02/18/2010 - Alternative Financing

Alternative Financing Advantages

• No Election Required-General Obligation Bonds require an election –voter approval.  Alternative Financing thru lease purchase does not require an election based on the Public Property Finance Act authorizing school districts to enter into lease purchase contracts.  Therefore, under Alternative Financing        No Election is Required.
• No Tax Increase Required-Under Alternative Financing thru lease purchase no increase in property taxes is required.  School Boards can at their discretion raise property tax rates based on a particular district’s needs or mandates from the State anytime.  However, to implement alternative financing No Tax Increase is Required.
• Flexible Payment Schedule-Alternative Financing can provide a payment schedule designed to meet the districts needs.  For example, a district may need lower payments for the first one or two years.  Under alternative financing payment schedules can be predicated on delayed payments while a project is under construction or interest only payments for a time certain.  Flexible payments are only available thru alternative financing programs.
• Tailored Financing-Many times a district will have revenue sources low one year and high another.  A district maybe in a modest growth phase with an increasing ADA or a stable ADA but need new facilities.  Chancellor is capable of providing a financing plan commensurate with the district’s budget and future income stream.
• Expedited Construction-Alternative Financing thru lease purchase revenue bonds speeds up the construction process.  Presently under State law a district can hold a bond election in May or November meaning the chances of actually starting construction in the bond election year is very unlikely.  With alternative financing the project can be started as soon as the board takes action on all necessary and proper legal steps.
• Professional Consultation-Chancellor Financial assembles experienced/ knowledgeable bond counsel, underwriters, financing sources and financial consultant in order to shepherd the district thru the financing project.