, ”One thing I can assure you of is as we transition, the relation from your current bank to us; the biggest headache is the transition; getting from one platform to the new platform.  I always make myself available.  Thank you.   I am going to turn it over to Scott Howard,” says Ms. Wilson.

 

Mr. Scott Howard, stated ”Really there is almost nothing that I can say that hadn’t already been said.   So, I am going to avoid the temptation to add; maybe just say that we are interested in a full relationship.  We do not want to just be your lender.  We’re trying to provide you with a full range of services.” When the question of where the nearest Regions Bank was located, the response from Mr. Howard was, ’Covington.’ Reverend Mims voiced a concern regarding the transactions between Bogalusa City School District and Regions Bank.  Mrs. Wilson stated that all of the transaction would be done electronically, and you would have until 8:00P.M., that evening to make deposits and the deposit would be effective the same day.

 

The in-depth discussion continued with outlining the procedures if the district decides to go with Regions Bank.  ”I would like to make one final comment, I forgot to make earlier; that is if we’re fortunate enough to have you make a decision to proceed  with us; the requirement of the accounts being at our bank will not be made a part of my commitment letter.  I really can’t put that in there because the IRS ties the commitment to the interest rate so that; what we will do is; we operate on an honor system.  If you tell us you’re going to move them; possibility in the form of a letter; then we’ll move forward.  It kind of has to be a general agreement that’s what we’re going to do.  So you will not see the requirements of the account any place in the letter.  I just wanted to tell you all that,” says Mr. Howard.

 

Question from Vice President Kemp-”Okay, say that the Board chooses not to go with Regions Bank in general; would that affect the commitment to the six million ($6,000,000); the handling of the six million ($6,000,000).  Would it have any affect on the six million ($6,000,000) being granted, in loan financing?”

 

Response from Mr. Scott Howard-”We made the original commitment with the understanding that we would be moving ahead with full relationship.”

 

A voiced concern regarding a conversation about the loan and it procedures arose as to the information made available. Mr. Alan Offner of Foley and Judell stated that the conversation was between Mrs. Walker and the Superintendent, not with the Board.  ”I wanted you to understand that we weren’t changing our point of view at the last minute,” says Mr. Howard. 

 

Statement from Vice President Kemp- ”My concern quickly; we were approached with the loan information the six million ($6,000,000); the QSCB information but there were no guidelines; no directives given to us at that time; so this is all new to us as far as what requirements there were, and so forth.  My other question was, have we looked locally,” asked Vice President Kemp?  

 

Response from Mrs. Walker-”The First did respond and say that they were not able to get the loan; I think Capitol One.”

 

Statement from Mr. Offner-”When this first came out, some time ago; this is the second time.  When this program first came out over a year ago; we immediately contacted; we went to Whitney who was your fiscal agent; and Whitney said that they were not interested; but you know Whitney was getting to merge with Hancock; so we went to Hancock who has some offices in Franklinton; but Hancock said the they bought these type of bonds a couple of year ago and weren’t interested now.  After a while the local banks backed off; all the local banks backed off.  That just left the bigger banks; and the only banks I know that are doing these right now are the bigger banks like Regions and Capitol One.  So, Regions said yes; Capitol One said no.  For the local banks; the bank out of Hattiesburg, Mississippi; we got an email back today and said that they were not interested; and I have contacted the other banks and they haven’t responded back….Citizens,” says Mr. Offner.  Resource Bank was also asked about.  Mr. Offner continued, ”If you all decide to go forward with this, we will definitely have to do something about it during the October 24th meeting.  It was decided that we could have a Special Meeting to address this matter.  It was brought to the attention that the deadline was November 1st.  Mr. Offner stated that he would like to let the state know by October 31st.

 

Statement from President Kates-”I know this is a lot for everyone to sink in at this table because it’s just been brought to us.  I think the program that they are presenting is a very good program.  It sounds like it is very solid; but me number one, as President I was the first one said that I would prefer a local bank because this community supplies all the tax funding that supports the system; and I wouldn’t want the community to think that we are running out on them with the money that they pay to operate this system.  I think we need a little time; and I think we could make this decision by; at our Regular School Board Meeting; but I think we all need a little time to think about this.  We don’t just want to jump into it; or do it tonight and vote on this where as the community think we are bailing out on our community and choosing a bank from out of town.  I think our citizens need to know that all of our local bank entities refused us and did not want to bite off of this six million ($6,000,000) bond issue.”

 

Question from Reverend Mims-”The only think I was asking of Regions is that the offer, would you give us time to think this over and would that same offer stay on the table until we have our meeting; what you all are offering?  That is the question I’m asking.  The response was ”Absolutely.” 

 

Question from Attorney Dale Branch-”I am the Boards’ I guess you can say general-local lawyer; and I’m assigned here by the District Attorney’s Office.  What about the fiscal agency part of it?  If they move their accounts to Regions, do you do a Fiscal Agency Contract, in accordance with the state law and that sort of thing; you’ve obviously done this before in the state of Louisiana.” 

