Policy 702: Income
702.1 Local, State, and Federal Income
All income received by the School District shall be classified under the official accounting system and be placed in the hands of the Secretary and Treasurer of the Board of Directors to be deposited into the official school district depository as set by the Board of Directors and in accordance with the laws of the State of Iowa.
Legal Reference: (Code of Iowa) Chapters 291.12; 453.1
Date of Adoption: November 12, 1974
Reviewed: April 13, 1992; Dec. 14, 1998; May 14, 2001; Feb. 14, 2006; Jan. 10, 2011; March 9, 2015; Nov. 12, 2018; Nov. 8, 2021
Amended:
702.2 Use of School Property and Equipment
The Superintendent of Schools shall establish the necessary regulations governing the use of the school buildings and/or its equipment by outside groups. These regulations shall be consistent with the laws of the State of Iowa. The Superintendent shall also set up a schedule of compensation for the use of the school buildings and/or its equipment. These regulations shall be submitted to the Board of Directors for final approval.
Any compensation for such use shall be paid into the general fund and be expended in the upkeep and repair of such school property, and in purchasing supplies therefore.
Legal Reference: (Code of Iowa) Chapters 297.9, 297.10
Date of Adoption: November 12, 1974
Reviewed: April 13, 1992; Dec. 14, 1998; May 14, 2001; Feb.14, 2006; Jan. 10, 2011; March 9, 2015; Nov. 12, 2018; Nov. 8, 2021
Amended: January 11, 1999
702.3 Sale of Bonds
The Board of Directors shall, under legal petition, conduct an election for authorization to issue bonds. The election, the issuance, the sale, the receipts from sale, and the payment of the bonds shall be made in accordance with the statutes of the State of Iowa.
Legal Reference: (Code of Iowa) Chapters 75.1 - 75.9; 76.1 - 76.9; 291.13; 298.9; 298.14; 298.18 - 298.24
Date of Adoption: November 12, 1974
Reviewed: April 13, 1992; Dec. 14, 1998; May 14, 2001; Feb. 14, 2006; Jan. 10, 2011; March 9, 2015; Nov. 12, 2018; Nov. 8, 2021
Amended:
702.4 Investments
School district funds in excess of current needs are invested in compliance with this policy. The goals of the school district's investment portfolio in order of priority are:
To provide safety of the principal;
To maintain the necessary liquidity to match expected liabilities; and
To obtain a reasonable rate of return.
In making investments, the school district will exercise the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use to meet the goals of the investment program.
School district funds are monies of the school district, including operating funds. "Operating funds" of the school district are funds which are reasonably expected to be used during a current budget year or within fifteen months of receipt. When investing operating funds, the investments must mature within three hundred and ninety-seven days or less. If, during the current budget year an amount of public funds will exceed operating funds by at least thirty-three percent, the amount of public funds that exceed operating funds by greater than thirty-three percent may be invested in certificates of deposit at federally insured depository institutions which mature within sixty-three months or less, in accordance with state and federal laws. When investing funds other than operating funds, the investments must mature according to the need for the funds.
The board authorizes the treasurer to invest funds in excess of current needs in the following investments.
Interest bearing savings, money market, and checking accounts at the school district's authorized depositories;
Iowa Schools Joint Investment Trust Program (ISJIT); and,
Certificates of deposit and other evidences of deposit at federally insured Iowa depository institutions.
It is the responsibility of the treasurer to oversee the investment portfolio in compliance with this policy and the law.
The treasurer is responsible for reporting to and reviewing with the board at its regular meetings the investment portfolio's performance, transaction activity and current investments.
It is the responsibility of the superintendent to deliver a copy of this policy to the school district's depositories, auditor and outside persons doing investment business with the school district.
It will also be the responsibility of the superintendent, in conjunction with the treasurer, to develop a system of investment practices and internal controls over the investment practices. The investment practices are designed to prevent losses, to document the officers' and employees' responsibility for elements of the investment process and address the capability of the management.
Legal Reference: Iowa Code §§ 11.2, .6; 12.62; 12B.10; 12C; 22.1, 14; 28E.2; 257; 279.29; 283A; 285; 502.701; 633.123 (2005).
Date of Adoption: November 12, 1974
Reviewed: April 13, 1992; Dec. 14, 1998; May 14, 2001; Feb. 14, 2006; Jan. 10, 2011; March 9, 2015; Nov. 12, 2018; Nov. 8, 2021
Amended: January 11, 1999; February 14, 2006; Nov. 12, 2018
702.5 Gifts, Grants and Bequests
If approved by the Board of Directors, gifts, grants, or bequests involving money, equipment, and furnishings may be accepted by the School District. All gifts, grants, or bequests shall be administered in pursuance of the terms of the gift or bequest. Such gifts shall become the property of the School District and shall be under the control of the Board of Directors.
