Crawford County R-II School District Board Policies

Home

P 3102 Debt Management Policy

The debt management policy of the District is to remain in full compliance with statutes of the State of Missouri by borrowing within the allowable limits of no more than fifteen percent (15.00%) of the District’s assessed valuation, which can include state assessed railroad and utility properties located within its boundaries.  It is also important that the District exercise caution and prudence concerning its full compliance with the rules and regulations of the United States Department of the Treasury Internal Revenue Service (IRS) to avoid any risk of loss of the tax exempt status of any proposed financings, as well as those currently in existence.  Generally the improper spending of the bond proceeds is what triggers a violation of IRS regulations and not complying with the ballot language for the projects can create problems with the Missouri State Auditor and local patrons.

In terms of philosophy towards the monitoring of a long term debt management policy, the Board of Education and Administrators recognize that to achieve the necessary 4/7 or 2/3 majority for approval by the voters of general obligation bond issues it is likely to be much easier if no increase in the debt service fund levy occurs.  As a result, it is the District’s practice to issue general obligation bonds with optional redemption (call) provisions that facilitate prepayments when excessive debt service fund balances accumulate with the goal of maintaining a constant debt service fund levy.  This policy has enabled the District to achieve significant interest savings by issuing refunding bonds to capture lower interest when municipal bonds markets change.

On occasion the District may consider capital facilities or equipment lease financing programs.  It is the intent to only enter into those types of transactions when it is clear based upon reports from the District’s Municipal Bond Underwriter that such a program is affordable and that its implementation does not harm the overall operating budget.  If the project and lease financing are deemed essential, but beyond the range of reasonable affordability, the Board of Education and Administration will approach the voters for a temporary or permanent increase in the operating levy to produce the additional revenue.

Since general obligation bond issues and capital facilities or equipment lease financings happen intermittently, it presents challenges for administrators and board members to keep fully informed about the conditions of the municipal bond market, changing rules and regulations issued by the U. S. Treasury Department, etc.  For these reasons the Board of Education engages the service of a municipal bond underwriter on a continuing basis to assist the administrators and board members keep up to date and understand what refunding opportunities exist and what actions are necessary to preserve the existing debt service fund levy to remain on track with the long range facilities plans. 

The Superintendent of Schools and other staff providing assistance with those special duties are responsible to the Board of Education for carrying out this policy.


Board Approved Date: September 2012
Last Updated: December 2013