Revenues of the school district shall be received by the board treasurer.  Other persons receiving revenues on behalf of the school district shall promptly place them in the hands of the board treasurer.

Revenue, from whatever source, shall be accounted for and classified under the official accounting system of the school district.  It shall be the responsibility of the board treasurer to deposit all revenues in the approved depository for the school district in a timely manner.

Tuition fees received by the school district shall be deposited in the general fund.  The tuition fee for pre-kindergarten (PreK) through sixth (6) grade during the regular academic school year shall be set by the board, based on the superintendent’s recommendation.  Tuition fees for summer school and adult education shall be set by the board prior to offering of the programs.

The board may charge students fees for the use, purchase, misuse or destruction of educational materials.  Materials fees received by the school district shall be deposited in the general fund.  It shall be the responsibility of the superintendent to recommend when fees will be charged and the amount of the fees for educational materials to students.

Rental fees received by the school district for the rental of school district equipment or facilities shall be deposited in the general fund.  It shall be the responsibility of the superintendent to recommend to the board a fee schedule for renting school district property. 

Proceeds from the sale of real property shall be placed in the schoolhouse fund, and the proceeds from the sale of other school district property shall be placed in the general fund.

The board may claim exemption from the application of state law prohibiting competition with private enterprise for the following activities:

*Goods/services directly and reasonably related to the educational mission;

*Goods/services offered only to students, employees or guests which cannot be provided by private enterprise at the same or lower cost;

*Use of vehicles for charter trips offered to the public, full or part time, or temporary students;

*Goods/services which are not otherwise available in the quantity or quality required by the school;

*Telecommunications other than radio or television stations;

*Sponsoring or providing facilities for fitness and recreation; food service and sales;

*Sale of books, records, tapes, software, educational equipment and supplies.

It shall be the responsibility of the superintendent to bring to the board’s attention additional sources of revenue for the school district.

 

 

Legal Reference:  Iowa Code §§23A, 279.8, 282.2, .6, .24, 291.12, .13, 297.9-.12, .22, 301.2, 442.4, 453 (1991)
                                      1940 Op. Att’y Gen. 232
                                      1940 Op. Att’y Gen. 196

Cross Reference:  801.2    Depository of Funds
                                       801.3    Classification of Accounts
                                       903        Selling and Leasing
                                      1006      Use of School District Facilities and Equipment

Approved:  4-23-92                            
Reviewed:  1-08-24              
Revised:  1-9-12

 

DEBT LIMITS

Credit Ratings

The school district seeks to maintain the highest possible credit ratings for all categories of short- and long-term debt that can be achieved without compromising the delivery of services and the achievement of adopted objectives.  The school district recognizes that external economic, natural, or other events may from time to time affect the creditworthiness of its debt. Nevertheless, the school district is committed to ensuring that actions within their control are prudent.

Debt Limits
For general obligation debt, the school district’s outstanding debt limit shall be no more than five percent (5%) of the actual value of property within the school district’s boundaries, as prescribed the Iowa constitution and statutory restrictions.

For revenue debt, the school district’s goal is to provide adequate debt service coverage of at least 1.20 times the annual debt service costs.

In accordance with Iowa law, the school district may not act as a conduit issuer or issue municipal securities to raise capital for revenue-generating projects where the funds generated are used by a third party (“conduit borrower”) to make payments to investors.

PURPOSES AND USES OF DEBT 
Capital Planning
To enhance creditworthiness and prudent financial management, the school district is committed to systematic capital planning, intergovernmental cooperation and coordination and long-term financial planning.

Capital Financing
The school district may issue long-term debt for capital projects as authorized by Iowa law, which include, but are not limited to, the costs of planning, design, land acquisition, buildings, permanent structures, attached fixtures or equipment, and movable pieces of equipment. Capitalized interest may be included in sizing any capital project debt issue.  The types of debt instruments to be used by the school district include:

• General Obligation Bonds
• General Obligation Capital Loan Notes
• Bond Anticipation Notes
• Revenue Anticipation Notes
• School Infrastructure Sales, Services and Use Tax Revenue Bonds
• Lease Purchase Agreements, including Certificates of Participation

Working Capital Financing
The school district may issue debt for working capital for operations after cash flow analysis has determined that there is a mismatch between available cash and cash outflows.  The school district shall strive to repay working capital debt by the end of the fiscal year in which the debt was incurred.  A Working Capital Reserve may be included in sizing any working capital debt issue.

Refundings
Periodic reviews of all outstanding debt will be undertaken to determine if refunding opportunities exist. Refunding will be considered (within federal tax law restraints) if and when there is a net economic benefit of the refunding or if the refunding is otherwise in the best interests of the school district, such as to release restrictive bond covenants which affect the operations and management of the school district.

