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The Lake Pend Oreille School District plant facilities levy on Aug. 30 contains a new and complex funding mechanism that you should understand before casting your vote.

School districts traditionally have two choices when asking taxpayers to fund capital improvements, a bond or a plant facilities levy.

A bond provides the district with upfront funds but requires a two-thirds voter approval. A plant facilities levy passes with as little as 55 percent voter approval, but the funds become available as taxes are collected over time. The school board chair publicly announced that getting a two-thirds approval is doubtful, so they chose for the levy option. As required by the Idaho Constitution, each year’s debt cannot exceed each year’s levy revenue.

However, in October 2015, the Idaho Supreme Court ruled that school districts could enter into annually-renewable facility lease agreements that exceed their annual revenue without having it considered debt. This essentially circumvents the bond process and disenfranchises voters from weighing in on public debt.

LPOSD now proposes to utilize this new funding mechanism. Upon levy passage, it plans to enter into a six-year, annually-renewable lease agreement with an intermediary and bond holders. This option allows LPOSD to obtain the full $55,118,997 funds up front. All projects will be completed within two years, but the taxpayers’ levy obligation will run for six years.

Should LPOSD default on, or fail to renew the lease agreement, the buildings would need to be vacated so that bond holders could find someone who is willing to take over the lease.

Confused?

KATHY ROSE

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