[Busmgrs] Revisions to temporary OAR for OSCIM Program

[ELLIOTT Michael S - ODE]

Dear Business Managers,

ODE is planning on submitting the permanent OAR for the OSCIM Program to the State Board of Education at their March 3, 2016 meeting. The rules will essentially remain the same as the temporary rules that were adopted in December 2015. A copy of the temporary rules that were adopted is available here: http://www.ode.state.or.us/superintendent/priorities/4.c--new-oars-for-oregon-school-capital-improvement-matching-program---mse-edits.pdf.

The permanent rules will have several changes, based on feedback from districts and the Advisory Group, that are summarized below. The rules should be up on the State Board's website in time for the March 3 meeting:
1.      The OSCIM Program will match actual bond proceeds up to the amount of the initial commitment. This is not an issue for districts going for bonds far greater than the formula maximum. However, if a district seeks a bond that is less than the formula maximum, the OSCIM Program will not match actual bond proceeds in excess of the initial commitment.
a.      For example, if a district receives an initial commitment for $2 million and the district sells the bonds at a premium for $2.2 million, the OSCIM Program will only match the $2 million.
b.      Conversely, if the district's proceeds from the sale of the bond are $1.9 million, then the OSCIM Program can only match up to the $1.9 million.
c.      Costs of issuance are not deducted from the proceeds before the match.
2.      A district that receives a commitment, passes a bond, and meets all other program requirements may not apply for another commitment for the next three funding cycles.
3.      Subject to ODE approval, a district may use OSCIM Program funds to match a bond that also includes the reimbursement of previously incurred capital costs.
d.      For example, a district purchased land a year ago in anticipation of building a new school, and used short term financing to purchase the land. Subject to Department approval, the OSCIM Program will match a bond that includes the reimbursement of the land purchase as a use of the bond proceeds. The Department approval is to ensure that the Department is complying with its constitutional and statutory requirements
4.      A district may not use a bond that is strictly intended to refinance current general obligation debt as a basis for an OSCIM Program application.
5.      A district may not use a successful election as a basis for future OSCIM Program funds.
e.      The goal of the program is to provide incentives to local voters to invest in their school facilities. To ensure equity across time, the OSCIM Program is to ensure that funds are available for each election in a biennium. The program ensures that those districts that choose to apply for an election later in the biennium have funds dedicated to that election. If a district were permitted to use a successful election earlier in the biennium as a basis for future applications, then that would disadvantage the districts that had to wait to apply for the OSCIM Program later in the biennium.
If a district would like to comment on the proposed rules before the State Board at the March hearing, you can review the testimony and comment procedures here: http://www.ode.state.or.us/search/page/?id=3185.

Thank you,
Michael


Michael Elliott
State School Fund Coordinator | Office of Finance & Administration|School Finance & School Facilities| Oregon Department of Education
Office: 503.947.5627 | Fax: 503.378.5156 | *michael.s.elliott at state.or.us




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