DCCUSD School Board Work Session September 4, 2025

001Good evening everyone. I'd like to welcome everyone to the Dec County Central United School District Board of Education work session. Today is Thursday, September 4th, 2025. I'm going to turn it over to our superintendent. >> Thank you very much. So, we have a work session scheduled for this evening. So, we do have live stream and kind of an unorthodox work session. We also have combined the work session with our facilities and operations advisory group meeting as well. So we have um followed all all of our open door policies. So this is a live stream meeting. Um it is uh if anyone has public comment to make at any you know maybe at the end or during the discussion certainly even from our from people sitting in the crowd um that opportunity is going to be

002there or presented to you. If you want the opportunity to make some comments about what you're hearing about tonight you can certainly do that. And then I also want to remind especially those watching uh through the live stream, it may be difficult for you to see some of the materials on the screens uh tonight, we will make sure that we get everything posted on our website tomorrow under the schoolboard um tab so that you can access that. We also have a recording of the meeting as well. You can be sure to share with your friends that maybe missed the meeting all together but still want to review the information that was presented and the information that was shared here this evening. and I'm sure the the great conversation and discussions that we're going to have

003tonight. So, with that, I'm gonna turn it over to our CFO um Mark Grum to introduce our special guest here today. >> We're going to start with a little recap on SEA1 and bond financing. Uh Luke G. I always screw it up, so I try. Steel is here with us. Um and he's gonna run through his presentation to start tonight. >> All right. Go ahead. Uh, good evening. Thanks for having me. So, I think most of you are aware Senate RO act one passed back in April has made applications to municipalities. It really changed the property tax structure of Indiana uh and also the local income tax structure. Of course, those have applications to school corporations. So, this uh presentation we're walking through tonight is kind of an overview of where Decal Central has been

004historically with their levy and rate uh overview of Senate Rules Act One, what it means to you, what are the kind of the key themes to to keep in mind as you work through uh your long-term plans. Uh and then ultimately, how how does this affect you and what are your options going forward? It's a lot of information. Please stop me at at any point with questions or discuss So the first thing this is intended rolled act one but it does come into play here of just the relationship between net assessed value tax rate and levy. Uh and a lot of you may know this but essentially your net assessed value is your tax base uh of your community. If you multiply that by the tax rate, that brings in the levy or property tax

005revenue that a municipality collects. Historically, most schools have managed to a tax rate or a lot of schools managed to a tax rate or municipalities in general. So, as that assessed value grew, they may maintain that tax rate but generate more revenue. So, in that second row there, you'll see the assessed value increases 10%. It goes from 1 billion to 1.1 billion. If you maintain that dollar tax rate, that means that now you generate 11 million in levy or revenue. Some school corporations have as that assessed value has grown, they may identify what that levy or revenue is that they actually need. And so for this example, if you only needed the $10 million, your assessed value grew to 1.1 billion, your tax rate would only need to be 91 to generate that same $10

006million in levier revenue. Going forward with Senate Rolled Act One, because some of the changes that that they made that we'll walk through here in a second, that tax base pie is going to shrink. And as that tax base pie shrinks, you're going to have to increase the tax rate to generate the same levy or revenue going forward. And that's going to be the same for all municipalities, schools, libraries, towns, counties, cities, everyone's going to to be uh to have the same uh change with going having an increase in tax rate. So to generate that same $10 million levy, if your net assessed value shrinks to 800 million, your tax rate would have to increase to $1.25. So keep that in mind as we work through some of this. The next couple slides are really

007just uh kind of where you've been historically as we look at the levy and rate. So we go back to 2019. In gray is the operations fund levy and in blue is the debt service fund levy. In 2019, the total levy was just over 11.4 million. That's increased by an average of about 4% annually since 2019. If you look back at what what inflation has done since 2019, it's been about 4% uh annually on average. So, you've kind of been really tracking with inflation in terms of uh what your total levy has done. We've typically always equated it to a tax rate or that's kind of how it's always come out. So, let's look back at what the tax rate has done in that time frame. So, your tax rate in 2019 again between operations