In general, advance refundings for economic savings will be undertaken when a net present value savings exceeds three percent of the refunded debt can be achieved.  Current refundings, which produce a new present value savings of less than three percent will be considered on a case by case basis taking into consideration bond covenants and general conditions.  Refundings with negative savings will not be considered unless there is a compelling public policy objective for doing so.

DEBT STANDARDS AND STRUCTURE

Length of Debt
Debt will be structured for the shortest period consistent with a fair allocation of costs to current and future beneficiaries or users.  Long-term debt will not be issued for periods exceeding the useful life or average useful lives of the project or projects to be financed.  All debt issued will adhere to state and federal law regarding the length of time the debt may be outstanding.

Debt Structure
Debt will be structured to achieve the lowest possible net cost to the school district given market conditions, the urgency of the capital project, the type of debt being issued, and the nature and type of repayment source.  To the extent possible, the school district will design the repayment of its overall debt to rapidly recapture its credit capacity for future use.

Generally, the school district will only issue fixed-rate debt.  In very limited circumstances, the school district may issue variable rate debt, consistent with the limitations of Iowa law and upon a finding of the board that the use of fixed rate debt is not in the best interest of the school district and a statement of the reasons for the use of variable rate debt.

All debt may be structured using discount, par or premium coupons, and as serial or term bonds or notes, or any combination thereof, consistent with Iowa law.  The school district should utilize the coupon structure that produces the lowest True Interest Cost (TIC) taking into consideration the call option value of any callable maturities.

The school district will strive to structure their debt in sinking fund installments for each debt issue that achieves, as nearly as practicable, level debt service within an issue or overall debt service within a particular classification of debt.

Derivatives (including, but not limited to, interest rate swaps, caps, collars, corridors, ceiling and floor agreements, forward agreements, float agreements, or other similar financing arrangements), zero-coupon or capital appreciation bonds are not allowed to be issued consistent with State law.

Decision Analysis to Issue Debt
Whenever the school district is contemplating the issuance of debt, information will be developed concerning the following four categories commonly used by rating agencies assessing the school district’s credit worthiness, listed below.

Debt Analysis – Debt capacity analysis; purpose for which debt is proposed to be issued; debt structure; debt burden; debt history and trends; and adequacy of debt and capital planning. 

Financial Analysis – Stability, diversity, and growth rates of tax or other revenue sources; trend in assessed valuation and collections; current budget trends; appraisal of past revenue and expenditure trends; history and long-term trends of revenues and expenditures; evidences of financial planning; adherence to GAAP; audit results; fund balance status and trends in operating and debt funds; financial monitoring systems and capabilities; and cash flow projections.

Governmental and Administrative Analysis – Government organization structure; location of financial responsibilities and degree of control; adequacy of basic service provision; intergovernmental cooperation/conflict and extent of duplication; and overall planning efforts.

Economic Analysis – Geographic and location advantages; population and demographic characteristics; wealth indicators; types of employment, industry and occupation; housing characteristics; new construction; evidences of industrial decline; and trend of the economy.

DEBT ISSUANCE

Credit Enhancement
Credit enhancements (.i.e., bond insurance, etc.) may be used but only when the net debt service on the debt is reduced by more than the costs of the credit enhancement.

Costs and Fees
All costs and fees related to issuing the debt will be paid out of debt proceeds and allocated across all projects receiving proceeds of the debt issue.

Method of Sale
Generally, all school district debt will be sold through a competitive bidding process.  Bids will be awarded on a TIC basis providing other bidding requirements are satisfied.

The school district may sell debt using a negotiated process in extraordinary circumstances when the complexity of the issue requires specialized expertise, when the negotiated sale would result in substantial savings in time or money, or when market conditions of school district credit are unusually volatile or uncertain.

Professional Service Providers
The school district will retain external bond counsel for all debt issues.  All debt issued by the school district will include a written opinion by bond counsel affirming that the school district is authorized to issue the debt, stating that the school district has met all Iowa constitutional and statutory requirements necessary for issuance and determining the debt’s federal income tax status.  The bond counsel retained must have comprehensive municipal debt experience and a thorough understanding of Iowa law as it relates to the issuance of the particular debt.

The school district will retain an independent financial advisor.  The financial advisor will be responsible for structuring and preparing all offering documents for each debt issue.  The financial advisor retained will have comprehensive municipal debt experience, experience with diverse financial structuring and pricing of municipal securities.

The treasurer shall have the authority to periodically select other service providers (e.g., escrow agents, verification agents, trustees, arbitrage consultants, rebate specialist, etc.) as necessary to meet legal requirements and minimize net debt costs.  These services can include debt restructuring services and security or escrow purchases. 

