Capital Funding Policy 210.09
Series: 200 Administrative Services
Section: Accounting and Auditing
It shall be the policy of Johnson County Community College to identify all viable sources of capital funding and to select, for each project, the method of funding which best meets the needs of the college. The college has at its option the following sources for capital funding.
The college may fund capital improvements on a pay-as-you-go basis from the cash reserves or current budgets of the college.
2. Capital Outlay Fund
The college may create a capital outlay mill levy, not to exceed two mills as provided for under the authority of K.S.A. 71-501, to fund capital improvements. This levy may be used to fund debt service repayments associated with building bonds or allowed to accumulate until sufficient balances exist to fund the capital improvements.
3. General Obligation Bond Fund
The college may issue general obligation bonds and create a general obligation bond mill levy, as provided for under the authority of K.S.A. 71-501, to fund capital improvements. The bond proceeds would be used to fund the capital improvements, and the mill levy would be used to secure the debt and repay the bond holders.
4. Revenue Bonds
The college may issue revenue bonds to fund capital improvements in its auxiliary enterprise areas, as provided for under the authority of K.S.A. 76-6a15. The bond proceeds would be used to fund the capital improvements, and the revenues from the operation of the auxiliary enterprise would be used to secure the debt and repay the bond holders.
5. Certificates of Participation
The college may issue certificates of participation, under the authority of K.S.A. 71-201, to fund capital improvements. The proceeds from the sale of the certificates would be used to fund the capital improvements. The issue documents would include a lease agreement against the capital improvement to secure the debt. The college would schedule lease payments into its annual budget each year.
6. Lease Purchase Agreements
The college may enter into lease purchase agreements to fund capital improvements. The lender would require collateral, such as the capital improvement itself; and the college would schedule lease payments into its annual budget each year.
7. Cooperative Agreements with Business/Local Government
The college may enter into a cooperative lease agreement with a business and/or local government to fund capital improvements. For example, the college could lease land to a city in exchange for the city issuing Industrial Revenue Bonds which would be used to fund construction of a capital improvement. The city would then lease the facility to a third party who, in turn, would sub-lease part of the facility to the college. At the end of the lease period, ten years or however long the bonds are outstanding, the facility would belong to the college.