008funding and debt service was 99. In that time frame, as your levy was increasing by about 4% annually, your net assessed value, the taxable value actually increased by 7.8% annually since 2019. So your tax base is growing by 8%, you're only increasing your levy by 4%. That results in a decreasing total tax rate. So you can see from 2019 you're at 99 cents all the way to 25 you're going down uh to 7769. So a lot of schools what what they had done is if your rate was 99 cents in 2019 as that assessed value grew you maintain that same tax rate in your uh levy increased by a greater amount. So in this example it would have increased by 8%. you guys really chose to do uh took a different avenue and focus more

009on what you actually need to run the district on day-to-day basis between your operations fund and debt service versus just maintaining one tax rate. And again, you can see that both on the levy page and the tax rate page. So, I know this is a a lot of information here kind of packed into one slide. Uh these are really the main implications to Decal Central Schools. The first one, debt service rate. So prior to this bill, if your debt service rate was over 80s, any new project had to go to referendum. Not subject to, had to go to referendum. Whether it was a $1 project or $100 million borrowing, it had to go to referendum. They changed that from 80 cents down to 70 cents with Senate Enrolled Act One. your current debt service tax

010rate is just over 31 cents. Not an immediate concern. Just something to to kind of keep in in the back of your mind uh from a long-term planning perspective. And if it was just that alone, if it was just that change, I probably wouldn't be here today because you're so far away from that. One of the major changes that that this bill had, it would change the way uh assessed that net assessed value is is calculated. So right now a home has a gross assessed value. You would say it's similar to what it would sell for the market value of or the assessed value of it. Right now that home receives a standard deduction of 48,000 and a supplemental deduction of 37.5%. After those deductions, that's your net assessed value. With these changes, they're changing

011the standard deduction to go down from 48,000 to zero by 2031 and then increasing the supplemental deduction from 37.5% to 67%. So, this is all getting phased in over a six-year time period starting in 2026 through 2031. But for a $250,000 home, that results in a decrease of a net assessed value of almost 35% when all this is done. Of course, there's likely going to be trending in that time frame to to potentially offset some of that. But if you just look at from what it is today to what it is in 2031, not factoring in possibility to just see what the impact is of the deductions, it's almost a 35% decrease in your net assessed value. So again, kind of going back to that first slide, if your tax base was made up of

012entirely 35 or $250,000 homes, your tax base shrinks by 35%. So your tax rate has to increase to generate the same amount of revenue. The second property tax class is farmland and 2% property. So again, that's farmland, apartments, rentals, senior living communities. They've never received a deduction in the past. So the gross assessed value has been equivalent to the net assessed value. Similar to the homesteads, they are going to see increase in deductions through uh 2031. It goes from 0% up to 33.4% through 2031. So that's going to decrease the uh the taxable value there too. Again, kind of shrinking that high. The last bucket is commercial. That's your 3% properties. they're not going to receive a deduction. But ultimately what they did is they changed the way business personal property is going to be

013taxed. So right now business personal property would be equipment um if you think about a farmer combine or or uh machinery any machine any machinery that that a company would have that is currently tax based on a depreciation table. When the com when the equipment is bought it's at 100% and it depreciates down to year four it goes to 30%. Currently, it remains at 30% until a new piece of equipment is bought to replace that restarts the depreciation table. With this change, any new piece of property that goes into service after January 1, 2025, that 30% floor goes away. So, year four, it's at 30%, year five goes to 15, five, and zero. So, by year seven, there's no tax on that equipment. depending on how long each uh company or corporation hangs on to

014that equipment and what the average lifespan of that equipment is, that's going to change that depreciation table. So, if they have an average life of 20 years, you may go be going a a certain time period without having a tax on that business personal property. They're also including an exemption for businesses with under $2 million in business personal property. Currently, that's 80,000. They're increasing that threshold to $2 million. All of that, all three of those things are going to reduce your net assessed value. And we'll get to it here in a second, kind of what the impact is ultimately to a taxpayer. Um, but ultimately, that's one of the biggest changes from Senate enrolled act one. It's changing your net assess value. It's going to be phased in over a six-year period. So, let let

