Council grants permission for CAPFA to finance charter school project; says city not liable for bonds

The Cape Coral City Council voted to authorize an interlocal agreement with the Capital Projects Finance Authority (CAPFA) that allows the authority to act as a conduit issuer so a charter school can access tax-exempt bonds for a building project.

The resolution — listed as Resolution 43-25 in the council packet — grants the authority permission to finance the project in the city and fulfills an Internal Revenue Code requirement that the project be approved by the jurisdiction where it will be located. The council approved the item on a motion and recorded vote.

Attorney: city gives permission, but is not liable

Ken Arden, an attorney with the law firm representing CAPFA, told the council the authority is a conduit issuer that helps not-for-profit organizations access tax-exempt bond markets. He said the city is being asked only to permit the financing and to provide the limited approval required under the Internal Revenue Code. “You are not issuing the bonds. You are not liable on the bonds. The bonds will be paid for by loan payments coming from the charter school to the bondholders, directly,” Arden said.

City staff said approving the interlocal does not affect the city’s bond rating and does not create financial liability for Cape Coral. Arden added that the authority cannot issue such bonds in the city without the interlocal agreement.

Vote and immediate effect

Council members moved and seconded the resolution and voted in favor; the clerk recorded the motion as carried. City staff said they expect approval to help expedite construction of a new charter school facility and noted an existing lease with the charter school runs through 2026.

Ending

Council action authorizes CAPFA to proceed with financing steps under the interlocal agreement. Staff said they will follow up with updated timelines for construction and any related administrative actions.