Compensation for bond counsel, financial advisor and other service providers will be as economical as possible and consistent with industry standards for the desired qualification levels.

DEBT MANAGEMENT

Investment of Debt Proceeds
The school district shall invest all proceeds received from the issuance of debt separate from the school district’s consolidated cash pool unless otherwise specified by the authorizing bond resolution or trust indenture.  Investments will be consistent with those authorized by Iowa law and the school district’s Investment Policy to maintain safety of principal and liquidity of the funds.

Arbitrage and Record Keeping Compliance
The treasurer shall maintain a system of record-keeping, reporting and compliance procedures with respect to all federal tax requirements which are currently, or may become applicable through the lifetime of all tax-exempt or tax credit bonds.

Federal tax compliance, record-keeping, reporting and compliance procedures shall include not be limited to:

post-issuance compliance procedures (including proper use of proceeds, timely expenditure of proceeds, proper use of bond financed property, yield restriction and rebate, and timely return filing);

1. proper maintenance of records to support federal tax compliance;
2. investments and arbitrage compliance; 
3. expenditures and assets; 
4. private business use; and
5. designation of primary responsibilities for federal tax compliance of all bond financings.

Financial Disclosure
The school district is committed to full and complete financial disclosure, and to cooperating fully with rating agencies, institutional and individual investors, other levels of government, and the general public to share comprehensible and accurate financial information.  The school district is dedicated to meeting secondary disclosure requirements on a timely and comprehensive basis, as promulgated by the Securities and Exchange Commission.

The Official Statements accompanying debt issues, Annual Audits, and Continuing Disclosure statements will meet the standards articulated  by the Municipal Securities Rulemaking Board (MSRB), the Government Accounting Standards Board (GASB), the Securities and Exchange Commission (SEC), Generally Accepted Accounting Principles (GAAP) and the Internal Revenue Service (IRS).  The treasurer shall be responsible for ongoing debt disclosure as required by any Continuing Disclosure Certificate for any debt issue and for maintain compliance with disclosure standards promulgated by state and federal regulatory bodies.

 

 

Legal Reference:  Iowa Code §§ 74-76; 278.1; 298; 298A

Approved:                                     
Reviewed:                                      
Revised:             

 

The board may conduct an election for the authority to issue bonded indebtedness. Revenues generated from an approved bond issue shall be used only for the purpose stated on the ballot. Use of excess funds in the account for any other purpose requires the approval of the voters in the school district community.

Revenues received from the issuing of bonded indebtedness shall be deposited into the schoolhouse fund.

 

 

Legal Reference:  Iowa Code §§278.1(7), 291.13, 74-76, 298 (1991)

Cross Reference:  801        Financial Accounting System
                                      804        Revenue

Approved:  4-23-92              
Reviewed:  1-08-24              
Revised:             

 

The board supports the investment of funds in excess of current needs.  In making investments, the school district shall exercise the judgment and care under the circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs.

Prior to making an investment, the board secretary shall determine the length of time, the rate of interest and the location for investing the funds.

 

 

Legal Reference:  Iowa Code §§279.29, 283A, 285, 442, 452.10, 453, 633.12 (1991)
                                      281 Iowa Admin. Code 58, 43, 44

Cross Reference:  804        Revenues

Approved:  4-23-92                            
Reviewed:  1-08-24              
Revised:             

 

The board believes gifts, grants and bequests to the school district may be accepted if they will further the interests of the educational program.  The board shall have sole authority to determine whether the gift furthers the interests of the school district.

Gifts, grants, and bequests shall be approved by the board or the superintendent.  Once it has been approved by the board, a board member or the administration may accept the gift on behalf of the school district.

Gifts, grants, and bequests once accepted on behalf of the school district shall become the property of the school district.  Gifts, grants, and bequests shall be administered in accordance with terms, if any, agreed to by the board.

 

 

Legal Reference:  Iowa Code §§279.42, 565.6 (1991)

Cross Reference:  221        Gifts to Board of Directors Members
                                       402.4    Gifts to School District Personnel
                                       508.1    Class or Student Group Gifts

Approved:  4-23-92                            
Reviewed:  1-08-24              
Revised:             

 

Funds raised by students or from student activities are the property of and shall be under the financial control of the school district.  Students may use these funds for purposes approved by the administration.  Funds remaining in the fund after the graduation of the class shall revert to the school district.

It shall be the responsibility of the board secretary and treasurer to keep student activity funds up-to-date and complete.

 

 

Legal Reference:  Iowa Code §§11.23, 256.8(7), 291.13 (1991)
                                      281 Iowa Admin. Code 12.3 (3)

Cross Reference:  504        Student Activities
                                      801        Financial Accounting System

Approved:  4-23-92                            
Reviewed:  1-08-24              
Revised:  4-14-97