Special Board Mtg - Nov. 10, 2008

[Guest sullinss]

Proceedings of the Board of Trustees

District No. 2, Yellowstone County

High School District No. 2, Yellowstone County

Billings, Montana

 

November 10, 2008

 

Call to Order

 

The Special Board Meeting of the Board of Trustees of School District No. 2, Yellowstone County, Montana, and High School District, Yellowstone County, Montana, was duly held at the Lincoln Center, 415 North 30th Street, Billings, Montana, Monday, November 10, 2008.

 

Vice-Chair Joel Guthals called the meeting to order at 5:35 p.m. and led those assembled in the Pledge of Allegiance. Trustees present were Mary Jo Fox, Kathy Aragon, Joel Guthals, Malcolm Goodrich (via speakerphone), and Dawn Achten (via speakerphone). Trustees Katharin Kelker, Sandra Mossman, Peter Gesuale, and Tim Trafford were excused. Also attending was CFO Thomas Harper, and Rocky Mountain Bank President Ross Johnson.

 

Communication From the Public

 

The Board recognized the value of public comment on educational issues and the importance of listening to members of the public in its meetings. The Board also recognizes the statutory and constitutional right of the public to participate in and express opinions about issues important to the District. This part of the Board’s meeting is dedicated to public comment on any public matter that is not on the agenda of this meeting and is within the jurisdiction of the Board of Trustees. Members of the public may also address particular items on this agenda either now or at the time the Board considers the particular item.

 

There were no public comments.

 

Qualified Zone Academy Bond (QZAB) Program – Adopt Resolution Relating to Limited Obligation School Building Bonds, Series 2008; Authorizing the Issuance and the Negotiated Sale Thereof and the Execution and Delivery of Documents Relating Thereto

 

This item pertains exclusively to the Elementary District. Thomas Harper stated the Budgeting For Results Committee recommended the District pursue opportunities through the Qualified Zone Academy (QZAB) Program. This is a Federal program that lends interest free money to qualified schools for: 1) renovation and repair of facilities, 2) equipment and technology, 3) curricula development, and 4) teacher training. Each school borrows individually and qualifies if 35% or more of the students are eligible for free or reduced price school lunch. OPI administers this program and is offering an allocation of $773,250 to the next District on the list. These bonds will be sold to a third party who receives a tax credit in lieu of interest. Thomas and Rich Whitney put together a list of energy related projects at Beartooth Elementary, Washington Elementary, and Riverside Middle School that will have a relatively quick pay back on 1-10 year bonds. Rocky Mountain Bank is prepared to act as the bank for these bonds.

 

This Board is being asked to adopt the Resolution Relating to Limited Obligation School Building Bonds, Series 2008: Authorizing the Issuance and the Negotiated Sale Thereof and the Execution and Delivery of Documents Relating Thereto. The resolution is as follows:

 

RESOLUTION RELATING TO LIMITED OBLIGATION SCHOOL BUILDING BONDS, SERIES 2008; AUTHORIZING THE ISSUANCE AND THE NEGOTIATED SALE THEREOF AND THE EXECUTION AND DELIVERY OF DOCUMENTS RELATING THERETO

 

BE IT RESOLVED by the Board of Trustees (the “Board”) of School District No. 2 (Billings), Yellowstone County, Montana (the “District”), as follows:

 

Section 1. Authorization. The District has determined that it is desirable and appropriate to authorize the issuance and sale of limited obligation school building bonds of the District in the principal amount of $773,250 for the purpose of paying all or a portion of the costs of improving, repairing, or rehabilitating Beartooth Elementary School, Riverside Middle School, and Washington Elementary School by replacing, upgrading, adding, or repairing heating, air conditioning, and ventilation units and related controls; boilers and hot water systems; windows; related improvements; and paying all or a portion of the costs associated with the sale and issuance of the bonds (collectively, the “Project”). The District has determined that it is in its best interests to proceed at this time with the issuance of the bonds designated limited obligation school building bonds in the amount of $773,250 (the “Bonds”). Costs of the Project in excess of the amounts available from the proceeds of the District Bonds will be paid from amounts on hand or available to the District.

