The procedures governing the issuance of bonds with SFCC participation are outlined in 750 KAR 1:010.
Upon the district’s acceptance of an offer of assistance, the SFCC decides whether the SFCC or the local school district will issue the bonds. The school district usually issues the bonds through a corporation established for that purpose. Local school districts may request authority from the SFCC to issue the bonds through a city, county, or other agency or instrumentality of the Board of Education.
For bonds that will be issued at the local level, the local board of education is required to obtain the services of a financial advisor. After the contract with the financial advisor is signed by district officials and the advisory firm, the contract must be submitted to the SFCC for final approval. Fees paid to financial advisors and other professionals are limited based on the size of the bond issue in 750 KAR 1:010 Section 8.
The portion of the bond issue with SFCC debt service support is limited to a 20-year term with a level repayment schedule. The maximum annual repayment amount shall not exceed the offer of assistance from the SFCC.
The debt service schedule is required to have 20 years of payments based on 6-month intervals or 40 payments. If the payments begin so that only one payment is made in the first fiscal year of the schedule, payments may extend over 21 fiscal years. The amounts of the first and last payments combined must not exceed the amount of one annual payment.
The portion of the bond issue with local debt service support may be structured to meet the unique needs of that district.
KDE and the SFCC must comply with House Bill 258 enacted by the 1992 General Assembly. The SFCC requires information about new bond issues to be submitted to the Capital Projects and Bond Oversight Committee for review and recommendation. The normal meeting date of the committee is the third Tuesday of each month. A bond payee disclosure form and preliminary information must be submitted at least 14 days prior to the committee’s regularly scheduled meeting. The SFCC requires this information to be submitted by noon one working day prior to the above 14 day deadline set by the committee.
Please note that Capital Projects and Bond Oversight Committee meeting dates often change when the General Assembly is in session.