Can Any Operating Costs Be Funded With Bond Proceeds?

FAQ 14

Can Any Operating Costs Be Funded With Bond Proceeds?

The short answer is “no.”

The Proposition 39 school bond amendments to the California Constitution specifically provide that bonded indebtedness incurred may be used for specific school facilities projects approved in the bond measure for “construction, reconstruction, rehabilitation, or replacement of school facilities, including the furnishing and equipping of school facilities, or the acquisition or lease of real property for school facilities … on or after the effective date of the bond measure… .”

On November 9, 2004, the California Attorney General issued Opinion No. 04-110 that answered this question:

“May a school district use Proposition 39 school bond proceeds to pay the salaries of district employees who perform administrative oversight work on construction projects authorized by voter approved bond measure?”

The answer: “A school district may use Proposition 39 school bond proceeds to pay the salaries of district employees to the extent they perform administrative oversight work on construction projects authorized by a voter approved bond measure.”

While it is permissible for bond funds to pay for some overhead costs of the school construction bond program, such as employer pension contributions and office space and costs for the construction staff, the CBOC should monitor such costs to be sure that the construction program is not overcharged.

 

https://www.bondoversight.org/california-bond-oversight-committee-faq/