001order at 5:30 p.m. If you would join us for the pledge, if you would so choose. >> I pledge algiance to the flag of the United States of America and to the republic for it stands one nation under God, indivisible with liberty and justice for all. All right. The first item on the agenda is budget capital projects plan and bus replacement plan. The first item to be discussed is the proposed 2026 budget. Mr. Herbert. >> Thank you, Mr. Cherry. um going to go over a couple of different forms here this evening uh and just kind of give some general ideas about the direction for the budget for the upcoming year. Uh so kind of walk through a little presentation that we have. Um first want to start with just a general review of school funding.
002Uh I think it's important that we uh emphasize that that all the dollars that we have here in the district are really kind of in silos. Uh and what we're going to be talking about tonight are really just the four main silos that we use uh a predominant amount of our dollars for uh and receive revenue into. So uh those four funds uh are going to be obviously the education fund. Uh we use that for salaries, benefits, supplies. Uh I typically like to say think of anything that's inside the classroom. That's what the education fund is going for. Uh we will look at the next one would be the debt service fund. This is primarily funded through our local tax dollars. Um these are going to be dollars that are used to pay our bond
003payments or lease payments. Uh so for that is typically when we are looking at the projects that we've been uh managing over the last several years uh the bonds we've issued in order to be able to complete those projects. That's where those payments are coming from. Uh the next one would be the operations fund. Uh easiest way to describe your operations fund is think of everything that was inside the classroom that the education fund pays for. This pays for everything else outside of that. Uh so primary examples of that would be uh transportation department, our SRO's or our police department, uh insurance, custodians, custodial supplies, um and different things like that. Uh then finally, we have the rainy day fund. So this is where we have just our our just in case dollars. Uh these
004are typically one-time expenses. Uh I can tell you that since the time I've been here in Danville for almost five years now, we have never spent any of our rainy day fund. So uh we continue to hope that that progresses in that direction. That's a good thing. Um and also just to keep in mind that uh the biggest uh I think misconception with these are that as these funds are put into these silos, we typically for the most part cannot transfer and move things from one to the other. There are some exceptions uh when we talk about like our transfer from our education fund to the operations fund. that is a permissible event uh that we are allowed to do and that we typically do take advantage of on a monthly basis. Uh but really
005more like the debt service fund those dollars that we are using to pay our bonds to pay our our essential mortgages uh we are not allowed to use those for other things. Uh, and I think a lot of times, uh, the community, uh, drives through our campus, they see all of the work that we're doing, uh, and they think that we do have, uh, several dollars or a lot of dollars that we could spend on, uh, say teacher salaries. And unfortunately, that's just not the case. Uh, because those dollars are restricted to the bond payments only, which are then tied into uh, the construction projects that we've been doing over the years. Uh so again, just want to kind of hit on that really quick. Uh just kind of the review of the school budgeting.
006So like I said, we're going to talk about these four funds tonight. Uh some of them a little bit more in depth than others. Uh but we'll kind of go from there. So uh this evening, what we're what really the budget is doing for the next year. Uh and once we get through this evening's hearing and then we will have another formal uh meeting or agenda item at our next public public board meeting is where you as the board will approve our budget for the next year. Uh but really what that's doing that's giving us the authority to spend the dollars but not necessarily the ability to spend the dollars. There is a difference there. Uh and as Dr. Schaefer would famously say, there might be times where we have the ability to retire, but
007maybe we don't have the funds to retire. So, that's kind of what we're thinking about here. Um, this will again give us the authority to spend up to a dollar amount that we have set in our budget. Uh, it gives us parameters and guidelines to kind of help stay within those and maintain those. But at the end of the day, if we don't have the dollars, then we we can't spend them. uh we could have the authority to spend whatever that dollar might be, but if it's not in our bank account, we can't spend it. So, that's kind of the premise behind what we're going to talk about tonight, too. Um I'm going to jump into uh both the revenue side and the expenditure side for these four funds. Uh so, first one is the
008revenue side. This is form two. Uh this is what would be uh and I I'll back up one step there. So you have really several different forms uh that as part of the budgetary process through the DLGF we have to complete. Uh once we complete them we upload those to gateway which is the uh I guess the what the word is the database where all of this is housed uh that is open to the public that they can uh go in and they can see a lot of different reports here for not only our school district but for all government entities. So, form two, uh, and I know it doesn't make sense that form two is revenue and form one is expenses, but, uh, they've yet to get that one figured out. But we're going
009to do revenue first, uh, with form two. Uh, so, as we look here, this is just a a chart to kind of show what revenues have looked like. And this is just in the education fund. It does say general education. Uh because if you remember prior to 2019 uh we did not have an education fund. We just had a general fund. Uh in 2019 there were some legislative changes uh that came through that uh kind of differentiated or made the way that we track these dollars and the funding that we have. Uh broke it up a little bit different kind tried to make it a little more um transparent as far as what's education and what's more operations. Uh in the past there was a CFP which is a capital um plan or capital uh
