WSSDA Webinar
May 14, 2014
Barbara Posthumus, Director of Business Services
Lake Washington School District
bposthumus@lwsd.org
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Budgeting for Capital Levies
Budgeting for Bonds
Debt Service Limitations
Front-Funding
Monitoring and Reporting
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For levies passed in 2014, collection begins
in 2015
Typically collect 53% in Spring and 47% in Fall
For newly passed levies, your 2014-15
budget will only include the spring collection.
The 2nd year, 2015-16 will include 100% of
annual levy
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Example:
$5.0 Million levy over 4 years = $20Million
$5.0 x 53% = $2,650,000 = 2014-15 revenue
$5.0 x 53% = $2,650,000 plus
$5.0 x 47% = $2,350,000
Total = $5,000,000 = 2015-16 revenue
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Technology Levies have special rules
Beginning in 2008, OSPI required that
expenditures on staff training and software
related to technology systems must be spent
in the General Fund
Capital Technology Levy revenue then must
be transferred from the Capital Projects Fund
to the General Fund to cover the costs
You will see this in the presented budget as a
transfer out of capital and a revenue in GF
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100% of Revenue and Expenditures are in
Capital Projects Fund
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Great news – you passed a bond!!
Determination of when to sell bonds
Must be able to spend 85% of proceeds within
3 years
Business Office will work with underwriter
and advisor to sell bonds
Board will need to pass resolution
Superintendent/Business Office will conduct
call with rating agencies to rate the bonds
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Bonds impact two funds:
Revenue from bond sale and construction
expenses go in Capital Projects Fund
Principal and Interest Payments on Bonds are
paid out of debt service fund.
The presented budget will reflect estimated
amounts if prior to actual sale
Will need to levy an amount sufficient to pay
principal and interest
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The total indebtedness of a district can not
exceed 5% of the value of taxable property
within a school district. This includes all non
voted debt and all voted debt (bonds).
Voter approved bond capacity may exceed
5% of the district’s assessed valuation but
the principal amount of the bond sale is
limited to the available debt capacity.
Small school districts may have to structure
bond issues and repayments differently than
large districts due to the debt limitations.
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Griffin School District AV=$1,300,000,000
5% debt limitation = $65 million
Current outstanding voted debt $13 million
Current outstanding non voted debt $300K
Cost of a new high school $100 million
◦ To construct a high school – would likely need to
qualify for state matching funds and would need to
ensure funding availability before moving forward.
Maximum bond issuance would be about $52 million.
◦ In this scenario, a district could issue ½ and then issue
the other ½ in the subsequent year. This would
increase the cost of issuance but would likely result in
more available capacity (if AV increases and additional
existing debt is paid down).
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LGOs, lines of credit, capital leases, LOCAL
program obligations, conditional sales
contracts, and qualified zone academy bonds
are all examples of non-voted debt subject to
different rules for use of funds.
All non voted debt above is limited to .00375
(3/8th of 1 percent) of the value of taxable
property within the school district
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Utilizing the State Treasurer’s LOCAL
program, one local district was able to
purchase school buses over a 13 year term.
They are making payments utilizing state
funds from the depreciation schedule.
This funding allowed them to fund buses
without utilizing a transportation levy or
cutting educational programs.
$6.00
2.19
2.50
2.78
$3.00
2.98
3.16
3.25
3.44
$4.00
3.62
$5.00
1.98
2016
2017
2018
2015
2016
2.00
1.93
2015
1.40
2.10
2014
1.47
2.22
$1.00
2.23
$2.00
$0.00
Bond
Levy
2017
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Can you spend dollars from voted levies or
bonds prior to collection?
Maybe…….
Need to have other reserves
Need to clearly track new expenditures
separately
Need a clear cash flow plan
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Why you may not want to
◦ If use other reserves to front-fund, then those
reserves will not be available for emergencies
◦ May show negative fund balance line item on your
budget – requires additional explanations
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Depends on your level of reserves and need to
use those reserves immediately for other
things
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For best transparency, sources of funds
should be clearly identified.
Bonds vs. levies
Multiple Levies crossing over years
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Monthly board financial reports provided by
district
If conducting multi-year construction project,
outstanding encumbrances in Capital Projects
Fund may exceed budget
District staff have reporting requirements to
OSPI if receiving State Assistance on
construction projects
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Organization and Financing of Washington
Public Schools
http://www.k12.wa.us/safs/PUB/ORG/13/Final%20Edi
tion%202013.pdf
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Funding Resources for School Facilities
http://www.k12.wa.us/SchFacilities/default.aspx
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