Missouri lawmakers provide clarity on school bond issues

Capitol.mo.gov

Legislation recently passed in Missouri clarifies the rules to offer issuers more clarity on school bond election notification.

Some Missouri school bond measures had landed in limbo due to school districts' failure to hit the exact notification targets laid out in a statute governing public notice. So State Auditor Scott Fitzpatrick worked with lawmakers on two bills, SB 1094 and HB 2605, to address the problem during the recent legislative session, his office said.

Neither bill made it across the finish line in the session that ended Friday, but the language governing bond election notification was incorporated into other bills, primarily HB 1940, which passed both houses.

"The new language will align with existing law that provides a 30-day window to challenge the results of an election," Fitzpatrick said by email. "The change will provide certainty to bonding entities as it will be crystal clear that once the time to challenge an election has passed, an election notice issue will not prevent a bond from being registered."

Fitzpatrick said the existing law laid out "very specific windows of time" for election notices to be published, and some school districts were not complying with those requirements.

Some school district officials who spoke to The Bond Buyer last summer said the difficulties stemmed from changes in local newspaper ownership.

With control of the publication shifting from local workers to a national hub, Boone County Clerk Brianna Lennon said, "It's just been extremely difficult to get proofing done for publishing anything in the paper."

Facing concerns about mistakes and slower response times from the national hub, Lennon told The Bond Buyer she set the notification window in such a way as "to ensure that if the newspaper did make a mistake, then there would be a grace period." 

Local news is currently in the midst of a business model crisis, driven by the decline of classified and print advertising and the tech giants' control over the online advertising ecosystem. 

There were 4,490 newspapers published in the U.S. as of October, down from 7,325 in 2005, the Associated Press reported. Among the survivors, unique newspaper ownership was cut in half — to 1,900 in December, down from 3,995 in 2005 — amid a wave of consolidation.

Fitzpatrick said Tuesday, "The election notice laws were antiquated and needed to change, but I had to fulfill my duty to ensure all applicable laws were complied with before certifying a bond. 

"If Gov. [Mike] Kehoe signs the changes in HB 1940 into law, bond issues will have the same certainty provided to other ballot measures and elections as they cannot be challenged after the 30-day window is closed," he said.

State Sen. Sandy Crawford and State Rep. Peggy McGaugh played important roles in getting the legislative language across the finish line, Fitzpatrick said, thanking them and the "many other legislators who supported this legislative effort."

He also pointed to key stakeholders, like the local election authorities or school districts, the Missouri Press Association and bond counsel, "who all agreed this was an issue that needed to be addressed and then collaborated with us on the proposed fix that is now set to become law."

Crawford's office did not respond to emails and phone calls seeking comment.