Value Delivered:

KNN Public Finance developed a complex financing plan that allowed the Fresno Unified School District (FUSD) to build a state-of-the-art, $25 million central kitchen.
   
Strategic Implementation:

Upon advice from the State Department of Education, FUSD had been accumulating savings in its school lunch program with a plan to pool those resources and upgrade its food service operation. In an about-face, the State later told the district that its reserves were in excess of the program's allowance and must be allocated to eligible uses promptly. To further complicate matters, the district learned that USDA waivers which previously allowed for the use of these funds to buy or build facilities had been eliminated. The silver lining to this budgetary cloud appeared when FUSD determined its reserves could be used to pay for an operating lease for a kitchen facility. KNN assisted FUSD in its quest to become a member of a local Joint Powers Agency, which built the facility, then leased it back to the District, thereby creating an "arms length" relationship between the District and the leasing agency, the JPA. KNN also developed a two-series bond structure that paid for the construction costs for the new central kitchen and allowed the lease-back to be characterized as an operating lease.
   
Results:

The financing plan had to take into consideration federal restrictions on the use of school lunch funds, had to meet the State's timeline for spending the reserves the District had accumulated to build the central kitching, and had to meet all other state and federal requirements for a tax-exempt financing. KNN helped FUSD to address the complexities of the multi-layered financing plan required to apply its reserve funds to the construction of a new central kitchen.