Practice Areas: Public Finance

Public School Financings

As population growth tests your schools’ capacity limits, you must answer a most pressing question: Build now to meet demand, or wait for state funding?

Thanks to innovative and proven finance options, local school boards can improve or add to educational facilities when and where they are most needed.

Our team has developed a number of novel techniques to assist school districts in managing the tax consequences of borrowing. These techniques have included new ways of handling bond anticipation notes, variable and auction rate debt and others.

We have also worked with many school districts in the conduct of bond referenda. We have also assisted school districts in the use of Qualified Zone Academy Bonds (QZAB) to defray the costs of school construction. QZABs are taxable bonds, which do not bear interest, issued by localities meeting certain federally prescribed qualifications. Proceeds are used for qualified school rehabilitation and equipment purchases. The purchasers of these bonds are banks, insurance companies and other financial institutions that qualify to receive QZAB federal income tax credit while they hold these bonds.

McGuireWoods has served as a bond counsel in the majority of QZAB financings in Virginia, including financings by Accomack, Brunswick and Northampton counties, and the cities of Norfolk, Petersburg and Portsmouth. We have also served as disclosure counsel to QZAB financings in Chicago.

We have served as bond counsel and underwriter's counsel on hundreds of general obligation school financings in Illinois, Maryland, South Carolina and Virginia. These financings include bonds sold in public offerings; sales to government affiliated entities such as the Virginia Literary Fund, the Virginia Public School Authority, and the Illinois Finance Authority; and private placements with banks, including bank qualified financings.

We pioneered legislative amendments to the Virginia Industrial Development and Revenue Bond Act which, among other projects, have enabled localities to lease-finance school projects through their local industrial development authorities.

Many of these "subject to appropriation" lease revenue bond financings have been short-term financings used as a bridge to long-term financing. We are intimately familiar with referendum and other laws affecting each financing method. We also pioneered the use of lease-purchase and installment purchase financings for schools in South Carolina.

Representative Work

Our experience in public school finance includes school financings for nearly all of our Virginia local government clients (see Local Government Financings), as well as state level experience and experience outside of Virginia, including but not limited to:

• Charleston County Schools, South Carolina
• Chesterfield County School District, South Carolina
• Evanston Community Consolidated School District Number 65, Cook County, Illinois
• The School District of Greenville County, South Carolina
• Jasper County Schools, South Carolina
• Lexington County School District No. 1, South Carolina
• Lexington County School District No. 2, South Carolina
• McCormick County Schools, South Carolina
• Rochester Community Unit School District Number 3A, Sangamon and Christian Counties, Illinois
• Virginia Public School Authority
• Waubonsee Community College District No. 516, Counties of Kane, Kendall, DeKalb, LaSalle, Will and State of Illinois
• York County, South Carolina School District No. 1

In Illinois, we are regularly engaged for tax rate increase and bond referenda, school building bonds, limited bonds, working cash fund bonds and school fire prevention and safety bonds, as well as installment contract financings, and the refunding of these obligations on a tax-exempt or taxable basis, on behalf of school districts and community college districts.

Additionally, we counsel school districts and other local government units with respect to the impact of tax cap legislation and the tax increment finance process as it affects tax collections and school finance generally.