 

The response was, ” I can tell you what happened at numerous other school systems is that, if they come to their local fiscal agent bank and they decline the loan, typically what happens is the School Board kind of becomes insensitive; just enraged by it and they move  their account; they just move them over.” Attorney Branch asked, ”But do you do a regular Fiscal Agency Contract?”  The response was, ”We do not put it out for bid at that time.”  A question was asked whether we were under contract now; and Mrs. Walker replied, ”It’s expired.” Attorney Branch added, ”The thing about depositing public money in the bank is that you have to secure our accounts; you would do that?  The reply was, ”Yes.”  ”And you still think we could do our local business here,” asked Attorney Branch?   Mrs. Walker replied, ”Yes that’s what they were saying that we probably could leave school funds at The First and Food Service, because Food Service makes deposits daily, because of the kids turning in lunch money.” ”I’m not that interested in the technicality of doing it all.  I just want to make sure we have some sort of contract enforced if you take the deposits; because it’s a good bit of money,” says Attorney Branch.  Mrs. Walker added that the district would have to look at the interest rate they are going to pay because we’re under the same old contract we had with Parish National Bank, moved to Whitney, that’s now with The First.  ”It is a lot of things I have to look into with Mr. Dale help; and the other attorneys to make sure that if we do this we’re covered  in every area,” says Mrs. Walker.

 

At the close of the in-depth discussion President Kates stated, ”The Superintendent or either Mrs. Walker will get back with you all.  Thank you all.”

 

6.)        Recess to Public Session  

There was no one to come forward at this time.

 

At this point there was a slight discussion regarding the banks that had been contacted; and a request to give Resource Bank a call.  Mr. Offner stated, ”What I just told them is just because of the time element; unless these other two (2) banks come back and say they’re willing  do it for a better rate or equal rate, we are going to proceed on the basis…..(Pausing and not completing this statement).  In order to meet the time limit I have to go ahead and prepare the bond resolution, which is about twenty (20) pages long; I can get it to their attorney so he can look at it. So, if you do decide to go with Regions we’ve got documents or Resolutions that you all can adopt; and you all can sign the amendment at the meeting.”   Vice President Kemp stated that his main goal was to make sure we did everything that we could to keep it local.  Mrs. Walker stated that she would call the other banks.  ”We’ve got to keep in mind that this is a loan and not a grant.  This has to be paid back,” says Dr. Williams.  Mr. Offner sated that we must have fifteen percent (15%) obligated money not spent.  He then talked about the ”Wish List.”  Superintendent Smith stated that there was a facilities meeting set for October 13th.  The consolidation of schools was mentioned by Superintendent Smith to help pay the loan back.

 

President Kates continued with the agenda.

 

7.)        New Business

 

A.)        Consider and take action on the Qualified School Construction Bond (QSCB) Loan according to the requirements set forth by Regions Bank, for the purchase of the six million ($6,000,000) dollars in Qualified School Construction Bonds.

It was motioned by Vice President Kemp, seconded by Reverend Mims to table this line item. The motion was carried unanimously.

 

*Any other matters that may come before the Board.

 

8.)        Superintendent Comments-Louise Smith

Superintendent Smith focused the Boards attention on the items in their folders:  First Annual Special Ed Workshop-November 3, 2011; NSBA Conference in Boston-April 21-23-2011.  Also, a consideration to hold the next seven (7) Board Meetings in different School sites starting in November.  The first Facilities Meeting will be held in Bogalusa High School library on Thursday, October 13, 2011 at 5:00P.M.  In the folder also, was a Newsletter from the Chamber.

 

9.)    Board Members Comments

 

Mrs. Eleanor Duke-”I think we’ve got new computers; and I am very proud of that.”

 

Vice President Kemp-”Our intention with every bit of that six million ($6,000,000) is to improve students achievement; ultimately that’s the goal.  Also, that the NSBA Conference, the three of us that went last year; it was well worth its money.  We came back with a lot of new ideas.”

 

Mr. Curtis Creel-”Having been married to a school teacher for a long period of time and dealing with her classroom environment, she always made a real strong effort to provide an environment  that  was conducive to a good education; and I think as a Board that’s what we’re here for.  I think this money is an important tool for us to move forward.  We just have to take what we have and manage it the best way that we can.”   

 

Reverend Raymond Mims-”Our focus is on the schools; but another focus that we also have is to be sure that we are taking a look at getting these test scores up.  We have got to make sure; because if we don’t get these test scores up there’s not going to be no school.  We’ve got to make sure that we are concentrating on getting these test scores up.  That’s the biggest importance.  Let’s not loose focus on that, please.”

 

At this point President Kates if there were any more comments.  There were none; and he adjourned the meeting.

 

10.)       Adjournment

There being no further business to address; or comments, President Kates adjourned at 6:45P.M.

 

___________________________________                              ____________________________________

Louise Smith                                                                                         Paul D. Kates

Secretary to the Board                                                                        Board President