Bonds and Overrides. Chris Thomas Arizona School Boards Association. Karin M. Smith Heinfeld, Meech & Co., P.C. ASBA Law Conference September 9, 2015

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1 Bonds and Overrides ASBA Law Conference September 9, 2015 Karin M. Smith Heinfeld, Meech & Co., P.C. Chris Thomas Arizona School Boards Association

2 Legislative Reference Override Elections Arizona Revised Statute , Bond Elections Arizona Revised Statute

3 What are Bonds and Override? Voter approved initiatives M&O Override up to 15% of RCL Special Override up to 5% of RCL Note combined total cannot exceed 15% Capital Override up to 10% of RCL Bond Authorization varies Current outstanding bonded indebtedness cannot exceed 10/15% of debt limit

4 How long does the funding last? M&O Override 7 years, decline 1/3 in year 5, 2/3 in year 6 Special Override up to 5% of RCL 7 years, decline 1/3 in year 5, 2/3 in year 6 Capital Override up to 10% of RCL 7 years, decline 1/3 in year 5, 2/3 in year 6 Bond Authorization sale authorization must be sold within 7 years and spent within 3 years of sale date.

5 Where does the money come from? Secondary Tax Rate Amount of levy divided by the assessed valuation Is not reapproved each year by voters

6 What can the monies be spent on? M&O Override Salaries Benefits Supplies Purchased Services Typically focused around class size reduction, employee compensation

7 What can the monies be spent on? Special Override Maintenance and Operations expenses Typically support specific programs Specials Full Day Kindergarten

8 What can the monies be spent on? Capital Override Capital determination chart Technology Communication infrastructure Furniture Equipment Vehicles

9 What can the monies be spent on? Bond Funding Generally, capital equipment with a useful life of at least 5 years Acquiring or leasing school sites Technology, Furniture and Equipment (5 yr. payback) Building improvements - CIP Pupil transportation vehicles (Buses) HVAC systems entire systems Roofing systems Replacement of parking lots Lighting systems

10 How are expenses determined allowable? Voter pamphlet Capital determination Auditor General

11 New Board New Ideas? Can we change the intent of the bond or override? The State has eliminated a funding source, can we repurpose our override? The State has added a funding source, can we change the intent of our override?

12 The Election

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14 in a Nutshell Affects all elections: school board elections; legislative, congressional, city candidate elections; initiatives and referenda at state level; school district bonds and override campaigns Prohibits a person acting on behalf of a school district from using a school resource to attempting to influence the outcome of an election

15 in a nutshell (continued) Definition of influence (NEW, 2013): supporting or opposing a candidate for nomination or election to public office or the recall of a public officer or supporting or opposing a ballot measure, question or proposition including any bond, budget or override election and supporting or opposing the circulation of a petition for the recall of a public officer or a petition for a ballot measure, question or proposition in a manner that is not impartial or neutral. Question about constitutionality of this provision and part of the controversy a number of districts have found themselves in; different than Kromko standard which has been the law

16 What does prohibit Prohibits school boards from making statements or submitting arguments in favor of, or in opposition to, a ballot measure (This does not include the pro-statement required to be submitted and signed by the governing board in an override election pursuant to B. 9) Prohibits school employees, when on duty, from activities that would influence an election Prohibits the use of school property including equipment, paper, copiers, buildings, computers, etc., from being used to influence an election

17 What does NOT prohibit? Individual board members or school employees, not on duty time may exercise their free speech rights and be involved in campaigns School district employees may receive campaign information in school district accounts and mailboxes from an outside (non-school) sender Information from these accounts cannot be forwarded to outside recipients or to home accounts of employees

18 What does NOT prohibit? Outside groups, including PTOs, MAY organize and use school buildings to have meetings in support of a campaign providing those groups lease the facilities in the manner any other group would be allowed to lease. Individuals MAY exercise their free speech rights (politicking, including flyer distribution) at an event in which the public at large is welcome, providing that all groups are welcome to engage in such activity and it is consistent with district policy for such activity

19 Threshold Question: When Does Apply It applies all the time. The law makes no distinction between activity conducted prior to the board calling an election and activity conducted after the board has called for an election What would be a violation after the call, is a violation before the call

20 Contact Information Karin M. Smith Partner Heinfeld, Meech & Co., P.C ext. 327 Chris Thomas Director of Legal & Policy Services and General Counsel ASBA