LEGAL COMMENT This comment Is published as a matter of by mustarhymes


									             LEGAL COMMENT

  This comment Is published as a matter of q e n e r a l tntonnation to all
W.A.$.B. members. Individual members w h e n conlronled, with a matter
of the nature dIscussed in this comment l h o u l d contult local, school.
district counsel.

               SCHOOL       DISTRICT BORROWING
                                Part I
                         I. I N T R O D U C T I O N
.\. Apt,licabilit )' of Comment
     This comment, which will be written in three parts, applies
specifically to common, unicm high school and unified school
districts operating under the district system. In general, a
school district operating under the city school system is sub-
icct m fiscal control of the city council or other" special fiscal
cmmol ~)dv as provided by la~" and is precluded, in general,
from borrowing directh' as a sch~ol district under the statutes
 herein discussed.
 }3. General Li.titatio.s o . School District Borrou,i.g
     School districts, as in the case of other Wisconsin munich
 palities, have no tmwer to borrow except as such F,ower is
 expressly given bv statute or as may. be necessarily inferred
 [mm a statute cord:erring such prover. It is therefore imperative
 that all b,or,-owing by ~'hool districts should strictly comply
 with the statuto,y provisimas pursuant to which the l~orrowing
 is being tmdertaken. Under the provisions o[ Article XI
 Section 3. of the Wisconsin Constituti~m and statutes enacted
 pursuant thereto, no Wisconsin school district can at any
 time hea~mc indebted in excess ~f the folh~wing amounts
 f~,r p,esent ~n future obligati, ms:
       1. For schoM districts which ~ffcr na less than grades 1 to
   ]2 and which at the time ~d' incurring the debt are eligible
  fi)r the highest level t,f state aids, 10~ of the valuation of
  taxable lmq~crty in the district as equalized for state purposes.
      2. I:-r all other schonl districts, 5~ , f such equalized
  valtuation of the district.
       As a general pmlmsiti~m current and unpaid expenses of
  a .sch~,)l district are not considered as an indebtedness to
  be included in determining a district's total borrmving power
  if such current expenses are offset by m~mies and assets actu-
  alh' in the treasury c~r by current revenues (taxes) in process
  ~,t' "actual collectio~.
  C. Sml.tes AFl,lic.bie to School District I}orrou'i.g
          School district b(:rr,.3wing statutes max. for ¢~tt, purp(~ses.
   bc divided into two general classes:
        1. Those providing for temporary or short term borrmving
   t~* meet the immediate expenses ~f maintaining and operating
   the district selma)Is. Sections 67.12(8) and 67.12(8a) Statutes.
       2. Those prm'iding for hmg term or more permanent b,,rr,)w-
   iugs: Sections 67.01 to 67.11 (general obligation bonds)

                                                November           1963
Section 67.12(12) (l(mg-tcrm lar(,missory n(,tes) and Chapter
25 (state trust fund hlans).
                    1I. T E M P O R A R Y B O I ~ R O W I N G
     I. Secti(m 67.08(8) Statutes
    l.lnder this section (,f tile statutes sch.,~l district Lx~ards
may horr(~w re'racy to meet the immediate CXl~Cnscs of main-
raining the sch(.ll" f(ir the current sch(.ll year. Loans made
under this statute may not extend bey(rod S'cptcmhcr 1 of thc
foll()win~ vcar and c~lnnt~t exceed in am(Junt .he-half (,{ th
csti.nated rcccipts .t" the district F.r .,q~cration and rmiintcnancc
of tile sch(.~ls filr the sch(x~l xc~lr in which tile loan is ma(tc
The cstimllted .ccci{~ts must be ccrtified by tile State Supcrin
ten(lent (if Public Instruction and the sch(.ll district clerk
"Flat' loan may hc inllde ~lt any time after the tax f-r operation
and nlaintcnancc t'(~l the current sch(J.'ll term has been voted
t . hc c.llcctcd cm the ncxt tax roll. T h e loan should not cxceed
the ~lin(~tlnt (~f direct taxes levied but unc(lllected by the sch.<ll
di.~Irict f . r .pcr~lti(.1 and maintenance For the currcnt sch(x~l
    T h e must be auth(~rizcd by pr(qwr .'csolution of the
school b~l:~rd and evidenced bv school (irdcr (ir orders of the
district clerk, c(luntersigned by the district director.
     I]orrowing under this section is frequently undertaken by
sch(x~l district hoards t(, rncct current year sch(xil district
cxpcnses (~f .pcratitm f(Jr /lie pcri(id (~t' Jul'y t<l time (if receipt
(,f' tax levv and/'(Ir aids.
    2. Secti.n 67.08(8a)
     Llnder this scction (Jr the statutcs a school district which
has become entitled to state aids, tuition revenues or taxes
which have hccn levied, but are unc(lllcctcd, may pledge or
assign all or a portion of such reventics as security for repay-
mcnt (if I.ans made for operating purlx~ses. T h e indebtedness
credited by short term loans so secured is specifically, b)' statute,
c-nsidcred as a paid or satisfied oblig~ttion for purpclses of com-
puting the school district outstanding indebiudness for borrow-
ing purposes. T h e maturity on authorized school orders e"
denting a loan tinder this section sh(~uld be fixed to c(linci.
with the receipt (if the revenues pledged but not later than the
Iollowing September 1st.
     Parts II and III of this comment will be published in the
next two issues of tile News and will deal with long-term
h . r r . w i n g by sch(Io] districts.

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