5340 - Borrowing of Funds
|Policy: Borrowing of Funds||Policy Number: 5340|
|Date of Original Policy: 07/10/2002||Date Revision Adopted: 11/14/2017|
|Reviewed by Policy Committee: 10/18/2017||Date of Next Review: 01/21/2021|
|Replacement of Policy Number:|
The School District may borrow money only by means of serial bonds, bond anticipation notes capital notes, tax anticipation notes, revenue anticipation notes and budget notes as excerpted from Policy #5221 Revenue and District Investments.
NYS Local Finance Law Section 20 Borrowing Purposes and Debt Instruments
1) The local Finance Law authorized OPERATING BORROWING to cover cash flow shortfalls including Revenue Anticipation Notes, Tax Anticipation Notes or Budge Notes. These types of borrowing must be authorized by the Board of Education through the adoption of a formal borrowing resolution
2) CAPITAL BORROWINGS may include Bond Anticipation Notes, Statutory Installment Bonds and serial Bonds. These borrowing are only authorized for items for which Period of Probably usefulness has been established by the New York Legislature through Section 11.00 of the Local Finance Law. These borrowings, generally, may only be undertaken after a positive majority vote at the annual or special district meeting. The Board of Education must formalize the authority for the indebtedness by adopting a legally complete form BOND RESOLUTION prior to any borrowing. The text of the Board Resolution, vote and legal notices should be prepared by a recognized bond counsel. The Board of Education hereby delegates its authority to set the terms and condition of any borrowing to the President of the Board of Education as Chief Fiscal Officer of the District.
The Superintendent, assisted by their staff and the district financial consultant, shall make recommendations to the Board of Education on the timing, bidding, terms and conditions, placement and reporting of any borrowing. Operating borrowing recommendations shall be supported by a monthly cash flow estimate covering the time thereof and establishing the amount of such borrowing. The Superintendent is authorized to solicit and use the services of a financial consultant and bond counsel in planning and completing any borrowing to optimize the number of potential bids and obtain lower market interest rates.
All borrowing shall be documented in written reports outlining the details of each borrowing and the interest rate bids received thereon. The written report shall first be presented to the Superintendent who shall report thereon at the next regularly scheduled board meeting.
General Municipal Law Section 39
Education Law Sections 1604-a and 1723 (a)
Local Finance Law Section 165