The Hawaii Association of Independent Schools is dedicated to the proposition of assisting schools to plan for and achieve financial sustainability. To that end, and drawing upon successful models in use by independent schools across the country, the association worked successfully in 2002 to amend the Constitution of the State of Hawaii to allow non-public schools to use tax-exempt bonds (called Special Purpose Revenue Bonds in Hawaii) for the financing of campus improvement projects.

The use of Special Purpose Revenue Bonds is highly recommended for those schools wishing to combine the traditional capital campaign with borrowing of funds at lower than usual rates. This approach shifts some of the financial responsibility for building costs to future generations of students, since a small portion of annual tuition revenues is used over a 15-, 20- or 30-year period to repay the debt.

Those schools seeking to use this innovative financial strategy must first seek approval from the State Legislature. HAIS is the sponsor of the SPRB program for Hawaii’s private schools and provides schools with guidance and assistance throughout the legislative process. By notifying HAIS in the Fall Semester, the school can participate in the HAIS-led legislative effort for that year.

Two steps initiate this process: the signing of the Official Intent Resolution by the school’s board of directors, and the drafting of the bill. In addition, HAIS and the school sign an agreement at the beginning of this process stipulating the responsibilities and duties for all concerned. HAIS provides templates for these documents below, for schools’ reference. These documents should be completed in collaboration with HAIS.

During the legislative season, schools work with the HAIS Legislative Team to advocate for their bill over a four month period. Once approved, these bills are signed into law by the Governor, thereby enabling the school to begin the process of bond issuance.

HAIS will then provide to the school the services of its financial services advisors who will help the school to organize its effort to enable the issuance of the bond. This process typically requires the school’s business officer to work closely with the HAIS financial services advisor(s) and takes 5-6 months. In many cases the advisors are already acquainted and working with the school well in advance of legislative approval.

Schools interested in participating in this program should contact HAIS as early as possible, to allow ample time for preliminary feasibility discussions with either an HAIS representative or one of the designated HAIS financial services advisors. During these early conversations, HAIS will educate the school – in particular the school’s board of directors and business office – about the bill approval process, the costs involved, and expected timelines.

For more information about Special Purpose Revenue Bonds, please refer to the documents below.

SPRB Bill Template

Official Intent Resolution

Special Purpose Revenue Bonds: How It Works

Why We Need Special Purpose Revenue Bonds for Private Schools in Hawaii