Glossary of Terms

Alternate Bonds
Technically, a revenue bond that is not subject to statutory debt limitations. They are considered a “double barreled” bond in that a defined revenue stream with 1.25X debt service coverage is required. For practical purposes this could be the Operations & Maintenance Levy. Further security is provided by an unlimited general obligation tax pledge.

BINA (Bond Issuance Notification Act) hearing
This hearing is required prior to issuing a non-referendum bond. The hearing is called by the Board or Board President. It is advisory hearing only, and cannot stop the bond issuance. The notice of the BINA hearing must be published 7-30 days in advance of the hearing. Seven days must pass after the hearing before bonds can be sold.

Bonding Capacity (School District)
For a dual district, it is 6.9% of EAV. For a unit district, 13.8%. Bonding capacity is subject to several exceptions that include
1. Passing a referendum by a 2/3 majority (allows issuance up to 15% of EAV).
2. For the local share of an approved CDB construction project.
3. Working Cash Fund Bonds and Funding Bonds allow the district to exceed bonding capacity.
4. Alternate bonds, since they are paid from a revenue source, are not subject to statutory bonding capacity limitations. In most cases, you must gain back capacity prior to issuing additional bond.

Debt Service Extension Base (DSEB)
The annual debt service (total principal and interest) that can be levied for Limited Tax Bonds in tax-capped counties. It is based on the non-referendum debt of the district for the year in which caps were voted in.

Limited Tax bonds
Authority that is given to tax-capped districts to sell certain types of bonds. Specifically, FP/HLS, Working Cash, and Funding bonds.

Limited Tax Debt Certificates
A hybrid lease/installment purchase contract type of instrument that allows a school district to incur debt for tangible items. There is no separate levy.

Non-referendum bond
Approved by a board resolution. Usually entails a “back door” referendum, which requires publishing an “Intent to issue”. A petition representing 10% of the registered voters in the district (or 7.5% in the case of “Alternate bonds”) can stop the issuance.

Referendum bond
A specific project, and the total amount that may be bonded, is put to the vote at a general election.