EISD Bond Counsel Tom Sage provided information on the district's Public Facility Corporation to the board of trustees Sept. 10.
The action taken
The board of trustees unanimously adopted the bylaws of the PFC, which outlines the powers and purposes of the corporation and established the board of trustees as the board of directors of the PFC.
The board also set the PFC board's next annual meeting date for September 2025.
Some context
The board first discussed the creation of a PFC during a May 7 board meeting, and the corporation was officially created during a June 4 meeting.
A PFC is a nonprofit organization that allows entities such as school districts to pursue "off-balance sheet" transactions, Sage said. School districts have a number of tools to finance facilities and improvements, but only voted bonds allow districts to build something new.
Creating a PFC allows for new facilities to be bought and constructed, he said.
"When we go and vote [on] bonds and build a school, the school district owns it and you use the credit of the school district to do that," Sage said. "These are set up so local governments can pursue transactions that [a] public facilities corporation would own and then lease it to the organization."
Sage said PFCs operates like a local government corporation, including being exempt from taxation, having open records and following the Open Meetings Act. Additionally, the board of trustees in school districts who have established PFCs are almost always the board of the corporation.
Why it matters
One of the purposes the district looked at creating a PFC for was to potentially create affordable teacher housing, EISD Superintendent Jeff Arnett said.
"[PFCs] work perfectly for that," Sage said. "It's the way that affordable housing is being accomplished at this time."
However, there was pushback on affordable housing during the last Texas Legislative session, Sage said. Housing in cities created under PFCs were taking "millions and millions of dollars off of tax rolls," and school districts were suffering from that.
As a result, Sage said a law was passed to only allow favorable property tax treatment for affordable housing projects that are owned by PFCs created by a school district.
"So, this is the way to do an affordable housing project now," Sage said. "There are a number of developers that are out there pursuing these projects and they are presenting some real advantages and opportunities for school districts to provide housing for their personnel."
Also of note
Sage said PFCs are well-used across the state of Texas. Other area school districts, including Lake Travis ISD, have recently established PFCs in pursuit of providing affordable teacher housing options.