015me stop there. I mean, because that's really probably the meat of of Senate Enrolled Act One. We'll walk through a couple other things, but any questions on on that front >> from the agricultural piece? Do we know what kind of impact that we would see because we already have the circuit breakers in place, right? So, how does that what would the the delta be between those on you know equalized analysis? >> Uh tell me more what you're thinking. >> Right. The circuit breakers like you two% gaps. >> Okay. So, so does this affect that or does it on top of that or with this reducing on top of that or the circuit breaker still in place? >> Circuit breaker still in place. Your homesteads are at 1%, your farmland 2%, they're at 2%, commercial to

0163%. That doesn't change any of that. That's all in the state constitution. This is just changing the way it's taxed essentially. >> Gotcha. Thank you. >> Yep. >> Uh the next thing there, the operations fund. So right now, uh, I guess historically over the last five or six years, you've been able to increase your levy and your operations fund by anywhere from 3.4% to 5%. And that's that's mandated by the state. Um, and that is the same for every school corporation across the state. In 2026, that's going to be capped at 4%. That was kind of the the big win for schools in this bill because one of the earlier bills it was 0% in 26, 1% in 27, 2% in 28. A couple other ideas were thrown out in amendments, but ultimately they they

017landed on a 4% max levy growth quotient uh for your operations fund in 2026. The idea of that is just to keep up with inflation. We we know costs are increasing in your operations fund. So they're capping that at 4% but allowing you to take that 4% to keep up with that with that inflation. The downfall of that is it only says it for 2026. So we don't know what the impact is after 2026 with the operations fund. Do they cap it again at 20 at 4% in 27 and beyond? Do they change the operations amount calculation? Do they go back to the 0% 1% 2%? We we just don't know exactly what that's going to be. They're going to have to figure out what that is in in the short session and we'll just

018have to wait to see until we get some guidance there from our general assembly. The next one is the homestead credit. I'm sure many of you heard about the $300 homestead credit. It's not just a $300 homestead credit is it is the lesser of 10% of your tax liability or a $300 credit or up to $300 credit. So, if your tax liability is $2,000, your tax then your credit is $200. If your tax liability is $4,000, then you're capped at that $300 credit. There's some there are some additional U credits that were involved in this bill, over 65, uh, blind, veteran, disabled, and a few other ones. All kind of in the $150 to $250 range. The largest one is that homestead credit of up to $300 up to $300. Again, it's an unfunded liability,

019meaning that that loss is going to be on the schools and the other municipalities. The state is not coming in to say, "Here's the difference to fund this $300. Uh, home owners are just not going to pay up to that 10% or $300 of their bill." And that will be a revenue loss to all municipalities. Again, we'll kind of walk walk through some math here a little bit. The next part, they change property tax. They're also changing the local income tax structure. So, right now, um, schools will no longer receive, uh, local income tax shares in in beginning in 2028. They're really overhauling it beginning in 2028. So, the way that local income tax affects schools is one of two ways. The first one is local income tax certified shares. It essentially is the county

020taking local income tax and giving a portion of it to the Cal Central schools, the Cal Eastern Schools, so on and so forth, uh, for the other municipalities. That's going away in 2028. In 2025, you received $576,000 of local income tax shares that was deposited into your education fund. So as of right now, unless the county decides to move for move that forward statutoily, that will go away in 2028. So you would still receive it 26 and 27 unless again your county decides to accelerate that. The second one is property tax replacement credit. Essentially, the county's receiving local income tax and they're dispersing it by buying down a homeowner's tax bill. So, if a homeowner's tax bill is $1,000 and a property tax credit is, it's always a percentage, but for simple math, we'll say

02110%, so it's $100. Homeowner pays $900, county pays the $100. Municipalities are made whole at the $1,000. That's going to go away in 2028 as part of this. So now $100 goes away, $1,000. That increases the taxpayers's bill from that $900 to $1,000. If someone is at their property tax cap, they're already paying that 1% that we talked about, they will there's going to be difference in their bill because they're already paying that 1%. The difference is who's not going to receive the property tax replacement credit and that's going to be the municipalities. It's going to be a loss in revenue to the municipalities. And again, this is going to be for all municipalities, not not just schools. And we'll we'll kind of walk through some math on this in a second, too. Last two

