Sno-Isle Libraries Board Policy

Purpose

To establish guidelines for financing capital expenditures through the incurrence of debt in accordance with Washington State law.

Scope

The Sno-Isle Libraries (Library District) Board of Trustees (Board) recognizes that the use of debt financing may be an effective tool for the acquisition, construction, improvement, or enlargement of library facilities.

As described in Revised Code of Washington (RCW) Section 27.12.222 and 39.30.010, the Library District is permitted to incur indebtedness as follows:

• The issuance of nonvoter approved limited tax general obligation bonds (LTGO Bonds) for any purpose. The aggregate principal amount of the LTGO Bonds, together with the principal amount of all other outstanding nonvoter approved indebtedness, will not exceed 0.1% of the value of the taxable property within the Library District, as that term is defined in RCW 39.36.015.
• The issuance of voter approved* unlimited tax general obligation bonds (UTGO Bonds), for capital purposes only. The aggregate principal amount, together with the principal amount of all other outstanding voter approved and nonvoter approved indebtedness, will not exceed 0.5% of the value of the taxable property within the Library District, as that term is defined in RCW 39.36.015.
• The execution of nonvoter approved executory conditional sales contracts for the purchase of real or personal property (e.g. land and buildings, or furniture, fixtures, and equipment). The entire amount of the purchase price specified in such contract will not result in a total indebtedness in excess of 0.75% of the value of the taxable property within the Library District, as that term is defined in RCW 39.36.015.

The Library District may structure such indebtedness so that the interest on the debt is either tax-exempt or taxable under federal law.

In addition, the Library District, with approval from the applicable county legislative authorities, may seek voter approval2 to establish a library capital facility area (LCFA) as an independent taxing district separate from the Library District and to authorize the LCFA to incur tax-exempt or taxable indebtedness and issue UTGO Bonds. An LCFA may be used to finance the capital costs of acquiring, constructing, furnishing, and equipping a library facility to be operated by the Library District within the LCFA. The aggregate principal amount of outstanding UTGO Bonds of an LCFA may not exceed 1.25% of the value of the taxable property within the LCFA, as that term is defined in RCW 39.36.015.

*As of this policy’s 2026 updates, adoption requires the approval of at least three-fifths of those voting, in an election where the total number of votes cast is at least 40% of votes cast in the District during the most recent general election.

Implementation

The Board shall consider debt financing in conjunction with the review and adoption of the Library District’s annual budget. The Board shall authorize the incurrence of debt only by resolution adopted in the same year as the annual budget applicable to that debt. The Board resolution shall also authorize the Executive Director and appropriate Board officers to approve and execute such agreements and all other related documents for the purpose of incurring such debt and issuing any bonds.

The Library District shall obtain financing only when it deems it necessary and shall endeavor to do so at the most favorable interest rates and reasonable issuance costs.

The Director of Finance shall develop policy and procedures for the incurrence of debt and the issuance of bonds by the Library District and shall be responsible for ensuring the Library District’s compliance with all applicable Washington State and federal laws. The Director of Finance shall also be responsible for post-issuance compliance with applicable federal tax laws regarding arbitrage, arbitrage rebate, and the use of bond-financed assets, as well as applicable securities laws regarding ongoing disclosure of material information about the Library District, including audited financial statements.

Associated Policies and Laws

• RCW Chapter 21.20 — Securities Act of Washington
• RCW Chapter 27.12 — Public Libraries
• RCW Chapter 27.15 — Library Capital Facility Areas
• RCW Chapter 39.30 — Indebtedness Violations
• RCW Chapter 39.36 — Limitation of Indebtedness of Taxing Districts
• RCW Chapter 39.46 — Bonds
• RCW Chapter 39.53 — Refunding Bond Act
• RCW Chapter 42.23 — Code of Ethics for Municipal Officers-Contract Interests
• Sno-Isle Libraries Board Policy: Library Facility Ownership
• Sno-Isle Libraries Board Policy: Site Selection and Acquisition
• Sno-Isle Libraries Board Policy: Purchasing and Public Works
• Sno-Isle Libraries Administrative Policy: Debt Management Administrative Policy

Process

This policy shall be reviewed at least every four (4) years by the Director of Finance or designee, who may recommend appropriate updates. Any such recommendations shall be made to the Executive Director and other appropriate reviewers before submission to the appropriate Board committee. The committee shall review the recommendations, revise the policy as appropriate, endorse the revised policy, and forward it to the full Board for approval.

Policy History

Date approved: September 28, 2026
Next review date: 2030
Adopted: July 24, 2023