huntsville city schools proposal for monrovia school funds

8/18/2019 Huntsville City Schools proposal for Monrovia school funds

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Post Office Box 1256 Huntsville, Alabama 35807-4801

(256) 428-6800www.huntsvillecityschools.org

AN EQUAL OPPORTUNITY EMPLOYER

extremely beneficial structure for the recipient entity resulting in inexpensive, long-termobligations; and

WHEREAS, Huntsville City Schools sees an opportunity for the mutual benefit of MadisonCounty Schools and Huntsville City Schools through the assignment of Madison CountySchools’ BRAC Warrants to Huntsville City Schools in exchange for legally sufficientconsideration (in the event that Madison County Schools is otherwise unable to expend theproceeds of its BRAC warrants);

NOW, THEREFORE, the Superintendent of the Huntsville City School Board proposes thefollowing terms and conditions (of an eventual Assignment Agreement) for considerationby Madison County Schools. Upon agreement to these terms by Madison County Schools,Huntsville City Schools shall draft, or shall cause to be drafted, an Assignment Agreementby and between the Parties which shall commemorate all agreed-upon terms andconditions and which shall effectuate the transfer of consideration as contemplated herein.

1. Huntsville City Schools shall pay to Madison County Schools a balance of $5 million.

The balance of the funds shall be paid from the Board’s General or Debt ServiceFunds (or a combination of both). Unless otherwise directed by Madison CountySchools, the balance of funds received by Madison County Schools shall bediscretionary funding. In the event that Madison County Schools agrees to assign aportion of its BRAC warrants, Huntsville City Schools may pay to Madison CountySchools all or a portion of $5 million as consideration.

2. Madison County Schools shall assign all (or a portion of) its BRAC warrantsproceeds outstanding and unexpended (as of the effective date of the assignmentagreement) to the Huntsville City Schools. In the event of a partial assignment ofBRAC warrants outstanding and unexpended (as contemplated in Section 1 herein),

the Huntsville City Schools’ Superintendent may offer a prorated balance of the $5million consideration if/as agreeable with Madison County Schools.

3. Prior to execution of an assignment agreement, a copy of the same will be remittedto the Public School and College Authority for review for legal propriety andsufficiency.

4. The Agreement shall be finalized no later than May 1, 2016.

5. This Proposal is intended to be a non-binding memorandum of intent and no

obligation or other legal rights will be created between the parties, except by a dulyexecuted definite agreement.

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Signed this __________ day of ________________, 2016

_____________________________________________________Superintendent


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EXHIBIT A

RESOLUTION OF HUNTSVILLE CITY BOARD OF EDUCATION

WHEREAS, in June of 2013, the Public School and College Authority (PSCA) issued CapitalImprovement Bonds Series 2013-A and 2013-B, for the benefit of public school boardsoperating in areas of North Alabama affected by the Federal Base Realignment and ClosureAct (BRAC); and

WHEREAS, pursuant to Tax Compliance Agreements underlying the BRAC warrants, allproceeds of the warrants must be used to finance the renovation of existing school facilitiesand/or in the construction of new school facilities by the recipient boards of education; and

WHEREAS, pursuant to Tax Compliance Agreements underlying the BRAC warrants, morespecifically pursuant to Section 3.1 of Tax Compliance Agreements underlying the BRACwarrants, no less than 5% of bond proceeds must have been expended or encumbered(pursuant to binding obligations or commitments of the board) within six months of the

date of issuance, and 100% of bond proceeds must be expended or encumbered (pursuantto binding obligations or commitments of the board) within three years of the date ofissuance; and

WHEREAS, the Huntsville City Board of Education (“Huntsville City Schools”) understands

that the Madison County Board of Education (“Madison County Schools”) has not expended

a balance of BRAC funds sufficient to comply with the Tax Compliance Agreements, andmay be unable to do so by June 2016; and

WHEREAS, the debt repayment structure of the BRAC warrants requires only one-half ofprincipal repayment from the recipient Board over 20 year. This is considered to be an

extremely beneficial structure for the recipient entity resulting in inexpensive, long-termobligations; and

WHEREAS, Huntsville City Schools sees an opportunity for the mutual benefit of MadisonCounty Schools and Huntsville City Schools through the assignment of Madison CountySchools’ BRAC Warrants to Huntsville City Schools in exchange for legally sufficien tconsideration (in the event that Madison County Schools is otherwise unable to expend theproceeds of its BRAC warrants);

NOW, THEREFORE, the Huntsville City School Board authorizes the Superintendent, or theSuperintendent’s designee, to take certain actions as may be deemed necessary in order to

invite, structure, and effectuate an assignment of the Madison County Schools’ BRACwarrants to the Huntsville City Board of Education provided that the underlying agreementcontemplates the following parameters;

1. Huntsville City Schools shall pay to Madison County Schools a balance not to exceed$5 million. The balance of the funds shall be paid from the Board’s General or Debt


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Service funds (or a combination of both) and shall be received by the MadisonCounty as discretionary funding.

2. The Agreement must be finalized no later than May 1, 2016.

3. The Agreement shall contemplate the transfer of all or a portion of the Madison

County Schools BRAC proceeds outstanding and unexpended as of the effective dateof the agreement. The Superintendent may prorate the $5 million considerationallowance as deemed necessary.

4. Prior to execution of the Agreement, a copy of the same will be remitted to thePublic School and College Authority for review for legal propriety and sufficiency.

5. Prior to execution of the Agreement, a copy of the same will be remitted to LanierFord Shaver & Payne, P.C. attorneys for review for legal propriety and sufficiency.

6. Subsequent to execution of the Agreement, the Chief Financial Officer will report tothe Board in open session, all substantial terms of the Agreement. A copy of thesame will be posted to the Board’s website in the same manner as other agreements

of this nature.

Signed this __________ day of ________________, 2016

_____________________________________________________Board President

_____________________________________________________Board Member

_____________________________________________________Board Member

_____________________________________________________Board Member

_____________________________________________________Board Member

huntsville city schools proposal for monrovia school funds

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