022things here, referendums, they the main the main change here is that all referendums uh especially capital have to be November 26 and beyond operating. There's a few schools that were able to to get in under some language that is November 25, but starting uh after that, it's all it's going to be every general election going forward starting November 2026. So, every two years from from there on out. Um and then there's also some charter share with the operations fund and referendum if you qualify. I don't think that's on the table, so I'm just going to kind of skip over that for now. Uh if it ever does become on the table, we we can dive into that a little bit more. Last thing with the budget process, um, this again goes into effect in 28

023or 29. So, we have some time here if there there's no additional changes. But if your levy increases year-over-year, you essentially have to have a separate hearing one month earlier in your budget process just to to kind of reiterate that your levy is increasing year-over-year. It's going to force you to start the process one month earlier. probably going to be kind of a pain the first year and then and then it's just gonna be part of the budget process would be my guess. So that's the overview of Senate ruled act one of me trying to consolidate a 250 page bill into a page and a half. Uh any questions? >> No. Very well done. Did a good job explaining that. >> Okay. Thank you. So this is trying this is showing or illustrating the change

024in the homestead deductions and the standard supplemental deduction. The average home value according to the most recent Census Bureau data in your district is 191,300. A lot of times that Census Bureau data lags a little bit. Uh so that m number may be higher. So when you look at that you think maybe it should be 220, 225, 250. That may be the case. These deductions still apply. And ultimately the higher the value of a home the greater the change uh the net change in the net assessed value is going to be because 67% of a higher number is a lot higher number. Uh so starting in 2025 the gross assessed value of a home 191,300. They receive a standard deduction of 48,000 supplemental deduction of 37 a.5. Their net assessed value is $89,563. As you

025kind of work down that chart, that standard deduction starts to phase out. Ultimately, by 2031, it goes down to zero. Supplemental deduction though increases from 37.5% up to 66.7. So, if there's no change to the gross assessed value of the home, that net assessed value, the taxable value goes from 89,563 down to $63,73. But just to to kind of walk through that and then I think ultimately and this maybe kind of hard to see. U so then we kind took took it one more step. We know there's going to be deductions on the 2% properties as well. Um so how does that ultimately affect your net assessed value? How does that affect your tax rate? How does that affect your taxpayer? And I will say that this is a a kind of a a back

026of the napkin example because we don't know what average home value is going to do from now to 2031. And that's what makes that that part a little bit difficult is we're only, you know, six months into really the data that is going to affect all of all of this. So do we have gross assess value that continues like the last couple years of that 6 to 10 to 12%? Does it go back to precoid norms of two to four percent? Do we hit a recession at some point? That's what makes the gross assess value kind of hard to project. Or are there additional legislative changes between now and 2031 as well? So the top box there is really just it's the same format uh that was in the previous page. I just didn't break

027out the deductions there, but you'll see the math lines up with that prior page. Second uh table there is the farmland value but these deductions would apply for all 2% properties. So apartments, rentals, senior living communities and act. Right now the base rate of 1 acre of farmland is 2280. They did change the calculation a little bit for 2026. So you'll see that highlighted there. Uh but ultimately the deductions are that are allowable beginning in 2026 of 6% 2027 another 6% and you can see how that builds all the way to 2031 but ultimately you get to 33.4%. So if nothing else changed that same base rate of farmland right now 2280 they do not have any deductions the net assessed value is 2280 by 2031 that 2280 the taxable value of that becomes just

028over $1,400. >> And and this calculation is assuming that our operational budget stays the same and our debt service stays the same. on on this next box here >> on on these numbers where you're showing the school tax rate goes from 77 cents to a dollar. >> Yes. Yeah. So that the last box box here and that's that's what you're alluding to is it and this isn't necessarily reality. It's just more of what to illustrate what the impact would ultimately be to your tax rate. Kind of going back to to that first slide. So right now your net assessed value is 1 bill869 million uh and some change and 80% of that tax base is made up of 1 and 2% properties. So for simplistic purposes we are going to remove the 3% property in

