Policy 4090 Implementation Procedures - Debt Management

Justification for each proposed lease transaction will be determined and documented by the Superintendent/designee. The justification should include an explanation for not recommending county financing through general obligation debt financing, current revenue, or transfer tax funding. An analysis of various financing strategies should be performed to allow for the lowest possible costs to for Board.

For each lease transaction, the Superintendent/designee will provide a projected lease payment and a cash flow statement for the life of the transaction.

The scheduled maturity may not exceed the anticipated useful life of the capital item.

Calculations will ensure that new lease transactions are within the total debt and debt service limits established within this policy.

Amortization of principal resulting in level debt service will be requested in order to match the useful life of the asset with financing.

Debt service payments will be budgeted using the actual debt service for each lease obligation. The fund to be used for repayment must be identified at the inception of the lease obligation.

The Superintendent/designee will review all lease agreements, SBITAs, and will report and/or record obligations in accordance with generally accepted accounting principles and Governmental Accounting Standards Board Statements.

Financial advisors will be selected as necessary according to state statutes and Howard County Public School System procurement policies.

All lease agreements and SBITAs will be reviewed by the Purchasing Officer, the Superintendent/designee, and legal counsel for consistency with school system policy and Maryland law before being presented to the Board for approval.