Legal Reference: (Code of Iowa) Chapter 565.6
Date of Adoption: November 12, 1974
Reviewed: April 13, 1992; Dec. 14, 1998; Jan. 10, 2011, May 14, 2001; Feb. 14, 2006; March 9, 2015; Nov. 12, 2018; Nov. 8, 2021
Amended:
702.6 Depository Funds
At the annual organizational meeting, the Board of Directors shall designate by resolution, which shall be entered in the official minutes of the Board, the name and location of the bank or banks selected as the official School District depository/depositories. The Board of Directors may also designate the maximum amount which may be kept on deposit in each bank.
Legal Reference: (Code of Iowa) Chapter 453.2
Date of Adoption: November 12, 1974
Reviewed: April 13, 1992; Dec. 14, 1998; May 14, 2001; Feb. 14, 2006; Jan. 10, 2011; March 9, 2015; Nov. 12, 2018; Nov. 8, 2021
Amended: June 9, 1986; January 11, 1999
702.7 Student Fees, Rentals, Charges
The Board of Directors believes that all school instructional programs shall be free to the student, except where charges may be made as provided in the Code of Iowa. All fees, rentals and charges shall be recorded in such a manner as to identify the source of the funds.
Students may be required to buy or be assessed a specific fee for textbooks or online resources required for post-secondary education courses offered through programs such as the Pathways for Academic Careers and Employment (PACE) program.
Principals shall use the established State and Federal income qualifications for free and reduced lunches as a guideline for waiving fees, rentals or charges.
Legal Reference: (Code of Iowa) Chapters 280.10 –11, 282.6, 301.1
Date of Adoption: January 11, 1999
Reviewed: May 14, 2001; Feb. 14, 2006; Jan. 10, 2011; March 9, 2015; March 11, 2019; Nov. 12, 2018; Nov. 8, 2021
Amended: March 11, 2019
Policy 702.8 POST-ISSUANCE COMPLIANCE FOR TAX-EXEMPT OBLIGATIONS
1. Compliance Coordinator:
a) The Chief Financial Officer ("Coordinator") shall be responsible for monitoring post-issuance compliance.
b) The Coordinator will maintain a copy of the transcript of proceedings in connection with the issuance of any tax-exempt obligations. Coordinator will obtain such records as are necessary to meet the requirements of this policy.
c) The Coordinator shall consult with bond counsel, a rebate consultant, financial advisor, IRS publications and such other resources as are necessary to understand and meet the requirements of this policy.
d) Training and education of Coordinator will be sought and implemented upon the occurrence of new developments and upon the hiring of new personnel to implement this policy.
2. Financing Transcripts. The Coordinator shall confirm the proper filing of an 8038 Series return, and maintain a transcript of proceedings for all tax-exempt obligations issued by the District, including but not limited to all tax-exempt bonds, notes and lease-purchase contracts. Each transcript shall be maintained until eleven (11) years after the tax-exempt obligation it documents has been retired. Said transcript shall include, at a minimum:
a) Form 8038s;
b) minutes, resolutions, and certificates;
c) certifications of issue price from the underwriter;
d) formal elections required by the IRS;
e) trustee statements;
f) records of refunded bonds, if applicable;
g) correspondence relating to bond financings; and
h) reports of any IRS examinations for bond financings.
- Proper Use of Proceeds. The Coordinator shall review the resolution authorizing issuance for each tax-exempt obligation issued by the District, and that the District shall:
a) obtain a computation of the yield on such issue from the District’s financial advisor;
b) create a separate Project Fund (with as many sub-funds as shall be necessary to allocate proceeds among the projects being funded by
the issue) into which the proceeds of issue shall be deposited;
c) review all requisitions, draw schedules, draw requests, invoices and bills requesting payment from the Project Fund;
d) determine whether payment from the Project Fund is appropriate, and if so, make payment from the Project Fund (and appropriate sub-
fund if applicable);
e) maintain records of the payment requests and corresponding records showing payment;
f) maintain records showing the earnings on, and investment of, the Project Fund;
g) ensure that all investments acquired with proceeds are purchased at fair market value;
h) identify bond proceeds or applicable debt service allocations that must be invested with a yield-restriction and monitor the investments
of any yield-restricted funds to ensure that the yield on such investments does not exceed the yield to which such investments are
restricted;
i) maintain records related to any investment contracts, credit enhancement transactions, and the bidding of financial products related to
the proceeds;
- Timely Expenditure and Arbitrage/Rebate Compliance. The Coordinator shall review the Tax-Exemption Certificate (or equivalent) for each tax-exempt obligation issued by the District and the expenditure records provided in Section 2 of this policy, above, and shall:
a) monitor and ensure that proceeds of each such issue are spent within the temporary period set forth in such certificate;
b) if the District issuance does not meet the “small issuer” exception for said obligation, monitor and ensure that the proceeds are spent in
accordance with one or more of the applicable exceptions to rebate as set forth in such certificate;
c) not less than 60 days prior to a required expenditure date confer with bond counsel and a rebate consultant if the District will fail to
meet the applicable temporary period or rebate exception expenditure requirements of the Tax-Exemption Certificate; and
d) in the event the District fails to meet a temporary period or rebate exception:
i. procure a timely computation of any rebate liability and, if rebate is due, file a Form 8038-T and arrange for payment of such rebate
liability;
ii. arrange for timely computation and payment of “yield reduction payments” (as such term is defined in the Code and Treasury
Regulations), if applicable.