029this and just apply these 1 and 2% deductions to that 80% of the tax base and just to see what that does to your net assessed value. Again, we're assuming no trending, no growth, no new neighborhoods, no new businesses or anything like that. But ultimately, you'll see by 203 2031 that gets your net assess value from just under 1.9 billion down to 1.4 billion give or take in 2031. And that's just from the deductions. >> That's just as a baseline of assessed value stays the same over that time frame. the gross assessed value. >> Yes. >> So a decrease in gross assessed value would exaggerate that number. >> Correct. And this doesn't factor in the business personal property change which so yeah it's it's kind of removing that 20% of that. Um so we just

030looked at what is your levy now? Again as we showed the previous page it's about 14.5 million. If you maintain the same levy from now to 2031 what does that do to your tax rate? We know that's going to be nearly impossible because a dollar today is not going to be the a dollar the same dollar in 2031. But just to again show that kind of relationship, the tax rate right now 7769. If you apply that same levy to a smaller tax base, what does that do to your tax rate? Ultimately, it creeps up roughly by the same percentage as those deductions. And by 2031, that tax rate, even though you're not asking for a single additional dollar, increases your rate to a dollar two essentially. So, so surely if the tax if the tax

031rate is going up from 77 to a dollar2, that means that tax bills are going up. It's not necessarily the case because the tax rate is increasing by roughly the same margin that the homestead val net assessed value is declining by those 2% properties. So down there in green uh the the estimated homestead taxpayer liability for just the decal central school portion based on this uh would be $696 in 2025. as you work to the right, 694, 688, 684, and ultimately by 2031 it gets down to about $650. Not really the historic property tax relief that that was talked about. Um, and of course, we know the gross assessed value and things like that are going to change over time. But again, just to kind of uh simply quantify what the difference in tax rate

032is and why we're most schools are shifting from we can't look at tax rate anymore because quite frankly it doesn't matter what your tax rate is. Every room's going up. We need to focus on what the levy is. And the the fortunate part I think for you all is that you've done that historically and that was shown on the on the initial tables. You guys have done that historically. You haven't been like a lot of schools that have just maintained your rate. Uh, so it's not necessarily a change in practice. The mechanics of the tax bill are is just going to look different going forward. So then how did they get to the historic property tax relief? Again, I should apologize for all the numbers that that I'm putting on on this page. It's like

033it's like a math. Careful. >> But ultimately, it comes down to that $300 up to $300 in credit. So again, this is kind of a back to math and calculation. So I'll walk you through it. Your net assessed value 1 bill869 million. 55% of that is made up from homesteads. So 55% of that 1.869 number comes out to just over $1 million. And that's that third row. The net assessed value today of your average home is 89,563. And again, that's just flipping back to that prior page of what it is after the deductions. Simply divide the total value by the average home and you get an estimated homestead parcels of 11,480 in your district. We assume that all 11,480 are paying 1% of their gross assessed value. So they're paying that 1% cap. That's not

034the case. I know that because uh all of your tax rates are extremely low. You guys don't have circuit breaker loss right now. uh but we don't have parcel by parcel level analysis to do it. So that you'll kind of see how how we got how we got to this analysis. Uh so assuming that though multiplying that by the $11,480 the total loss from all credits is just under 2.2 million. That is not going to be um taken on all by the school corporation of course because there's other property tax levies. Other municipalities have levies as well. It's going to be proportionally based on what your percentage of the rate is as a percentage of the total taxing district rate. As you all know there, you have quite a few taxing districts there. We've listed

035them all out. I'm not going to go one by one. Uh if you want to look at the math, I think it's fairly easy to follow, but ultimately based on that uh analysis, the total loss for Decal Central would be a million dollars. And that starts in 2026. But like I said earlier, we know everyone's not at their at their cap. You don't have a lot of circuit breaker loss. So likely that loss is probably more in the 500 to $750,000 amount. But that is going to go into effect in 2026. So that goes into effect in 26. Your local income tax loss goes into effect in 28. And that's 575,000. Right now, this homestead credit loss is going to be applied proportionally to the operations fund and the debt service fund. So, you would

