A weekend interview with ...
... Olga Swinson, chief financial officer for Pasco schools and secretary of the Florida School Finance Officers Association. Swinson talked with reporter Jeff Solochek about the potential impact of a recent Florida Supreme Court ruling that could change the way schools borrow money to pay for construction.
Tell me what this ruling means as far as school districts are concerned.
Basically, prior to school districts being able to use the COPs program, which is certificates of participation, the only way we could borrow money or issue bonds was through a referendum. Which meant we had to take the bond issue to the voters and say, we want to build five or whatever schools and we need this much money. Which we did back in 1973 (in Pasco).
Was that the last successful one?
Right. That's the last one we did. Since then ... what the COPs does is allow us to go to the bond market without getting voter approval.
Does that make it easier?
Well, yes, it makes it easier. First of all, you don't have to go through the whole process of putting it to a vote. And what we pledge is our 2-mill (property tax) money ... for capital projects. We pledge that source of revenue to pay for this. The ruling basically says you're not authorized to do that without getting a referendum passed.
Why is that so worrisome to school districts?
Because we have 20 schools under this program, the COPs program, in Pasco. ... We've been put under a credit watch, meaning the all the school districts (in Florida), the ratings agencies have put a credit watch. ... What worries us is that if we were doing an issue next year or even coming up, by this ruling, we would not be able to do this issue.
Without voter approval.
Right. And I don't know what happens to everything that we already have done. Like I said, we have 20 schools that have been built through this program. But I do know that any future financing has been put on hold. ...
When you talk with other finance officers around the state, do you find that they are also involved heavily in COPs programs?
All of the growing districts that need to build schools, this is the way that we borrow the money.
So it may just fall back on voters at some point to say, 'Yes we need a school.'
And I'm gathering from the nervousness I'm hearing around the state that that's not necessarily a good thing.
Well, basically what we would have to do is go out to the voters ... and say we need you to approve the referendum so we can borrow the money. It's the time commitment that you have to do to get the referendum. It's not just putting it on the ballot. You have to basically do a campaign for it, why you need it. Let's say we had to do one. I'm not even sure we could get it on the Jan. 29 ballot. ... You have to follow those rules. And to be honest, we don't know. All of the school districts have been using COPs as the way to borrow money. None of us have done a general referendum in a long time. ... The only one I've been involved in is the sales tax referendum, which will be very similar to us doing a general obligation referendum.