 

The Board has determined it is in the best interests of the District to issue the Bonds under Section 20-9-471, M.C.A., to the Board of Investments of the State of Montana (the “BOI”). The Board hereby finds and/or acknowledges the following: (i) the proceeds of the Bonds will be used to finance all or a portion of the costs of improving, repairing, or rehabilitating Beartooth Elementary School, Riverside Middle School, and Washington Elementary School by replacing, upgrading, adding, or repairing heating, air conditioning, and ventilation units and related controls; boilers and hot water systems; windows; related improvements; and paying all or a portion of the costs associated with the sale and issuance of the bonds, (ii) the term of the Bonds will not exceed 10 fiscal years; (iii) there exists an amount in the budget of the District for the current fiscal year available and sufficient to make debt service payment on the Bonds in the current fiscal year ending June 30, 2009, and the District covenants to provide in the budget of the District for each following fiscal year in which any portion of the principal of or interest, if any, on the Bonds is due an amount sufficient to pay the principal of and interest, if any, on the Bonds in such year; (iv) the Bonds are payable from any legally available fund of the District; and (v) the principal amount of the obligation, when added to the outstanding bonded indebtedness of the District, may not exceed the District’s debt limitation under Section 20-9-406, M.C.A. The District finds it has full power and authority to issue the bonds.

 

Section 2. Authorization of Bonds. For the purpose of paying costs of the Project as authorized in Section 1, it is hereby determined that it is in the best interests of the District and the owners of taxable property therein for the District to sell limited obligation school building bonds of the District, pursuant to Section 20-9-471, M.C.A., as amended, to the BOI. The Bonds shall be denominated “Limited Obligation School Building Bonds, Series 2008,” and shall be issued as hereinafter provided.

 

Section 3. Sale of Bonds; Purchase Agreement. This Board hereby preliminarily authorizes the District to sell the Bonds at a private negotiated sale to the BOI, with the understanding that the BOI will pledge and assign its interest in the Bonds to the holders of its Municipal Finance Consolidation Act Bonds, Series 2008 (Billings Schools Qualified Academy Zone Program), to be issued in the principal amount equal to the Bonds (the “Board’s Bonds”). The Bonds will not bear interest. It is acknowledged that other terms of the Bonds, e.g., the purchase price of the Bonds and the Board’s Bonds, the principal amount of the Bonds and the Board’s Bonds, and the maturity schedule of the Bonds and the Board’s Bonds have not been determined as of this date. The Chairman, the Vice Chairman, the Superintendent, the Chief Financial Officer, and the District Clerk, or any one or more of them, are hereby authorized to approve:

 

(i) the purchase price of the Bonds; provided that the purchase price equals or exceeds the principal amount of the Bonds;

(ii) the principal amount of the Bonds; provided that such principal amount is not in excess of $773,250;

(iii) the maturity schedule of the Bonds; provided that the Bonds mature at any time or times in such amount or amounts not later than 10 fiscal years after the date of issuance of the Bonds; and

(iv) the provisions for redemption of the Bonds.

 

Upon approving such terms, the Chairman, the Vice Chairman, the Superintendent, the Chief Financial Officer, and the District Clerk, or any one or more of them, are hereby authorized and directed to approve, execute and deliver to the BOI an agreement evidencing the purchase of the Bonds (the “Purchase Agreement for the Bonds”), containing the agreement of the District to sell, and the agreement of the BOI to purchase, the Bonds on the terms so approved, and containing such other provisions as such officers deem appropriate, and to approve, execute, and deliver to Rocky Mountain Bank, in Billings, Montana, as purchaser of the Board’s Bonds (the “Purchaser”), an agreement evidencing the purchase of the Board’s Bonds, or other purchaser of the Board’s Bonds (the “Purchase Agreement for the Board’s Bonds”), containing the agreement of the District to the pledge and assignment of the Bonds by the BOI to the repayment of the Board’s Bonds and to the sale of the Board’s Bonds on the terms so approved, and containing such other provisions as such officers shall deem necessary and appropriate. In the event of the absence or disability of any of the Chairman, the Vice Chairman, the Superintendent, the Chief Financial Officer, or the District Clerk, an authorized member of the Board of Trustees, the acting Superintendent, the acting Chief Financial Officer, or the acting School District Clerk shall make such approvals and execute and deliver the Purchase Agreement for the Bonds and the Purchase Agreement for the Board’s Bonds (together, the “Purchase Agreements”). It is acknowledged that the Purchase Agreements may be one document. The execution and delivery by two appropriate officers of the District of the Purchase Agreements shall be conclusive as to the approval of such officers of the terms of the Bonds and of the arrangement whereby the BOI will pledge and assign the Bonds to repayment of the Board’s Bonds.