010fund. There was a bus transportation fund. A lot of those were just rolled into the operations fund. So that's why we have general and education fund here. But here you can see uh this chart shows what our uh projected revenues are going to be here for the rest of the year along with uh the line is the ADM count that we are foreseeing uh coming through. I will say that today was our uh official count day. So, we are working on getting those numbers kind of finalized here uh and making sure that we can uh know where we are to to move forward. Uh in the past, the count day was on September 15th. Um so, they bumped it back 15 days or so. Uh really, it it doesn't have that big of an impact
011on us because we still have a decent idea on where we're going to end up. Um the wrong direction. There we go. Here's the uh the NAV and tax history as we look back um over the last we're almost to the last 10 years here on this chart now. Uh but you can kind of see total tax rate. So as we get into tax rate discussion here this evening. Remember there are actually two tax rates that we'll be talking about. We're going to be talking about our our debt service tax rate and then we're also going to be talking talking about the operations fund tax rate. Uh so combining those two together that gives us our total tax rate that is for the district. Uh I would also like to point out that is not
012uh the total tax rate for each individual or each individual parcel owner. That is just the schools part of the total tax rate or the encompassing tax rate that you as a homeowner would be paying. So this is just our portion. Uh you can see that over the last several years it's continued to go down. Uh we've really worked hard on that. Uh also with the increase in the net assessed value uh is a main driver that's given us the ability to not only continue to lower our rate over the last 10 years here almost uh but give us the ability to raise the dollars through the tax um tax payments that we have used to complete some of the projects that you've seen uh and also the projects we're continuing to work on. So
013that being you know south the high school transportation some of those other things. Um our our NAV or our net assessed value for this year uh still showed growth. We were at 4.72%. Um which is a little less than uh as we've seen the last four or five years. Uh last year being almost 20%. Uh but we did still see some continued growth there. A lot of that uh impact is going to be also through Senate Bill One uh or Senate enroll Senate Enrollment Act One. Uh and we'll continue to see that play out over the next six years. uh as there's a lot of language in there that's uh going to significantly impact our net assessed value. Uh I like to just kind of show you the the doughnut counties and counties around us
014on where their net assessed values have come in. Uh as you can see here, uh these would be these county numbers are for the school districts only. So that's not including any other government entities in these in these counties. This is just the schools. Uh you can see Hendrickx County, we came in at 3.55. Uh we were second highest in the county uh behind Planefield. Uh and uh as you look through this list, you can see there's some other counties that are ahead of us. Uh some that are behind us. Uh I would like to say I'm probably glad we're not Morgan County. And I don't know if I'd rather be Morgan or Boone because Boone County as of this morning still did not have their net assessed value, which makes this whole process a
015lot more challenging to be able to get through. Uh we'll talk a little bit about the maximum lever growth quotient. Uh again, this is not changed in the last couple of years. We've talked about this. Uh this is essentially an this is only applied to our operations fund. Uh so the maximum living growth quotient is based on the six-year average of the Indiana non-farm personal income. Uh they do that calculation. Uh but it through Senate Bill or Senate Enrollment Act One and other previous enrollment acts, uh they've capped that at 4%. Uh over the past several years, the calculation for this has actually been a little bit higher. Uh but there has been legislative action taken uh that has put a cap on this at 4%. So what that means is that we take our
016levy from last year, which is the 4.759 number at the bottom there, and we can grow that by 4%. Uh so that's where we would get uh essentially where our levy would come in for this year at the 4,949 number. That's just 4% added on to our levy from last year. Uh again, we I talked a little bit about when we first started how you typically try to keep the dollars within the silos, but I did say, you know, we do have the uh the ability to transfer from the education to the operations fund. Uh so I want to kind of point out where this has been over the last couple of years uh and where we're at projected for this year. Uh this is going to kind of also get into the start of
017what we've been discussing as a board over the last several meetings uh and talking about Senate Enrollment Act One and the impact that that's going to have on us as a district. Uh because these numbers are going to start to to trend up for us. Um as you can see, uh we've specifically really tried to focus on this transfer over the last couple of years. Uh and as we were going through our whole general obligation bond process where we were trying to again offset our operational uh expenses kind of move those over to the debt service fund and then therefore reducing this transfer to help leave dollars in the education fund so that we can then take that and pass it on to our teachers that we can get the dollars into the classrooms which
018is where we need to really focus on getting those dollars. uh it's going to make uh the the the future uh a lot more challenging to be able to do that uh because we're going to have to start transferring more dollars from our education fund to our operations fund to be able to cover the expenses that we have there. Uh and we'll kind of see that as we go forward. Uh so here's form two. Um and just kind of a comparison uh where we've been over the last several years. Uh this would be the revenues that are coming in. Uh I would also like to point out that excuse me these numbers do not include the tax dollars that are coming in. Uh so when you look at your debt service fund for example uh