036take some of the loss in operations and some of the loss in debt service. Yours is more in the operations on on a proportional basis. We think it's fairly likely that the general assembly is going to come back and protect the debt debt service fund because if you continue to lose dollars in your debt service fund, eventually you're not going to have cash to pay your bond issues. So everyone would be in the same boat where you'd be pulling dollars from operations or education to pay your debt service. Same thing happened when circuit breaker was implemented back in 0809. They didn't protect it the first year. They ultimately protected it uh and you took that full loss in the operations fund. So we've been telling people plan to just take the full loss in operations.

037If you do have a little bit debt service, you're actually net positive uh in your operations. This is the last one with a lot of numbers, but but it's a lot. So, the property tax replacement credit u and this is truly county specific is about 40 to 50% of counties statewide have this property tax replacement credit. Again, what it is when you're paying your lo your uh payroll you're receiving your payroll check, a portion of that goes to local income tax. County collects that local income tax. they set it aside. They either buy down your property tax bill or if it's at the cap, then it's going to the municipalities. And we'll kind of walk through the math here in a second. Uh but in a lot of ways, you're kind of paying it regardless.

038So in 2027, if you start at the top, I hope you guys can can see that. Uh the gross assessed value that we've talked about 191,300. The standard deduction at that point based on that chart 40,000 supplemental deduction uh which is that increasing percentage amount equates to $69,598. So in 2027 you get a taxable net assessed value of $81,700. And this would be a homestead in Waterlue which I think was only about four or five% uh of your of your tax base. The reason we picked it is because it has the highest uh non-referendum district rate and that's that 31976. So of course that's not just the Cal Central, that's all of the municipalities combined. That that rates 31976. Simply multiply that by the net assessed value of the 81,000 and you get a gross

039tax liability of $2,612. But we know that that homeowner can only pay 1% of their of their bill. So, they can only pay $1,913. But before we get there, the county is going to offer a property tax replacement credit. And for your county, that's roughly $29%. That's $766 that they buy down that bill before we get to the circuit breaker calculation. So, the net tax liability is $1,845.91. That's under that 1%. So that they ultimately their liability would be $1,845.91. But now they get the homestead credit of up to 10%. That's $184 and their final tax bill is $1,661. However, the revenue to the municipalities is that $1660 plus the property tax replacement credit. So the actual revenue to municipalities is 2400. In 2028, let's look at the same thing, but now that property tax

040replacement is going away. Same thing. We're assuming the home value doesn't change, the different rate doesn't change. Uh you'll see the change in net assessed value. That's just simply due to to the change in those deductions that we talked about. The gross tax liability uh comes out to $2,475. But they're capped at that 1% that $1,913. I don't care if you ask them for $10,000 or uh $1913. That's all you're getting is $1,913. So the circuit breaker credit is $562. They've never been impacted by circuit breaker before. Now they're going to be impacted by circuit breaker. So they're only going to pay up to that 1%. Then they get the homestead credit of $191 and their final tax bill comes out to be just over 1720. little bit of an increase in in their bill,

041not too substantial. Uh but the loss to municipalities is vastly different down there at the bottom because they're not getting that property tax replacement credit. [Music] So let's switch over to someone that lives in the city of Auburn, someone that's not after tax caps. Same thing at the top, gross test value, standard supplemental. We're at the same math as it was previously, but now the non-referendum district rate is $2.28. Multiply that by the 81,000. Their gross tax liability is $1,864. In 2027, they get that property tax replacement credit. That comes out to $547. Net tax liability, taking that off, $1,317, and they get that homestead credit. So ultimately their final tax bill is $1,185. Move over to 28, property tax replacement credit goes away. Same thing kind of work your work your way down. Gross

