A yeshiva is supposed to be primarily in the business of teaching Torah and Talmud. It generally is not the first place one might think of as being a pioneer in finance.
But a combination of circumstances has led the Wisconsin Institute for Torah Study to become such a pioneer in the state. Indeed, according to Rabbi Raphael Wachsman, one of the school’s deans, it may even serve as a model for institutions of its type around the country.
As of April, WITS became the first private high school in Wisconsin to issue federal tax-exempt bonds through the Wisconsin Health and Educational Facilities Authority.
This bond issue is for $3.315 million – “at variable interest rates with an overall initial true interest cost of 2.67 percent,” according to a release from WHEFA.
Wachsman said it will go toward refinancing the debt the school incurred primarily from the legal challenges that were brought against it prior to its remodeling and the construction of its recent addition; and it will help the school finish parts of the current construction.
It also will enable the school to “spread the debt payments over 25 years,” according to Donald Grande, WITS treasurer and senior vice president of Ziegler Investments, the firm that is the underwriter for the bonds.
The idea of using tax-exempt bonds to finance educational or health-care institutions is not new. WHEFA, which was created by the state legislature in 1973, has been assisting this kind of thing for decades, according to its Web site ( www.whefa.com ).
But WHEFA has only worked with health-care institutions and private colleges and universities until now. At the end of 2003 and the beginning of 2004, the state legislature expanded WHEFA’s charter to allow it to issue bonds “for the benefit of private, non-profit elementary or secondary educational institutions,” according to WHEFA’s Web site.
WITS was in a good position to be the first such educational institution to take advantage of this change. For one, it had Grande, who was both well aware of the school’s financial situation — he is a former president of WITS and “I used to be the one who had to meet with the bank all the time” — and as a financial professional knew about the changes at WHEFA.
So Grande spoke about this to Ziegler’s department of church and school financing. The people in that department “became extremely interested because of the character and financial situation” of the school, Grande said.
Moreover, he added, “the Ziegler people spent a great deal of time at WITS to learn about it and its financial situation and to make sure it is qualified under the law,” which requires that the school’s “secular program be extremely strong because these bonds couldn’t be issued on a religious basis.”
Grande emphasized that to be eligible, schools have to have “a significant secular program.
Moreover, according to the WHEFA Web site, “No state or other public funds are used” to buy the bonds, and the bonds “are payable solely out of loan repayments from the borrowing institution or sponsor. They are not a debt, liability or ‘moral’ obligation of the State of Wisconsin or any of its political subdivisions.”
Wachsman said that WITS is not only pioneering for Wisconsin in this matter, but it may also be one of, if not the, first yeshiva-type school to use this kind of financing.
Moreover, Wachsman added, this project is one more reason why the school honored Grande and his wife, Barbara, at the school’s anniversary and graduation celebration this week, for not only all the other work he’s done for WITS, but also for being “the mover and shaker to bring the Ziegler group with us.”
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