019for 2026 we're forecasting or budgeting 934,000. Uh that's obviously just miscellaneous revenue. That does not include the levy that we will levy uh for that fund and we'll get to that here in a minute. Education fund because again it is solely driven on state tuition support. uh there are no tax dollars that go into the education fund. So that is the true uh amount of revenue that we will have coming into that uh through the state tuition support and through miscellaneous revenue that we have there. And then the operations fund uh the 4.76 uh is primarily driven through the transfer from the education fund to the operations fund. And then there are some other other uh miscellaneous revenue uh things that we've uh talked about in the past. uh there is the local income tax
020goes into that fund. Uh we also have the interest that we earn from our accounts go into that fund. Uh and so that's where those primarily are coming from. Uh you can see there is a uh we'll call it a significant increase uh a 17 almost 18% increase from 25 to 26 in this fund. Excuse me. That is heavily to do with the amount of transfer that we're going to have to increase from our education fund to our operations fund. Uh as we get now we'll go back to form one which would be the expenditures. Uh again just a comparison on where we have been in the past and what we are looking into the future. Uh again, I'd like to also point out that uh these dollars and and I know we've had a
021lot of conversation specifically around our operations fund and about reducing that. Uh as you can see the this dollars there is not a reduction there. Um but we have significantly looked at that uh at the operations fund. Uh we have made reductions in that. However, uh there are other things that are beyond our control uh that are still increasing in costs. uh a lot of those being utilities, uh those being insurance, those being uh there is a little bit of I would say a buffer in here uh to try to do a little bit of an increase for our staff uh because obviously we've always tried to uh look and see what we can do for our teachers and try to do something comparable uh to all of our classified staff. Uh so that that
022is budgeted in here for a minimal increase uh for this uh upcoming year. Uh but again, I also want to point out that this is just kind of setting that top limit. Uh if we do not have the dollars, then obviously we will not be able to do uh as much as we can. And I also say we're going to be continuing continually working throughout the year to try to reduce the expenditures that we can in there. Um I was talking to Dr. Schaefer earlier today and you know if you think about we had talked about the roughly 300,000 of secondary priority or second priority expenditures that we have in our operations fund and how we were trying to reduce that by about $250,000. If you look at this number uh and just think from
023a a 9 million and and let's just look at it 9,300,000 the increase that is coming from just the 9 million and again what I've just talked about is utilities the insurance costs just personnel costs um you know we have seen a little bit of an uptick in our transportation department uh as far as cost which this is a good thing because we've actually hired a couple more drivers uh here recently and we would like to hire several more drivers. So, that's all going to come with cost. We also have to keep in mind uh that as we look through our projects and how our projects are starting to develop, South Elementary is now 100% complete. Uh that was an addition of about 26,000 square ft that we are now going to have to service
024from a custodial standpoint. Obviously, there's going to be more uh utility cost to run a bigger building. Uh and there's just further more expenditures that come uh with our buildings as they start to increase in size. Uh and so we, you know, we've got to continue to make sure that we maintain those buildings uh to the highest level that we can because at the end of the day, it all comes back to the students and that's where they're at. So, oh, do you have a question or what you sent in on form three? This says form one. Form three is the expenditures, right? Form three. I don't let me pull up everybody. I'm only asking because in column for 20 year 2026 on form three the rainy day matches the debt fund matches the ED
025fund matches but the operations fund is off by a couple thousand. See >> so I just want to know whether I should have that in front of me or this in front of me. I assume the budget estimate is what you're >> Yeah, that's the estimate. So, let me see what I have what we actually have on the form 3335. So, I see it's off like $3,000. >> Again, it's not much, but Oh, sure. Well, it's a it's a valid question. >> I'm just trying to understand whether I should be going by your slide or what you submitted to the state. >> I don't know when you populated your slide. Is it possible you're going to change after that? >> Well, form one matches the slide, but form three. Yeah, form >> form one and
026three match. Is it is it exactly >> It's off 300. >> Yeah, it should be the three the 9335378. That's what's on form three and that's what's on form one. So, I apologize for >> that. That's what's advertised. That's what's official. >> Yeah. So, you want which one to be It would be not. Let me uh what's what's the total for operations on form one >> or on form three? >> They should match. They don't. Form three says operations budget estimate is 933533 378. And on form one the operations total is 9332128. Again, it's not much, but the >> Yeah. No, let me actually let me look at form. Let me look at the 4B because that will be >> and it hasn't been sent to the state yet. That won't happen till we approve
027it at our next board meeting. >> I'm perfectly aware of that. Thank you. So on the form 4B it's the 9332128. [Music] So that is the that's the number that will go through. Um it is advertised at the 9335378. That was what was publicly advertised. Okay. So, it cannot exceed that number. >> The ultimate key is we're submitting this to the state. They're going to review everything you submitted in forms one, two, three, and four. >> And then they're going to make adjustments and give us our budget in January. >> Correct. Right. Yes. >> So, they're the really the ones that are going to set this budget. But is what's on these forms going to impact what they do? Even if it's off by a few Yes, it will impact. But what the only thing
