School leaders to discuss new borrowing power
Carroll Community School District leaders on Monday will take their first steps toward using the broader money-borrowing power that voters approved last month.
The Carroll School Board will host at its regular meeting a public finance firm from Des Moines that helps Iowa cities and schools borrow money for projects.
Carroll voters in December approved a so-called revenue purpose statement that allows school leaders to use expected state sales-tax income as collateral when they issue general-obligation bonds to pay for the projects without asking voters to approve each project.
The district expects to get about $1 million per year from the 1-cent statewide tax that is used to pay for building and infrastructure improvements in schools. December's vote didn't change how much sales-tax money the district will receive, but it enabled district officials to spend the money before they receive it without voter approval.
The board can now bond up to 75 percent of its expected earnings until the tax expires in 2029. School officials estimate that they will collect a total of about $12 million.
The first project the district is expected to tackle under its new broader authority is an addition to the middle school. It's unclear what the project might cost, but it's planned to alleviate overcrowding at Fairview Elementary by moving an entire grade of students from Fairview to Adams Elementary and from Adams to the middle school.
A representative from PiperJaffray, a public finance firm from Des Moines, will update the school board on how to bond against future sales-tax revenue during the board's meeting Monday, according to the meeting's agenda.
According to an advance copy of the PiperJaffray presentation:
- Neither an election nor a public hearing is required for bonds to be issued payable from the tax.
- A 24-hour agenda notice, which is already a necessity because of Iowa open-meeting laws, is the only requirement to notify the public.
- Bondholders will bear a risk if the tax is insufficient. The district's debt service property-tax levy cannot be used to pay bonds.
- A reasonable timeline for the district to issue bonds is 75 days between the start of the process and bond closing.
The school board will meet at 6 p.m. Monday in the board conference room at Adams Elementary, and the meeting is open to the public.
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