160.160.160 Boards of education -- Powers and procedures -- Approval of Department of Education required for mortgages, leases -- Rental payments under lease. - Kentucky Statutes

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160.160 Boards of education -- Powers and procedures -- Approval of Department of Education required for mortgages, leases -- Rental payments under lease. (1) Each school district shall be under the management and control of a board of education consisting of five (5) members, except in counties containing a city of the
first class wherein a merger pursuant to KRS 160.041 shall have been accomplished
which shall have seven (7) members elected from the divisions and in the manner
prescribed by KRS 160.210(5), to be known as the "Board of Education of ....,
Kentucky." Each board of education shall be a body politic and corporate with
perpetual succession. It may sue and be sued; make contracts; expend funds
necessary for liability insurance premiums and for the defense of any civil action
brought against an individual board member in his official or individual capacity, or
both, on account of an act made in the scope and course of his performance of legal
duties as a board member; purchase, receive, hold, and sell property; issue its bonds
to build and construct improvements; and do all things necessary to accomplish the
purposes for which it is created. Each board of education shall elect a chairman and
vice chairman from its membership in a manner and for a term prescribed by the
board not to exceed two (2) years. (2) No board of education shall participate in any financing of school buildings, school improvements, appurtenances thereto, or furnishing and equipment, including
education technology equipment without:
(a) First establishing the cost of the project in advance of financing, based on the receipt of advertised, public, and competitive bids for such project, in
accordance with KRS Chapter 424; and (b) Establishing the cost of financing in advance of the sale of any bonds, certificates of participation in any leases, or other evidences of financial
commitments issued by or on behalf of such board. Any bonds, leases,
participations, or other financial arrangements shall not involve a final
commitment of the board until the purchaser or lender involved shall have
been determined by public advertising in accordance with KRS Chapter 424. (3) No board of education shall make a mortgage, lien, or other encumbrance upon any school building owned by the board, or transfer title to any such school building as
part of any financing arrangement, without the specific approval of the Department
of Education, and without the transaction being entered into pursuant to a detailed
plan or procedure specifically authorized by Kentucky statute. (4) Without the approval of the Department of Education, no board may lease, as lessee, a building or public facility that has been or is to be financed at the request
of the board or on its behalf through the issuance of bonds by another public body
or by a nonprofit corporation serving as an agency and instrumentality of the board,
or by a leasing corporation. Any lease, participation, or other financial arrangement
shall not involve a final commitment of the board unless and until the purchaser or
lender involved in same shall have been determined by public advertising in
accordance with KRS Chapter 424. No transaction shall be entered into by the
board except upon the basis of public advertising and competitive bidding in
accordance with KRS Chapter 424. (5) Rental payments due by a board under a lease approved by the Department of Education in accordance with subsection (4) of this section shall be due and payable
not less than ten (10) days prior to the interest due date for the bonds, notes, or other
debt obligations issued to finance the building or public facility. If a board fails to
make a rental payment when due under a lease, upon notification to the Department
of Education by the paying agent, bond registrar, or trustee for the bonds not less
than three (3) days prior to the interest due date, the Department of Education shall
withhold or intercept any funds then due the board to the extent of the amount of the
required payment on the bonds and remit the amount to the paying agent, bond
registrar, or trustee as appropriate. Thereafter, the Department of Education shall
resolve the matter with the board and adjust remittances to the board to the extent of
the amount paid by the Department of Education on the board's behalf. (6) Bonds, notes or leases negotiated to provide education technology shall not be sold for longer than seven (7) years or the useful life of the equipment as established by
the state technology master plan, whichever is less. Effective: July 15, 1994
History: Amended 1994 Ky. Acts ch. 288, sec. 1, effective July 15, 1994.