Bank Loans Permissible?
Are school districts required to borrow funds only from the Board of Investments rather than from a bank?
No. Trustees are authorized to pledge revenue from building reserve fund levies for up to 5 years persuant to 20-9-503, MCA. This statute does not state the loans can only be obtained from the Board of Investments. The Municipal Finance Consolidation Act, 17-5-1601, et. seq., MCA., was enacted by the legislature in 1983 and provides that the Board of Investments "foster and promote...the provision of efficient capital markets and facilities for borrowing money by eligible government units (this includes school districts) to pay for capital improvements and other needs as otherwise authorized by law." Using this financing mechanism is voluntary on the part of eligible government units. 17-5-1607, MCA.
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