 

The form of the Bonds and the other security therefore shall be prescribed by a subsequent resolution to be adopted by this Board.

 

Section 4. Other Agreements. The Board’s Bonds are proposed to be offered for sale with the assistance of North by Northwest Capital, Inc., financial advisor to the District, to the Purchaser for the Purchaser’s own account. Details regarding such things as the appointment of U.S. Bank National Association, as bond registrar, transfer agent and paying agent (the “Registrar”), and payment of funds into the Sinking Fund established by the BOI and the administration of that fund are expected to be set forth in a Fiscal Agency Agreement between the District, the BOI, and the Registrar. The District may enter into such other agreements with third parties as necessary or appropriate to facilitate or implement the sale and issuance of the Bonds or the transactions contemplated herein, so long as the limitations of the first paragraph of Section 3 are satisfied (such agreements, together with the Fiscal Agency Agreement, collectively, the “Operative Agreements”). The Chairman, the Vice Chair, the Superintendent, the Chief Financial Officer, and the District Clerk are hereby authorized to negotiate, approve, execute, and deliver such Operative Agreements, so long as the limitations of the first paragraph of Section 3 are satisfied. In the event of the absence or disability of any of the Chairman, the Vice Chair, the Superintendent, the Chief Financial Officer, or the District Clerk, an authorized member of the Board of Trustees, the acting Superintendent, the acting Chief Financial Officer, or the acting School District Clerk shall make such approvals and execute and deliver the Operative Agreements. The execution and delivery by two appropriate officers of the District of the Operative Agreements shall be conclusive as to the approval of such officers of the Operative Agreements in accordance with the provisions of this resolution.

 

Section 5. Approval of Comprehensive Educational Plan. There has been presented to this Board a Comprehensive Educational Plan prepared by staff of the District (the “Plan”) that meets the requirement of Section 54E of the Internal Revenue Code of 1986, as amended (the “Code”). The Plan is hereby approved and adopted. Besides furthering the educational objectives of the District, the Plan will also permit the Bonds to be issued without bearing interest, since the Board’s Bonds will qualify as “qualified zone academy bonds” within the meaning of the Code.

 

Adopted: November 10, 2008.

 

 

Chairman of the Board of Trustees

 

Attest:

School District Clerk

 

Trustee Aragon questioned why Washington school was selected when it’s on the draft Long-term Facilities Plan to be consolidated in year 2012 with Miles Avenue on the Miles Avenue school site. Thomas stated that the Long-term Plan has not been approved; however, another qualified school can be substituted for Washington.

 

It was questioned whether we should identify these three specific schools now or have a more general identification of all qualified schools to allow Administration to further refine their selection criteria.

 

Malcolm Goodrich moved to approve the use of the QZAB funds for as much as we’re permitted to do in the particular fiscal year borrowing only as much, however, of the QZAB funds as are necessary for qualified schools in the Elementary District with attention being paid to our existing Facilities Plan that we’re developing.

 

Joel Guthals pointed out that we have an official resolution that this Board must adopt. Malcolm amended his motion to say the Board shall approve the resolution that is set forth on pages 5, 6, & 7 of our packet; but, that resolution shall be amended instead of describing Beartooth Elementary School, Riverside Middle School, and Washington Elementary School, it will say such elementary and middle schools as qualified with the final selection to be determined by the Administration with reference to the Board’s Long-term Facilities Plan. Dawn Achten seconded the motion.

 

Mary Jo prefers to have Administration come back to the Board with their recommendations for the Board and the Energy Committee to make the final selection. Thomas advised we need to get this resolution to the Board to Investments tomorrow. The way the resolution is drawn the projects need to be specifically identified at the schools and tied to specific dollar amounts; however, we can substitute another K-6 qualified school in place of Washington.

 

Board consensus was that Thomas will work with Administration to identify a substitute school for Washington and will consult with the Chair and Vice-Chair tomorrow so they can make a selection. Joel will also look at the environmental issues.

 

Voting for the motion was Malcolm Goodrich, Dawn Achten, Mary Jo Fox, and Kathy Aragon. High School Trustee Joel Guthals is ineligible to vote on this Elementary District item. The motion carried.

 

Adjournment

 

There being no further business, the meeting was adjourned at 5:55 p.m.

 

 

 

 

 

Joel Guthals, Vice-Chair

 

 

 

 

Sherrill Sullins, Recorder