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ALTERNATIVE CAPITAL FUNDING SOURCES conventional way mainly for big capital expenditures. Show the
community that growth is coming.”
CONTINUED FROM PAGE 22 Alternatives to bonds include capital override, performance

Another consideration is the expected life of the project, which contracting, lease-purchase, cash funds and capital funds. e pros
may be 20-to-30 years or longer, but the district may want to pay and cons for each were discussed.
o the debt within 10 years, LaVallee said. Capital override. e pros: e amount is funded each year, with
“If you want to repay the debt in ten years, and life of the project some exibility for use, and there is no lasting debt. It is pay as you
is longer, you will be having current taxpayers foot the bill, and go. e cons are, they’re hard to get approved and are limited to
when people move into the district in year 11 and beyond, they get 10-percent of the revenue control limit.
exclusive use and they pay no taxes for the buildings that have at Performance contracting. e pros: It is used to upgrade and
least 20 more years of use,” LaVallee said. replace equipment and provides a guaranteed savings. e cons: It
Computers only last three to ve years, buses six to ten years, but doesn’t produce a substantial relief to the M&O budget.
schools o en stretch their usefulness. Lease-purchase. e pros: Provides for buildings or equipment
Typical investors include money market funds, money managers, and spreads payments over several years. e cons: It commits
municipalities, bank trusts, large investment advisers, short bond future funds for the current year.
funds and hedge funds. Cash funds. e pros: Funds are already in place and ready for
A er issuing a bond, school districts face several requirements. use. e cons: Once they’re gone, they’re gone, and hard to replace.
Among the most important, LaVallee said, are the annual nancial Capital funds. e pros: Funds are in place and don’t need voter
disclosure statement with supporting tables, and holding an annual approval. e cons: Capital funds have been drastically reduced
public meeting regarding the district’s capital plans. during the past decade. “It’s like robbing Peter to pay Paul,” Bowler
e district can use the opportunity to tell the community what said. “ ere are a lot of people pulling for that money – classroom,
it is doing, how the money has been spent, and show pictures of teachers, capital needs, textbooks.”
projects, LaVallee said.
Bowler told AASBO members that to evaluate their options Michael LaVallee can be reached at: mlavallee@stifel.com.
they need to know what they are and their timeframe. “Begin with
the end in mind,” he said. “What is your objective? Bonds are the Nate Bowler can be reached at: nbowler@besd33.org.

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