2020 Idaho Code
Title 33 - EDUCATION
Chapter 52 - PUBLIC CHARTER SCHOOLS
Section 33-5217 - PUBLIC CHARTER SCHOOL DEBT RESERVE.

33-5217. PUBLIC CHARTER SCHOOL DEBT RESERVE. (1) There is hereby created the public charter school debt reserve to assist qualifying charter schools in obtaining favorable financing for facility improvements and construction. A public charter school seeking to use the public charter school debt reserve must receive approval from the Idaho housing and finance association pursuant to the criteria set forth in this section.

(2) A public charter school shall be qualified to use the public charter school debt reserve only upon satisfaction of the following conditions:

(a) The public charter school must demonstrate it has obtained one (1) of the following:

• (i) A letter of commitment from a national or state chartered financial institution;

  (ii) A letter of commitment from a nonprofit corporation;

  (iii) A letter of commitment from a community development financial institution; or

  (iv) A letter of commitment from a qualified underwriter or an investment firm;

(b) The public charter school must provide annual budgets and cash flow statements and must demonstrate satisfaction of each of the following criteria:

• (i) Projected future budgets, cash flows and operating reserves greater than sixty (60) days of cash on hand to support a debt service coverage greater than 1.20x;

  (ii) Cost to operate facility, including debt service, occupancy cost and operating expenses, not to exceed twenty percent (20%) of revenue;

  (iii) Audited financial statements with unqualified opinions for the prior three (3) years; and

  (iv) Certification from a school administrator that projected future budgets and cash flows are based on reasonable assumptions related to level or increasing projected enrollment or waitlist and projected total income, including any matching funds and donations contingent on receipt of a loan under this section; and

(c) The public charter school must obtain approval for issuance by the Idaho housing and finance association to act as a conduit issuer.

(3) Public charter schools that satisfy the requirements set forth in subsection (2) of this section shall receive approval from the Idaho housing and finance association to rely on the public charter school debt reserve for assistance in obtaining favorable financing for facility improvements and construction, so long as sufficient moneys exist pursuant to subsection (4) of this section. Eligible schools shall receive approval on a first-come basis according to date of completed application, in an amount not to exceed twenty-four (24) months of principal and interest payments.

(4) There is hereby established in the state treasury the public charter school debt reserve fund that shall consist of moneys made available through appropriations, fees, grants, gifts or any other source to fulfill the purposes of this section. Moneys in the fund are hereby continuously appropriated for the purposes of this section, and shall only be expended for the purposes stated herein. Qualifying schools annually shall pay an amount equal to ten (10) basis points of the principal amount of the debt for which it qualified to use the public charter school debt reserve, which shall be deposited into the public charter school debt reserve fund.

(5) Subject to the limitations of subsection (3) of this section, if a qualified public charter school defaults on an outstanding debt for which the Idaho housing and finance association has made the debt reserve available, and there is no other money available to the charter school to make the payment, money shall be withdrawn from the public charter school debt reserve fund to pay the principal, redemption price or interest on the outstanding debt. Upon certification by the Idaho housing and finance association to the superintendent of public instruction, payment shall be made from the public charter school debt reserve fund toward the outstanding debt.

(6) If money has been withdrawn from the public charter school debt reserve fund for a public charter school pursuant to subsection (5) of this section, then the superintendent of public instruction shall redirect the money from such public charter school’s allocation of facilities funds pursuant to section 33-5208(5), Idaho Code. Any money redirected shall be according to a determined time and sequence of payments, over a period of years until the amount so withdrawn has been repaid to the fund so long as the redirection does not cause an event of default under the agreement(s) governing the public charter school’s obligation for which the debt reserve was made available, excepting that any money withdrawn during any fiscal year shall be repaid within ten (10) years.

History:

[33-5217, added 2015, ch. 343, sec. 1, p. 1296.]