028they will verify is that what is on form three this one if what we approve is not more than this >> because this sets our limits that we cannot exceed what was on the form three that's been already publicly advertised. >> So if we're going to have a higher number it's better to have that one as the advertised number because it can only come down. Okay. Yeah. So, apologize for that description, but yeah, it will be the what is on this slide and what is on form three. I'm sorry, form one. number >> 332 is what's on the form one and was on form 4B. >> Oh, that okay. >> Yeah. The only place that the 335 number is on form three. Everything else is is the same number. >> Okay. Couple other things to
029mention here. Rainy day. Uh again, that is just an appropriation amount. Again, like I've said earlier, uh we have typically not had to use our rainy day funds and we hope that that continues to be the uh the process. Um we do have this earmarked for 500,000 that if something were immediate to come out, uh that we could go ahead and use the dollars up to that point. Obviously, we would let the board know, but anything that we would need to respend over the 500,000 does require an additional appropriation hearing. So we would have to come back to the board uh and go through that process which uh entails uh public notification uh and then having a hearing and then having the approval done. So uh it does uh this does allow us that if
030any emergency were to happen uh that we do have the dollars that we could access on a short-term basis for immediate needs. >> Um >> so that's money that you could spend if needed. That's not an estimate of what we hope to put into the rainy day fund. >> Correct. Yes. Yes. Uh so as we talk through this uh the next I know this is really small to see. Um I don't know if I can make it any bigger. Um so this is essentially taking this is we're in the debt service fund. Uh and so this is to look at the differences in what the potential rate impact would be on our current debt service fund. Uh the top portion is just looking at the previous or kind of the current six months that we're
031in right now. Uh so that's looking at July through December. Is that page 104B? That is should be page probably two or three. >> One should be rainy day. Two it's page two. Two is the debt service. So, as you look at form 4B at the top, that is what is at the top of this here. That makes it probably a little bit easier to see. Um, looking at the current options that we have here. If you remember, we kind of had a little a discussion last year about where uh we felt like this rate should end up falling. Um, as we look at this uh for the upcoming year, a couple different things to to look at. Uh so number one when you look at line 15 uh which is going to be line
032oh there line 15 is going to be I thought I could click on it maybe highlight it line 15 is be right under this dark line um >> that is Mr. Herbert I'm sorry but that slide is supposed to be part of my form B. Is that correct? No, that this this is just taking the form B to show you a couple of different examples. >> Okay. >> So, yeah, this >> because what we will do is the I will say that your form B >> I'm good. I couldn't read that. >> Okay. >> If I can't read that, then I was looking for it in here and you clarify it. >> I understand. >> Thank you. >> Yeah. So, the current form B that you see will be the first column. So, you can
033see what that looks like. So, if you look at line 15, that's the 2026 budget estimate. That is essentially what our debt payments are going to be for the upcoming year 2026. That number is $13,73,82. So that's the the target that we start to look at to make sure that we are going to levy and have enough cash on hand that we can make our payments for that. First thing is let me say that we advertise this at 92 cents. Uh we advertise at a higher rate. Uh we've always done this as just standard practice across all educational institutions. Uh just in case that we get an NAV update that they come back and they have to lower our NAV. Uh again, as you remember, everything that we've advertised sets the maximums. We can never
034exceed that, but we can always bring it down. So we always advertise that rate to be a little bit higher just in case there is an NAV adjustment uh that we have to make. So that way we can still make sure we have levy to cover our debt payments. So that's where we started with the 92 cents. Uh from there uh we look and we have three different options or I kind of gave you two different scenarios here. So the 92 cents there is an option where we look at a rate of $89.99 and then there's an option where we look at or just kind of show you what it looks like uh if we were to maintain our current tax rate in our debt service fund. uh as you work your way down from
035let's go in the middle uh coming down. So that first line is going to be the property tax levy. Uh so and probably that's really hard to read but if you look at the 92 cents then the levy on that would be 1352,388. So let's call it just over 13 million. uh the the number right below that, the 934, that reflects back to our form two where we saw the revenue that was reflected in the debt service fund. That's essentially miscellaneous revenue. The following line below that just adds those two numbers together uh for this one, bringing us to 13.9. And then below that is where we start to see our debt payments and then giving us as we net that all out what our cash balance would be after we make our debt payments
036for the next year. So if we looked at the 92 cent example uh that would give us a cash balance of 2,9383. Now, what we can't do and what has been changed with Senate Bill One or Senate Enrollment Act One is we've talked about the Homestead Credit that is going to be impacting our 2026 numbers because that's when it takes effect. And that is the the $300 credit or the 10% whichever is the lesser of the two uh that individuals will receive back on their tax bills as a credit. The way that the law was written uh was that everything up until we talked about this, the debt service fund was protected from any type of a circuit breaker impact, which basically means anytime you have a circuit breaker impact, it's not going to affect
