Hannibal School Board tables bond issue until 1 p.m. Thursday

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Larry Hart, CEO of L.J. Hart Company, talks to the Hannibal Public School Board. Megan Duncan

HANNIBAL, Mo. — The Hannibal Public School Board is in a race with the clock to decide whether they will approve a bond issue that would save the district approximately $3.65 million.

A proposal to refinance a 2019 $14.5 million bond at a lower interest rate was presented by L.J. Hart and Company last week during a capital project work session. 

At the regular board meeting on Wednesday, representatives of L.J. Hart, a company from St. Charles, Mo., encouraged board members to approve the proposal that night to lock in the interest rate.

Jeff Evans, board member, told the representatives from L.J. Hart when they stood at the podium to present their proposal that the bond issue had been tabled at the capital project work session until they consulted with a financial advisor. 

Evans was not concerned by the deadline and mentioned that the push to approve the proposal was likely a sales tactic from L.J. Hart.

Scott Hawes, board member, agreed with Evans. He believes an independent financial advisor should be sought because L.J. Hart is the underwriter for the bond issue.

“If we don’t, the district is relying on the sales people to set the terms for everything,” he said. “If they are the best ones for the job then we should go ahead and move forward with that. But if there are things that aren’t being looked at in our best interest, we need an independent person to be able to advise us in that way.”

Blane Mundle, president of the school board, mentioned that the company was praised as a helpful resource to the district by former Hannibal School Board Vice President Brad Kurz.

But Mundle also said he “didn’t disagree” with Hawes and Evans on seeking a financial advisor.

Stacy Graves, board member, encouraged the board to move forward now and suggested the financial advisor to work with L.J. Hart in the meantime. 

“I think we should look to in the interest of our taxpayers, our people, and the integrity and trust of us on the board. We need to look at the big picture,” she said. “I think their suggestion was great.”

J’Nelle Lee, vice president of the board, is also a realtor and managing broker at Hannibal Realty. Lee said she believes L.J. Hart has already proven themselves as trustworthy.

“I agree with Stacy and I think as a district and as professionals—like many of us are—we work to establish relationships with clients and companies. That’s everyone’s goal as a business owner and L.J. Hart has done that,” she said. “So I’m not sure why all of the sudden we need to question it.”

“It’s about accountability,” Hawes responded.

Susan Johnson, superintendent of the Hannibal Public School District, shared earlier in the meeting that L.J. Hart was a company she began working with as a new superintendent at the recommendation of other school districts.

“This past spring when—as we all know—we had a vacancy in the business office, I can’t tell you how helpful they were at that time,” Johnson said. 

She spoke of a time when the company helped the school with IRS papers that weren’t filed on time due to the vacancy, and saved the district more than $600,000.

The board members agreed after a lengthy discussion to table the issue to consult a financial advisor, who will not charge a fee, with a short deadline. If the financial advisor affirms the plan, they will hold a special session Thursday at 1 p.m. to vote.

Johnson said she is proud of the board for taking the time to discuss their thoughts and carefully consider the issue.

“They want us to talk to some financial advisors, just to ensure that it is in the best interest of the district,” she said. 

“If we can lock in at a lower interest rate that will be a money savings. So with the proposal that was presented by L.J. Hart it would be a savings of $3.65 million, which is a lot of money,” she said. “But I think they are wanting a financial advisor to look at it from a fiduciary perspective to have the best interest of the district.”

If the financial advisor chosen by the board is not able to review the proposal, the board voted to consult another financial advisor who will have one month to review due to the upcoming holidays.

Johnson said in that case there is no guarantee the same rates will be available, and it would likely be a different amount.

“It could be better or could be worse just depending on the market at that time,” she said. “The complicated part of this is that it was already in motion. It’s timely because the market changes from day to day. So what we could lock in bow isn’t necessarily going to stay the same.” 

Johnson explained she believes those at L.J. Hart have the best interest of the school district at heart, but a 2014 law prevents the company from being able to serve them as both an underwriter and financial advisor.

“We have a quality school district and we couldn’t have a quality school district if we didn’t have patrons and local taxpayer dollars to help us implement quality education. So I think (the board members) want to make sure we are making the best financial decisions…the more money we can save, the more can be used to educate our kids versus having to pay for bonds,” Johnson said.

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