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Pittsburg Commission approves up to $6 million industrial revenue bonds for Washington School Project
Summary
On Nov. 12 the Pittsburg City Commission approved Ordinance S 11 12 to authorize taxable industrial revenue bonds (Series 2025) not to exceed $6,000,000 for the Washington School Project; bond counsel said the city is a conduit issuer and the Washington School, not the city, is responsible for debt service; the tax abatement runs 10 years and takes effect in 2026.
The Pittsburg City Commission on Nov. 12 approved Ordinance S 11 12 authorizing the city to issue taxable industrial revenue bonds (Series 2025) in an aggregate principal amount not to exceed $6,000,000 to finance the Washington School Project.
JT Klaus, bond counsel with Spencer Fane, told the commission the financing is a conduit, ‘‘special revenue bond’’ under which the Washington School will site‑lease the property to the city and then lease the improved property back. ‘‘The city is not obligated to pay it,’’ Klaus said, adding that if the issuer defaults the Washington School — not the city — would be responsible for principal and interest. Klaus also said the ordinance packet was amended to remove a previously referenced payment‑in‑lieu‑of‑tax provision.
Klaus said the project received an earlier round of approvals, including a property‑tax abatement approved after a March 14, 2023 hearing and cost‑benefit analysis. He told commissioners the tax abatement in this package is a 100% abatement for a 10‑year period, but that certain school‑district levies (for example capital outlay) remain non‑abatable under state law. The bond counsel said the abatement period effectively begins the year after the bonds are issued, with tax relief starting in 2026.
A commissioner moved to approve the ordinance and the motion carried. The mayor announced the motion carries and the ordinance was approved as presented.
Next steps outlined by counsel were ministerial: issuance of the bonds to close out the financing steps already approved by the city in prior meetings. Klaus said the only additional formal city action likely in the future would be routine consent items related to bond payoff or lease termination at the end of the term.
