The creation of a Public Facility Corporation in Eanes ISD would open up avenues for the district to potentially lease and maintain affordable teacher housing alongside creating other facilities that benefit Eanes, according to Samantha Rachlin of Hunton Andrews Kurth LLP.

Rachlin and Chris Scott, Eanes ISD chief financial officer, discussed the formation of a PFC during the board of trustees study session May 7.

The details

Per agenda documents, the Texas Local Government Code authorizes sponsors to create PFC’s to facilitate the financing, acquisition, construction and equipping of public facilities.

In this case, Rachlin said, Eanes ISD would be the sponsor, and the board of trustees would act as its governing board. Potential facilities could include administrative offices, education buildings or affordable teacher housing, which she said is “growing more common.”

“The PFC is allowed these broad powers that give them the opportunity to quickly take action, sponsoring board approval, for projects that are authorized and that the sponsoring entities sees as a public benefit,” Rachlin said.

The breakdown

As outlined in the agenda documents, a PFC’s typical structure is:
  • The PFC holds the title to the land and public facilities and leases them to a sponsor
  • The PFC issues lease-revenue bonds on behalf of the sponsor
  • The PFC and sponsor enter into a lease-purchase agreement where the sponsor makes lease payments until the bonds are repaid
  • The PFC then transfers the title to the sponsor
“I think that's the important thing to keep in mind, is that we do not want to put our funds at risk,” Scott said. “This is this vehicle gives us an opportunity to make the partnership where that can be done where, yes, there are riskier bonds, but it's not our risk.”

Why it matters

Scott said that while the PFC can be used in many advantageous ways, they’re currently focused on the staff housing issue.

“The impetus for having this discussion at all is our ongoing discussions about affordable housing for staff members,” Scott said. “One of the things that we're looking at is partnering with some organization that will perhaps purchase or build portable housing and make it available to our staff, and this would afford us the opportunity to kind of structure that in a way that's related to the district but not actually going to be a financial burden on the district.”

Scott also clarified that should the board form a PFC and move forward with a housing option, it is likely that a management group will be brought in to manage the property so the board doesn’t become “the landlords for our employees,” to Board President James Spradley’s point.

Did you know?

The Lake Travis ISD board of trustees recently discussed the formation of a PFC to offer rent- and income-restricted housing to its district staff, and may vote on creating the corporation at its May 15 board meeting.

“It is interesting that we're not alone in looking at PFCs, specifically for staff housing, because as we know, it's so expensive to live in our community,” EISD board member Heather Sheffield said. “So anything we can do to support our staff would be something that I think we should look into.”

Looking ahead

While no action was taken and no projects are currently planned, the board could decide on creating the PFC at a future meeting.