Title
Resolution Authorizing the School Board of the Hampton City Schools to Apply to the Virginia Board of Education for Ten Loans from the Literary Fund
Purpose
PURPOSE/BACKGROUND:
The purpose of this resolution is to authorize the City's School Board to submit applications for a low-interest construction and renovation loans to Virginia's Board of Education.
Discussion:
The Literary Fund is authorized under Article VIII, Section 8 of the Constitution of Virginia as permanent and perpetual school fund to be used for public school purposes. The Code of Virginia and the Virginia Administrative Code establish public school construction and renovation through revolving loan funds as a primary purpose of the Literary Fund. The state appropriation act further authorizes the Board of Education to issue loans from the Literary Fund to local school boards that apply for loans, authorized by the locality and school board, for the purposes of a) erecting, altering, or enlarging school buildings; or b) refinancing prior indebtedness or obligations incurred by a locality on behalf of a school division which has an application for a Literary Fund loan for an approved project pending before the Board of Education.
The application was modified by several new budget language provisions, including authorization for the Board of Education to offer up to $200,000,000 in each of fiscal years 2023 and 2024, establishment of an annual open enrollment process with awards prioritized based on the local composite index of ability-to-pay, and establishment of a $25,000,000 maximum award per project (with a possible $5,000,000 add-on award for projects that will result in school consolidation and net reduction of at least one existing school). And, importantly, in today's environment of rising interest rates, the new budget language also provides that the Board of Education in consultation with the Department of Treasury, to establish annual loan rates, benchmarked to a market inde...
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