037the debt service fund, but it's going to be solely pushed over to the operations fund, and that's where we feel the impact. That language was not put in Senate Enrollment Act One. Uh so therefore the impact that we're going to see with the homestead credits are going to hit the debt service fund. Uh because that's never been a feasible or a a option in the past. The gateway does not allow us to go in and put that in to be able to show that to accurately reflect the into our numbers here. So that's why I've said uh when we look at these three separate lines which are essentially the top line is the levy. The next line is just adding in the miscellaneous revenue and then you do the math to get to your operating
038balance or your cash balance at the end of the year at the bottom. We're going to have to reduce all those numbers by a range of 475,000 to 690,000. Um that is what we have used to kind of I guess give a a best estimate. Uh we've uh worked with policy analytics to come up with these numbers. We worked with Stiffel uh to try to vet these numbers out. Uh and unfortunately we won't really know what that number is until probably April of next year. Uh until they >> which is why you want to advertise at 92 cents right now. >> Correct. Which is what creates the appearance that a 92 cent if that gets approved we can't go any higher. That's going to at least give us the number that's going to allow us
039to cover our debt. >> Correct. >> In 2026. >> Yes. The reality of it is numbers could change and we could end up getting something where we can offer a rate of say 89 or 90 cents which still generates enough money to pay and cover our debt. >> Yes. >> The challenge is though that we have to make that decision at our next board meeting and we won't know what those numbers are until April of next year. Got to love it. And and part of the part of this is really new this year is that not knowing what that additional pay out of debt service is going to have to be to cover those tax credits because we haven't had to do that previously. If that ends up being on the upper end of that,
040then your cash balance is going to get eroded by that much. And if the general assembly doesn't act on that this next year, it's going to happen again. So part of what I'm understanding is is that >> we're worried about paying our debt because something that's out of our control. >> Correct. >> Yeah. And I I should have emphasized we have had a a strategy and a plan developed for probably at least the last almost 5 years now. >> I guess I'm going to ask a what I think is question. So, based in mind, if we're worried about covering our debt because of something that's out of our control, shouldn't we be working a hell of a lot harder to reduce our debt currently, such as postponing the administration building or delaying and pausing on
041the transportation building for a while to really see what's going to happen between now and April. We need to be conscious of our debt. uh your examples administration building those bonds have already been issued and we already have the cash on hand. >> Can't you turn around pay it back though? >> No, not without severe penalties. And >> so >> no, unfortunately it doesn't work like bonds don't work like a mortgage in that way that we can pay them back immediately. We do have to wait for the period of time that they've been set out for as a maturity. And so when were we asked to approve those that procedure process to sell them sell those bones? What time of year was that? >> Those were the 24 go. So those would have been in
042mid 24. So about this time last year. >> Okay. >> And again that's you know to your point is that we had the strategy and the plan in place that we were doing what we needed to do. Again, I'm just thinking from a standpoint if I know that I'm personally looking at struggling to potentially be able to cover my debt. >> One of the things I want to do is be able to reduce my debt. >> So, are we You just said no, we've already sold the bonds. So, are we at least taking another step back and looking to see if there's any way we can reduce the scopes of those projects to bring that debt back down? >> The debt has already been issued. So you're saying we've issued debt and therefore we don't
043see any way that we can reduce our current outlook of debt. >> Correct. >> Right. >> Unfortunately, like I said, unfortunately the bond municipal bonds do not act like a traditional loan or mortgage that a person would experience where if you did have that situation, you could say, "All right, I see we have something going on here. I can take the funds that I have not spent yet and I can apply those back to the principal or I can just pay off that debt. Unfortunately, with municipal bonds, we just can't do that. Now, the good news is with our current AV structure and where we're at, we can make these payments um within the tax rates that we're looking at here. The future challenge, which we believe we're told the general assembly will address, but
044the future challenge is that that credit that has to be paid back. Right now, the debt service isn't protected from it. And we're hearing that the general assembly will address that now. Will they do that in a year or two? >> That's the proportionate share. >> That's That's correct. That's correct. So, we're interested to see how that happens. But in the meantime, we just need to make sure there's enough cash left in there to cover that another year just in case it doesn't get taken care of right away. >> Question for you, Corey. So, looking at these numbers, if you took the worst case scenario and we had to subtract almost 700,000 out of that number, even in our current tax rate, we're still well in the green by over half a million. Is there
045anything else that that leftover money needs to be used for. >> No. And yes and no. Again, it's in a silo so that we cannot transfer that to pay for anything else. We can't move it to operations. We can't move it to education. It has to stay there. But like Dr. Schaefer just said is that if they if the legislators don't come back and protect this fund next year, if you see that and know that that's a $700,000 potential deduction there. If it's another 700 next year and we've only got a half a million left in there, now we're looking at a $200,000 shortfall if we don't levy more than what we would need next year. Which essentially, if you kind of look at the math, really it would push if we said let's stay
