DALLAS — A nonprofit public charter school will sell revenue bonds in April for new facilities through a conduit issuer approved Wednesday by the Dallas City Council.
Uplift Education plans to issue between $70 million and $90 million of bonds for projects through the newly created North Texas Education Finance Corp. in a negotiated sale on April 19, said Bill Mays, Uplift’s chief financial officer.
“The amount we issue this year will depend on what the market will bear,” Mays said. About $36 million of the proceeds are earmarked for Dallas projects, he added.
The sale will include $15 million of tax-exempt qualified school construction bonds. “We have five different allocations of the QSCBs totaling $26 million, with $15 million for projects in the city of Dallas,” Mays said.
The ordinance adopted Wednesday requires council approval for all bonds issued through the corporation.
Uplift may use the new issuer for future sales. “We could use it again,” Mays said. “We’ve had five bond sales, each of them through a different issuer.”
The $25 million of outstanding revenue bonds issued by the Beasley Higher Education Finance Corp. and the Texas Public Finance Authority Charter School Finance Corp. for Uplift is rated Baa3 by Moody’s Investors Service. Uplift also has $69.8 million of unrated parity debt.
Robert W. Baird & Co. is the underwriter for the April issue. The bonds are backed by Uplift’s gross revenues, including donations and a per-student state stipend. The school does not charge tuition.
Uplift’s most recent bond sale was $56.8 million in 2010 through the Clifton Higher Education Finance Corp. The council weighed creation of the conduit issuer earlier this month, but several members asked for a two-week delay.
Councilwoman Angela Hunt said her questions had been answered. “I wanted to know how this would affect Dallas’ bond rating and how it would affect us financially,” she said. “It is very clear to me there are no financial repercussions.”
Uplift CEO Yasmin Bhatia said the school would reduce its debt service by $300,000 a year with the QSCBs instead of taxable debt. She said that would mean more money for Uplift’s 350 teachers.
“Uplift intends to use 100% of the savings from these lower interest rate bonds to give our teachers a pay raise for the 2012-13 school year,” she said at Wednesday’s council session.
Councilman Jerry Allen said the lower debt service would benefit the Dallas economy and keep Texas money in Texas.
“This will save $300,000 of Texas taxpayer money,” Allen said. “Would you rather send that money to Wall Street investors, or let it stay in Dallas, Texas? It’s a very simple decision.”q
Proceeds will be used to complete construction projects now under way and to build one new school in Dallas and two in Fort Worth. Uplift operates 20 charter schools in north Texas, including 13 in Dallas.
