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K-12/Charter School Finance

Over several decades we have accrued significant experience in kindergarten through twelfth-grade education finance. Our practice extends from public schools, which include the emergence of charter schools during the past two decades, to private schools. These financings require an understanding of per-pupil funding models and various state approaches used to determine state and local funding amounts. We have an appreciation for the significant planning and establishment of priorities inherent in school finance.

We help school clients understand the constitutional and statutory limitations prevalent in the area of school finance, as well as the debt authorization and property tax processes that typically involves voter approval. Additionally, we draft legislation and participate in the state legislative processes to enhance the security for school bonds and establish new sources of funding for school facilities.

We assist with the financing of facility acquisition, construction and renovation, energy improvements, technology equipment and instructional software, and transportation systems. We are experienced in every type of debt instrument used in education financing, and are also experienced in utilizing New Markets Tax Credits in school financings.

Charter Schools

For more than 20 years, Kutak Rock has delivered innovative, timely and cost-efficient solutions to charter schools across the U.S. With 18 offices located coast-to-coast and a corps of dedicated attorneys focused on helping structure tax-exempt financings, we have the experience, bench strength and geographic reach to help charter schools realize their full potential.

We recognize the charter school operator’s need to provide competitive facilities and cutting-edge programs to successfully educate students in today’s challenging economic and political environment. The firm’s National Charter School Group, comprised of deeply experienced and passionate attorneys, delivers legal service that is scalable, accessible and affordable. We have been providing sophisticated legal assistance to charter schools across the U.S. since the mid-1990s, assisting them in finding innovative, timely and cost-effective solutions to their charter school facilities’ financing needs.

The firm has provided legal services in more than 500 charter school financings. We have also participated in New Markets Tax Credit financings to benefit charter schools and have used our technical skill to combine the proceeds of both types of financings with historic tax credits, HUD loans, and grants from federal, state, municipal and private sources. The proceeds from these types of transactions help charter schools finance classrooms, athletic facilities, auditoriums for fine arts performances and other uses, libraries, outdoor play environments and laboratories, as well as infrastructure and technology improvements that they otherwise may not have been able to afford.

Public Schools

We help public schools plan the financing of construction, renovation and improvement of school facilities, the implementation of new technology in classrooms, improved funding for educators and other financing needs.

Drafting ballot questions is a core strength of our group, and we understand the constitutional and statutory provisions that affect ballot questions. We help formulate and draft ballot questions by focusing on the purpose of the ballot issue and how to best communicate the purpose to electors through clear language that meets constitutional and statutory requirements.

Public school financings range from general obligation bonds to various forms of lease transactions, including certificate of participation financings. At the state level we serve as bond counsel in the structuring of short-term borrowing programs for public schools and in the establishment of school grant programs to address safety hazards and health concerns in school facilities, to relieve overcrowding, and to incorporate technology into the education environment.

Independent Schools

We serve as bond counsel, issuer’s counsel, bank counsel and borrower’s counsel in connection with tax-exempt financings for independent schools throughout the nation. We have experience structuring sophisticated and flexible transactions, including the creative use of multi-modal rate structures and variable amortization schedules, to accommodate particularly complex financings. Our extensive experience allows us to carefully advise and counsel private schools regarding the opportunities and limitations associated with a tax-exempt financing.

We have a solid understanding of the Internal Revenue Code provisions that allow government agencies to issue private activity bonds on behalf of independent schools. Section 501(c)(3) nonprofit organizations, including independent schools that are nonprofit organizations, are allowed to use those bond proceeds to finance capital facilities on a tax-exempt basis and ultimately at a lower cost of funds when compared to conventional financing.

Tax-exempt financing can provide significant benefits to independent schools seeking to finance capital improvements, including serving as an integrated financing vehicle that can fund construction and development phases, provide long-term financing and fund future capital expenditures, all while lowering the borrowing cost to the nonprofit. Financings can be structured in various ways, including a bond offering on the public market, private placement with a bank, letter of credit-secured bond issue or three-party loan agreement.