046with our rate the way it is today, which is the far right hand column. And if that Senate Enrollment Act, if that impact is truly going to be the 690, 700,000, that would leave our operating cash balance of like you said about a half a million dollars. If that happens again next year, we would almost have to push our rate to at least 92 cents. And that's if NAV stays stable. If NAV goes up, it could come down a little bit more. But if NAB were to stay flat or to go down, then we potentially could have to look at raising that rate even higher than 92 cents for next year because we just don't have the operating cash sitting in there that we could use to offset those expenses. And then if we get
047to where let's say that it is a 200 thou 200,000 shortfall we either one we raise the rate to make sure that we can levy that amount to cover it or that gets pushed into the operations fund which is further driving that down because again it's an additional expense that we would have to pay for. That makes it that. >> So what what we would want to do this year would be to keep keep the rate high enough a little bit higher than we've had to make sure we have that that cash on hand in case that would happen because if you don't you run the risk the following year of having to really increase your tax rate which none of us want to do. So it's probably better to take a little bit more
048tax rate this year. uh hoping and thinking they're going to make that change, but if they don't, we have it covered for the following year without having to significantly increase the tax rate in 2027. >> So that operating balance number really needs to be above 1.4 to 1.6 for you to feel comfortable >> ideally. Yeah. I mean, if you look and see our top line, we're at like 1.8 right now and we're forecasting to be at the 1 point almost 1.2. Uh, I mean, that's that's starting to get pretty skinny. Um, it's still it's manageable and obviously it's it's we can do it. Um, but that's about the target area where we'd like to stay. >> So, that that end rate of 0899 is what's most likely here to to cover that. Not again not
049the 92 although that's what that's what's middle column but yes >> the first column as much as we would like that it's probably not a probably not a great option for us with a couple of the unknowns out there right now >> and again obviously we have to prepare for the worst case scenario here. If that number does come in closer to the half a million, then that's just additional dollars that will go into the operating balance that would then potentially next year allow us to either maintain that rate or I'm not going to say lower it because I just don't know what NAV is going to do, but there it it opens up a little bit more opportunities there. >> So, we're still waiting to see how Senate Bill one affects us. This has
050already taken into account everything for the fire territory and the changes there. >> Yeah. Yeah. So, the fire territory that is truly a circuit breaker impact, which means it is not going to affect our debt service fund. That's going to that's what's impacting our operations fund. What's only if the only thing that's affecting our debt service fund is that Senate enrollment act is the homestead credit, the $300 that individuals are going to or the lesser of 300 or 10% of the home value because that was again to like you said the proportionate distribution that we were talking about. So the middle column would ensure that we had the funds to pay our debts. If you had the worst case scenario in the next two years and they didn't fix it, the general assembly didn't fix
051it in 26, they waited till 27. >> Okay. >> Any indication? I mean, are they hoping or >> we're we're hearing they're going to talk about it and address it, but we we don't know in what way. Okay. >> And we don't know how that will be applied in terms of cities and towns versus schools versus other taxing municipalities. >> So just so I'm clear, the far right, if we keep it the same, we're good next year, but we're putting ourselves in a position to where the following year's budget we could have to make a massive jump. >> When you say far right, you're talking about the >> the 8641 our current tax rate. >> Like we would survive. There's not going to be an issue >> paying our our debts. It's just >> the
052following year's budget. >> Correct. If we kept it the way it is, to clarify, I think what I'm hearing, maybe you're asking is if we kept it where it is, we're risking not having the cash balance, I think, as you said, >> correct, >> to start to cover us as we go into 27. >> Yes, >> that's correct. On the other hand, if we end up with the middle column, our cash balance situation improves, we're a little higher tax rate wise or debt service rate wise than we are currently, but we're positioning oursel a little better for an unknown future debt. >> Correct. >> That's correct. Yes. And what has to happen for us to actually go with what we advertised? What has to happen in the world for us to say >> 92? >>
053Oh man, we really got to go with 92. >> It would have to either hit that 690 uh or even higher than that. Uh again, I don't foresee there being any chance that it would be higher than that, but that would be giving us the cushion that if it did come in at 700 for the tax credit, and if our NAV for next year were to either stay flat, >> makes you feel so confident about that. >> I trust my professionals policy analytics. That's who ran a lot of these numbers for us. Okay. >> And those are and those are very those are conservative numbers, too. Okay. for for this year. I think the only way we would end up with 92 is if there was some change to the net AB that we're not
054anticipating. But again, that's why we advertise high just in case. We had a very small very small u example of that about five years ago. It wasn't anything that was um made a big difference on our budget, but those things do happen occasionally. So this is just a guard against anything unforeseen happening. >> Okay. >> But yes, we don't we don't anticipate the 92. We anticipate the 899. >> Okay. And I guess again I'm showing my concern simply because as I look at form three and again I don't know if this matters but when I look at it it matters to me that the debt service amount is already greater than the operations. It's over 50% of what our education tower is. So again, I just find that concerning that we seem to be taking
