When a bond referendum comes around for a school district, it often is the culmination of years of planning, strategizing and communicating to the public. Especially in these economic times, passing a building referendum is challenging. Complete transparency among the superintendent, school board and community is essential to communicate the…

The Internal Revenue Service (IRS) has announced that post-issuance tax compliance is among its highest priorities. This is supported by the recently imposed annual reporting requirement on nonprofit corporations regarding the application and use of tax-exempt bonds issued for their benefit. School districts issuing tax-exempt bonds often spend…

These qualitative case studies give the prospective superintendent a real-life look at life on the other side of the district CEO's desk. Two dozen superintendents reflect upon their first challenges and growth opportunities that arose during that all-important first year. They tell it like it is, no sugar-coating. The experiences they listed, in…

During the past several years, school district personnel have faced an arduous task of convincing a local electorate--including those who are not directly associated with local schools--to increase its own tax rate. Convincing demographic groups that have a vital interest in improving school facilities can be an easier task. Parents who want to…

Issuing long-term debt can be a complex, multifaceted process. Although the process varies by stare, typically the school business official and the district solicitor work with the financing ream, which includes a financial adviser, bond counsel, underwriter, raring agency, and possibly a bond insurance agent, paying agent, and architect.…

By convention U.S. bond markets announce the actual price of a bond as the sum the quoted price plus accrued interest. The economic meaning of accrued interest and its role in this price announcing convention is generally misunderstood by accounting textbook authors who mistakenly provide accrued interest with both an economic and administrative…

This case, inspired by a real school district scenario, was developed for use in a graduate-level course in school finance. James Spencer had just been selected as the new superintendent of a low-income, 400-student, rural school district in need of many capital improvements. The previous superintendent had refused to hold a bond election because…

Having returned to teaching the basics of pricing fixed-income securities after several years, the author recalls the difficulty students have in understanding the total return provided by fixed-income securities that are purchased at either a discount or premium from face value. This teaching note attempts to clarify the concept by suggesting…

Nearly three years ago, in a span of just nine months, the North Harris Montgomery Community College District lost a bond referendum and its chancellor. Nine months later, the Houston-area district had a new leader, a new name, and a victorious bond issue. And this May--a year after the successful bond vote--the college bought an office complex…

The federal government has traditionally given local school districts an indirect subsidy by allowing them to issue tax-exempt bonds. Because the bondholders pay no tax on the interest income, they are willing to take a bond bearing interest at, say, 4.5% rather than 6%. Such lower interest is great for the school district because it saves the…

Despite the recent turmoil in the U.S. economy, most libraries that were tracked by "Library Journal" won their referenda at a rate just slightly lower than 2007. Nearly three-quarters of operating referenda passed. Building referenda under $10 million passed at a whopping 85%, with those over $10 million batting slightly better than…

Qualified school construction bonds (QSCBs) are part of the American Recovery and Reinvestment Act of 2009. These bonds allow school districts to finance capital projects at no or very low interest rates. In a nutshell, bondholders accept a lower interest rate because the corresponding federal tax credit they receive subsidizes that lower interest…

Over the years, the author has had the opportunity to make several presentations to school boards. The author offers some tips and tricks she has learned, having given board presentations about the specific topics she listed in this article, and receiving feedback after each presentation. She points out that the most important thing to keep in…

Construction bonding authority--a technical, and often obscure, source of capital funding for school districts--has emerged as a hot ticket for those looking to finance school facilities work under the federal government's economic-stimulus program. School districts left out of the loop for direct funding are lining up for some of at least $24…

Dozens of colleges and universities, including some of the country's wealthiest institutions, are facing a sharp rise in interest payments on a whopping mound of debt. About a third of the nearly 300 private institutions rated by Moody's Investors Service are financing more than half their debt with variable-rate bonds, some of whose rates have…