Publication Date

5-2019

Date of Final Oral Examination (Defense)

2-26-2019

Type of Culminating Activity

Dissertation

Degree Title

Doctor of Philosophy in Public Policy and Administration

Department

Public Administration

Major Advisor

Gregory Hill, Ph.D.

Advisor

Stephanie L. Witt, Ph.D.

Advisor

Richard Osguthorpe, Ph.D.

Advisor

Justin Marlowe, Ph.D.

Abstract

Physical facilities are essential for Idaho public school districts to fulfill their constitutional mandate “to establish and maintain a general, uniform and thorough system of public, free common schools.1 Because these physical facilities cost millions of dollars to construct, a common and prudent means of financing them is to borrow through the municipal bond market. Accessing the bond market to obtain these needed funds is an infrequent and complex process for most Idaho school districts and the administrators who are charged with carrying out these financings. For this purpose, school administrators look to the guidance of financial professionals to assist them. Prior to 2001, administrators were required to use a competitive sale (selection of an underwriter is done through an open bidding process) to issue their school district’s bonds. Following a 2001 policy change that made it permissible to use a negotiated sale (bonds are sold to a pre-selected underwriter), 73 bonds were issued using a negotiated sale using only an underwriter (financial professional acting as the broker who buys all the bonds and resales them to investors) and with no municipal advisor (financial professional who has a fiduciary duty to their municipal client). On August 2, 2006, the McCall-Donnelly School District used a request for proposal (RFP) to select a municipal advisor (MA) and at that MA’s recommendation the District used a competitive sale to issue its bonds. This was the first competitive sale since the policy change. Since then through 2016, there were 109 bonds issued with a mix of 75 negotiated and 34 competitive sales. First, this dissertation examines, with the aid of industry best practice and past scholarly research, whether there is a fiscal impact of competitive sales compared to negotiated sales using a dataset of all 194 Idaho school district bonds sales from 2001 through 2016. Second, this research seeks to understand the decision-making process school administrators undertake to issue their bonds. This is accomplished using an original survey that was sent to the entire population of Idaho school district administrators. Ultimately, this dissertation provides insight into the effects of Idaho’s shift to more negotiated sales and why administrators choose the financing methods they do.

1 Constitution of the State of Idaho; Article IX: Education and School Lands; Section 1. Legislature to Establish System of Free Schools.

DOI

10.18122/td/1516/boisestate

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