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Canutillo ISD to create nonprofit corporation to build administrative offices [1]

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Date: 2024-07-25  

The Canutillo Independent School District is creating a public facility corporation – a nonprofit corporation with the power to finance public buildings by issuing debt without voter approval – to pay for a new central office building.

The district’s Board of Trustees voted unanimously Tuesday to create the corporation, known as a PFC, after the Texas Department of Transportation in late spring purchased the main administrative building for a road expansion project to connect Artcraft Road to Interstate 10.

Though voters approved a $387 million bond measure for new schools and districtwide improvements in May, it did not include funds for a new district headquarters.

The Canutillo Independent School District Board of Trustees meets to discuss the formation of a public facility corporation, a structure that could allow the district to lease, acquire, or renovate properties in partnership with a private entity, July 23, 2024. (Corrie Boudreaux/El Paso Matters)

The PFC would be run by a board comprising three Canutillo ISD trustees and one appointed member that would make decisions for the organization – subject to school board approval.

Before issuing any bonds, the PFC would need to notify the public of its intent, and residents could petition to have it put to a vote.

Canutillo ISD communication specialist Christina Rodriguez said using PFCs is not uncommon among school districts that may be having budget shortfalls.

“How we move forward with it is still uncertain, but we wanted to have this tool in our toolbox,” she told El Paso Matters.

A PFC will allow the district to partner with a developer to construct the administrative building using funds from debt issuances such as lease revenue bonds. That allows the PFC to own the building and lease it back to the district, Arnold Cantu, an attorney working with the district, said during Tuesday’s meeting.

In exchange, the developer will be able to get tax exemptions on its own construction projects done through the PFC.

“After a certain number of years (the PFC can) sell that property to the district for $10,” Cantu said. “Think of it as sort of the financing,”

Trustees said they are still not sure with which developer they’ll partner, but board President Armando Rodriguez mentioned the possibility of working with the El Paso County Housing Authority. The authority provides affordable housing in communities within El Paso County but outside the El Paso city limits in areas such as Canutillo, Horizon and Socorro.

“We need to be careful who we’re going to be partners with to make it worth it so they don’t leave us hanging,” added trustee Blanca Trout.

Cantu said creating a PFC and using bonds issued by one will not increase taxes directly.

Still, the board could decide to raise taxes to pay for expenses incurred by the PFC.

State law allows local government entities – cities, counties, school districts and housing authorities – to create the PFCs to manage some capital improvement projects.

Trustee Patsy Mendoza said the district had previously used a PFC to acquire and remodel its current administrative building.

The El Paso Independent School District in 2015 created a PFC to finance new central offices in Downtown, repaying the bonds the corporation issued through its general fund.

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[1] Url: https://elpasomatters.org/2024/07/25/canutillo-isd-bond-public-facility-corporation-central-office/

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