Ross Sinclaire to Add Indiana School Superintendent Reed in Indianapolis

CHICAGO - In an effort to capitalize on recent changes in Indiana's school financing law, Ohio-based broker-dealer Ross, Sinclaire & Associates LLC will hire the state's longtime school superintendent as a financial adviser in its Indianapolis office.

Sue Ellen Reed will join the firm as vice president of business development in January after the end of her fourth term as state superintendent of public education, an elected position that she has held longer than any of her predecessors.

Ross, Sinclaire & Associates hopes to expand its Indiana business in light of a new law that requires all major school bond proposals go before voters in a referendum. The new state law is part of a massive revamping of Indiana's property tax law enacted this year under the direction of Republican Gov. Mitch Daniels. The law also requires voter approval of all major local government bond issues.

"Our degree of expertise in that area will uniquely set us apart from some of our peers," said Brian Nurick, managing director of the firm's public finance department. Referring to the new referendum law, Nurick said: "In our South Carolina market there's a referendum environment and over the last three to four years we've assisted school districts in over $1 billion [in bonding issues]."

Founded in 1989, Ross Sinclaire operates nine offices across eight states with a total of 70 employees including some 20 public finance employees. The firm acts as broker-dealer typically as part of a syndicate team on competitively-bid deals. As financial adviser it has ranked number one in Kentucky for the past three years and in the top five in South Carolina, according to Thomson Reuters.

"We have very carefully navigated ourselves through the turmoil of the financial markets over last couple years and our company is looking to expand," Nurick said. "In Indiana we saw an enormous opportunity to hire someone with Reed's extensive network and her credibility, and we thought it was a unique opportunity to collectively address a lot of the issues facing school districts in Indiana."

Reed will come to the position after having served as a Republican state school superintendent for 16 years and having spent nearly all of her career in public education in Indiana. She was the first female state school superintendent and the longest-serving.

Her move to Ross Sinclaire comes as Indiana schools face a new set of borrowing challenges. As state officials hammered out final legislation over the last eight months, local school officials warned it could have dire consequences for school financing, particularly in urban school districts.

Under the new law, a referendum is required for all high school projects estimated to cost more than $20 million, or on elementary and middle school projects estimated to cost more than $10 million. Voter approval will also be required on government capital projects that cost more than $12 million, or more than 1% of the unit's total assessed value. The new law includes a 20-year cap on final maturities and a requirement that debt service include regular and level principal and interest payments over the life of the bonds.

The center of Indiana's new law is a series of property tax caps that limit a homeowner's tax bill at no more than 1.5% of the assessed value of the house through 2009 and at 1% after 2010, rental property bills at 2% after 2010, and commercial bills at 3% after 2010.

To offset the expected loss of $1 billion in annual revenue, the state raised its sales tax to 7% from 6% July 1, and imposed a casino licensing fee. The state also agreed to take over schools' general and transportation funds, leaving schools responsible for current and future debt payments.

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