055debt and debt and debt without trying to whittle it down. >> No. And I think the debt column is certainly up from years past. I understand that's a large part of the building projects we've taken on. But >> um a number of people been asked to approve things that's been approved and then the unknown comes along. Um I just find that concerning. That's all interesting. >> Sure. >> That's understandable. >> As you're have confidence in policy analytics, I'm will have confidence in you. Um, so I'm just asking the question in terms of clarity. >> So some what you said isn't on this answer isn't really going to come out till April, which is is still after the date in which the state hands us our approved budget. >> Correct. And again, we're not making any
056decisions this evening. Just trying to get the all the options out there. Um, so then as we look at I kind of pull all this together, the form 4B. Um, so this again is the top half. I just broke it down into four uh funds that we have right here. So this is looking at July through December. Um this is taking essentially the top top half of that is the revenues coming in. Bottom half is the expected expenditures for the rest of the year and then leaving us with our cash balance uh there at the bottom as we go into 26. As we look at the bottom of this uh this again shows uh what our expected revenues would be for each of those funds as we show coming in. Uh then also the expected
057budgeted estimated expenditures at the bottom and then again with cash balances at the bottom. Um again pointing out that this is the with the 92 cents uh that does drive the debt service cash balance to just over 2 million. But we also know that whatever that number might be has got to come out of that. So uh that's where that is. I'll pause there to see if any further questions about this because my next thing is we're going to talk about the capital projects plan and the bus replacement plan. Those are short and sweet, but I just want to answer any additional questions that anybody might have right now. >> So form these forms one, two, three, and 4B will all be submitted to the state we vote on our next meeting. >> Correct. Yep.
058We have to publicize again through form three. Uh everything is loaded in. uh we have our meeting whatever the board determines I either go back and make adjustments to it or I just click the little button that says approve adopted and we go from there and >> so the 92% rate depending on what we decide at our next meeting go that'll >> yeah I I will yes I will adjust that to whatever the board uh decides they want to get and does this budget take into account in the operations area that what you have in here operationally has remove the couple hundred,000 to whatever it is that we need to remove for 26. >> Yes. >> Yeah. >> Am I correct in thinking that the $300 that the state is trying to give back as
059a credit for we're essentially taking it right back in our threecent raise? >> Um I haven't done the math on that to break it down that far. I don't feel like it would be that much. Uh when I looked at that last year, like a I don't want to misquote, but I wanted to say like just a a penny increase for each individual parcel was less than $50, but I have to go back and look at my numbers to really >> So maybe >> so I mean it might it might give some of it back, but it for each individual person, it should not be giving back the full 300. It's important as we look at growth here, it's important to keep in mind, too, that you're having more and more people move in. You're
060having more and more people pay into the overall levy. So, I think, you know, taxpayers are going to see on an individual basis, they'll see some relief here and there because whatever levy cumulatively, but all the overlapping units that is to be gathered and brought in is being paid into by more persons. we see more housing and those house houses are coming on the taxing roles. You have more people contributing to that levy as that increases. >> Any other questions on this? >> I guess the only comment I have left is I would have liked to have seen this in the board packet so I could have studied your presentation a little bit more. >> Okay. I can I'll send it out >> because I'm just thinking that everywhere else people that have to do
061a presentation have to have it in as part of the board packet >> so we can look at I certainly would have liked to seen this ahead of time to study it a little bit more um in relation to what's in the forms. >> Okay. >> Um for me to be able to fully answer your question. Do I have any more questions? If I do, I'll ask them when we get to the October board meeting. >> Okay. Thank you. >> All right. Next item on the agenda, discussion of proposed three-year capital project plans. Mr. Herbert. >> Uh, thank you, Mr. Cherry. The capital project plan. Uh, so this is a requirement that we have to publicize. Uh and what the capital projects plan is that anything that is going to be over $10,000 uh anything
062that is done within the operations fund and anything that is deemed a capital project uh is what would be warranted to be on this report. Uh as you can see uh the report that I submitted, we do not have anything on there uh because we do not intend to be doing any capital projects this year that are going to be paid for out of the operations fund. So that's the main stipulation uh of what the capital projects plan is. Uh so we obviously with the reductions that we're working on through the operations fund. We don't have uh we're not going to have the budget to be able to do any type of capital projects through the operations fund. So that's why uh it is blank there say there's nothing on there. So that's the shortening
063short and sweet version of the capital projects plan. >> Any questions? >> Last year's plan is complete. Uh >> I know we did some we did seal coating at south and we did seal coating at north. Um those were completed. I have to go back and see. I believe there's one other additional item >> when there's something for North Elementary. >> I think there was a north HVAC which actually is getting rolled into the project that we're going to do next summer. We started we've done half of it that we were able to complete this summer and we're going to do the other half next summer. But again, those are both being paid out project dollars. Thank you. All right. Next item on the uh agenda, discussion of proposed five-year bus replacement plan. Mr. Herbert.
