River Springs School: County of Riverside
$1,298,000 tax exempt 501(c)(3) non-profit bonds and $402,000 Borrower funds for the facility rehabilitation and acquisition of computer, telecommunication, classroom, and arts/media equipment.
River Springs School requested CEDA’s help to issue a “Qualified Zone Academy Bond” (QZAB). Qualified Zone Academy Bonds were created by Congress in 1997 to help certain schools finance renovation and equipment purchase on an interest-free basis through the allocation of tax credits. The intent of Congress was to encourage schools and business to cooperate in innovative ways to prepare students with the kinds of skills employers need.
Public schools typically fund improvements through the issuance of tax-exempt public debt, which is repaid through principal and interest. In the Qualified Zone Academy program, schools serving low income students are allowed to issue debt by allowing the financial institution buying the bonds to forgive the interest component. The financial institution receives a tax credit instead. This provides an incentive to financial institutions and a huge savings to the schools. A qualified school is one that is located in a federally-approved Empowerment Zone or Enterprise Community or has at least 35% of its students eligible for free or reduced price school lunches. In addition a qualified school is required to develop a partnership with business to create a plan improving student education; and private entities must make a contribution of at least 10% of the money borrowed through the bonds. River Springs is sponsored by the Riverside County Office of Education and received renewed WASC accreditation in the spring of 2007.