- Proper Use of Bond Financed Assets. The Coordinator shall:
a) maintain appropriate records and a list of all bond financed assets. Such records shall include the actual amount of proceeds (including
investment earnings) spent on each of the bond financed assets;
b) with respect to each bond financed asset, the Coordinator will monitor and confer with bond counsel with respect to all proposed:
i. management contracts,
ii. service agreements,
iii. research contracts,
iv. naming rights contracts,
v. leases or sub-leases,
vi. joint venture, limited liability or partnership arrangements,
vii. sale of property; or
viii. any other change in use of such asset;
c) maintain a copy of the proposed agreement, contract, lease or arrangement, together with the response by bond counsel with respect to said
proposal for at least three (3) years after retirement of all tax-exempt obligations issued to fund all or any portion of bond financed assets; and
d) In the event the District takes an action with respect to a bond financed asset, which causes the private business tests or private loan financing
test to be met, the Coordinator shall contact bond counsel and ensure timely remedial action under IRS Regulation Sections 1.141-12.
- General Project Records. For each project financed with tax-exempt obligations, the Coordinator shall maintain, until three (3) years after retirement of the tax-exempt obligations or obligations issued to refund those obligations, the following:
a) appraisals, demand surveys or feasibility studies,
b) applications, approvals and other documentation of grants,
c) depreciation schedules,
d) contracts respecting the project.
- Advance Refundings. The Coordinator shall be responsible for the following current, post issuance and record retention procedures with respect to advance refunding bonds:
a) Identify and select bonds to be advance refunded with advice from internal financial personnel, and a financial advisor;
b) The Coordinator shall identify, with advice from the financial advisor and bond counsel, any possible federal tax compliance issues prior to structuring any advance refunding;
c) The Coordinator shall review the structure with the input of the financial advisor and bond counsel, of advance refunding issues prior to the issuance to ensure (i) that the proposed refunding is permitted pursuant to applicable federal tax requirements if there has been a prior refunding of the original bond issue; (ii) that the proposed issuance complies with federal income tax requirements which might impose restrictions on the redemption date of the refunded bonds; (iii) that the proposed issuance complies with federal income tax requirements which allow for the proceeds and replacement proceeds of an issue to be invested temporarily in higher yielding investments without causing the advance refunding bonds to become “arbitrage bonds”; and (iv) that the proposed issuance will not result in the issuer’s exploitation of the difference between tax exempt and taxable interest rates to obtain an financial advantage nor overburden the tax exempt market in a way that might be considered an abusive transaction for federal tax purposes.
d) The Coordinator shall collect and review data related to arbitrage yield restriction and rebate requirements for advance refunding bonds. To
ensure such compliance, the Coordinator shall engage a rebate consultant to prepare a verification report in connection with the advance
refunding issuance. Said report shall ensure said requirements are satisfied.
e) The Coordinator shall, whenever possible, purchase SLGS to size each advance refunding escrow. The financial advisor shall be included in
the process of subscribing SLGS. To the extent SLGS are not available for purchase, the Coordinator shall, in consultation with bond counsel and
the financial advisor, comply with IRS regulations.
f) To the extent as issuer elects to the purchase a guaranteed investment contract, the Coordinator shall ensure, after input from bond counsel,
compliance with any bidding requirements set forth by the IRS regulations.
g) In determining the issue price for any advance refunding issuance, the Coordinator shall obtain and retain issue price certification by the
purchasing underwriter at closing.
h) After the issuance of an advance refunding issue, the Coordinator shall ensure timely identification of violations of any federal tax
requirements and engage bond counsel in attempt to remediate same in accordance with IRS regulations.
- Continuing Disclosure. The Coordinator shall assure compliance with each continuing disclosure certificate and annually, per continuing disclosure agreements, file audited annual financial statements and other information required by each continuing disclosure agreement. The Coordinator will monitor material events as described in each continuing disclosure agreement and assure compliance with material event disclosure. Events to be reported shall be reported promptly, but in no event not later than ten (10) Business Days after the day of the occurrence of the event. Currently, such notice shall be given in the event of:
a) Principal and interest payment delinquencies;
b) Non-payment related defaults, if material;
c) Unscheduled draws on debt service reserves reflecting financial difficulties;
d) Unscheduled draws on credit enhancements relating to the bonds reflecting financial difficulties;
e) Substitution of credit or liquidity providers, or their failure to perform;
f) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax-exempt status of the bonds, or material events affecting the tax-exempt status of the bonds;
g) Modifications to rights of Holders of the Bonds, if material;
h) Bond calls (excluding sinking fund mandatory redemptions), if material, and tender offers;
i) Defeasances of the bonds;
j) Release, substitution, or sale of property securing repayment of the bonds, if material;
k) Rating changes on the bonds;
l) Bankruptcy, insolvency, receivership or similar event of the Issuer;
m) The consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the
Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its terms, if material; and
n) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
Date of Adoption: March 10, 2014
Reviewed: March 9, 2015; Nov. 12, 2018; Nov. 8, 2021