064>> Uh thank you, Mr. Cherry. So again, before you you see I sat down and met with Mrs. Swanson, our our transportation director, uh to just discuss uh the next phase of buses that she foresees needing to be replaced. Uh there you can see what those buses are. Um, again, unfortunately with budgetary constraints and the lack of dollars that we have in our operations fund, uh, we probably will not be replacing any buses this year. Uh, if we do move forward with any other type of go projects, uh, then we will look at replacing some of those buses. Uh, I intentionally kind of planned last year to not replace any buses either. Uh, but also, if you remember, we found a grant where we were able to get $25,000 per bus. So, we ended up
065replacing four buses last year. Uh, so that will kind of help us carry over into this year. Uh, we are going to have to start looking for uh probably some additional I'll call them the little white buses are kind of our um what's a better name for them? Many buses. >> Mini buses. Uh we do need to start uh the ones that we have are in good shape. They're starting to show a little bit of age, but we also could use a couple more. Um but again those are those costs. Uh I was actually on a call this morning uh with our some other CFOs in the area uh and one of them actually at Franklin Central said they went back and looked at the cost that they spent on a brand new bus in
0662019 and then looked at what they spent on one this year and it was a 68% increase. And if you look at over year-over-year, it's essentially about an 11% increase uh on the cost of buses. Uh and so that's going to be making it a little bit more challenging as we move forward. Uh but again, as we talked about the geo bonds and the maintenance plan, that could be part of that those projects that we could do uh as we get further down the road where we need uh new buses. I will say for the most part, our fleet, we've done a really good job over the last four to five years of updating our fleet. um we've been able to really get rid of all the ones that were just kind of sitting uh
067that really weren't usable. So, we've been able to kind of clear the yard of those. Um and so I feel like we're in a good spot right now for our bus uh buses and for our fleet, but it's definitely something we'll keep an eye on uh and try to manage as we continue to look at the dollars that we have available. >> So, I might understand that just looking back to the plan where he approved last this time last fall, >> those 10 19 and 22 were stated to be replaced in 25. You did or did not replace those buses. >> Uh I honestly I don't have the numbers in front of me, but I know we did replace four buses last year. >> I'm only asking because when I try to and again I
068know you may be able to take an old bus number, put it on a new bus, >> but the bus description also seems to match >> were spot on. Yeah. As if >> those three buses listed last year are still on this year's plan. It it could have been because what we'll do is we'll look at the time that those buses come in and we just look to see what are the ones that are in the worst shape that we need to get rid of. So it could be that the those three buses at the top of last year's list, maybe we weren't using them quite as much as we were using another one or unfortunately we've had maybe an accident with a bus. Uh a lot of times the main driver for when we
069do replace a bus is the floor. Um the state inspections are very conscious of what the floors look like. Uh so there could be a potential that the floor >> I only ask is do we have to vote on a bus replacement plan at the October board meeting? >> Yes. >> But yeah, we vote on it and approve it, but yet it kind of gets rewritten, >> right? Yeah. So >> I mean it's it's it's really >> a formality with the state as opposed to what we're approving, >> right? it's giving you the best information we have at the time and if things change um then yes we can I can make sure that we bring that back to the board. >> I I guess I would just personally if I'm being asked to approve
070something and the changes I understand that >> but it'd be nicer to know as you go throughout the year as opposed to me figure out last year's report this year's report and figure out if it stayed the same or not. Okay. Sure. >> All right. Any other questions? All right. The next item on the agenda is to open the floor for the public hearing. Remind everyone if you'd like to speak, step to the microphone and state your name and address and you have three minutes to speak. Seeing as there is no one in the off in the >> room, the audience. I think that's the word I'm looking for, the audience. Um, we will close that portion of this public hearing. Next item on the agenda. I've covered everything with you, Mr. All right. Next
071item on the agenda is announcements. The next regular meeting will be October 13, 2025 at 6:30 here in the training room at the Danville Community Middle School. Our fall break will be October 20th through 24th. I need a motion to adjourn this meeting. Thank you, Mr. Brown. I need a second. >> Second. >> Thank you, Mr. Bryant. All in favor? >> I. Any opposed? That passes unanimously. Thank you, everyone. >> Thanks,