042tax liability is $1,767. Now they don't get that PPRC. They're do they owe the $1,767. their homestead credit increases a little bit because it's 10% of a higher number, but ultimately their final tax bill is $1,590. An increase in their bill of $45 and nothing changed except that property tax replacement credit going away. So, nothing that the school can do or control uh but simply the uh function of the local income tax structure overhaul uh and property tax uh structure overhaul from Senate rule act one. It wouldn't have shocked me if some of this changed between now and 2028 specifically to this. Um I mean I think other municipalities are are aware of this as well. So wouldn't shock me if it if this change or if um I guess if it change in the

043general assembly session at some point. No guarantee guarantee that it does, but this is not exactly screaming the historic property tax relief either when you take away that property tax replacement credit and it forces bills up. So that's all the math that I have for you guys tonight. >> So ultimately I think I mean with this when I think about it it's ultimately impacting your operations fund, right? You're you're going to have increased circuit breaker loss potentially uh if it drives people to the caps. Uh it's going to reduce your local income tax share. you're losing that $575,000 in in the education fund or operations, you have you have the ability to choose which fund you receded into. Then you have that homestead credit and that starts in 26 and that's a again that $500,000

044to $750,000. Those are those are not small numbers to make up especially when you can only increase your operations fund by 4%. You're not a corporation. You can't raise prices to to offset that loss. So So what are your options? And to me, it kind of comes down to three things. If you want to increase revenue, you can transfer more dollars from education fund to operations fund. It's never a very popular move. You have thresholds there that the um the 15% you have threshold within your education fund that a portion has to go with that. You're also competing with teachers uh with other school districts. Typically, that's not really an option for most schools. The only other way to increase revenue for a school corporation is to run an operating referendum. That's never a popular

045choice e either or or an easy choice. And the last thing, if you can't increase revenue, can you shift expenditures out of operations into that service? And I would say that's what most school corporations are doing because again, your your hands are tied a lot of times with the education fund. referendums are can be a little bit difficult and unpredictable because we don't know what the outcome is ultimately going to be and they can only go every two years. So if you can't do that then you one of the pieces in your operations fund in addition to wages, transportation, insurance, utilities is a capital projects fund. And that capital projects fund is used for general renovations around the district. So anything kind of capital in nature, buses, cameras, paving, windows, doors, technology, anything like that.

046So what a lot of schools are looking at is can we shift that o over from operations to debt service. We can't increase the revenue, but that's a way to offset that loss. Uh so something to think about again, your options are fairly limited as a school corporation, which brings us to bond payment. So you guys have been have been through this before. Uh you have three bond issues outstanding. In gray is your 2021 bonds and blue is your 2023 bonds. And then in green is your 2024 bonds. You'll see from 25 to 26. The payments drop from about 6 million to to about 5 million. As those 21 bonds pay off, they drop again 29. When 23 bonds pay off again, they they drop again in 2031. Ultimately, those 24 bonds are paid off

047at the end of 2037. That equates to a debt service levy. Again, levy or revenue, the dollars that you're bringing in in your debt service. You have your operations fund and your debt service fund. The debt service fund essentially mirrors those payments really, but it factors in cash that you have on hand and some miscellaneous revenue. license excise size tax, uh, CVET, FIT tax, some additional revenue that that that comes into that ultimately makes up what your levy is, your debt service fund. But again, you can ultimately see it pretty much follows the same footprint or pattern as that prior page. So, one option would be uh, and again, some of this going to come down to structuring a little bit, and I'll I'll walk through u a couple options here. One option would be

048if you want to do a 6.6 6 million million general obligation bond. Maintain that debt service levy again. So you'll see the the blue kind of fills up to the gray in 2025. Still leaving capacity for the future. We know that you're likely going to have to shift more dollars from operations to debt service because of this bill and because the operations fund is just generally getting squeezed anyways. So, we try to leave capacity the following year for any additional projects, which would be in green here. And these are all kind of hypothetical numbers here, but this would be a $30 million uh borrowing in 2026 that your levy in 2027. Ultimately, that's uh the goal would be to maintain some borrowing capacity. We have it set up now to to have that capacity beginning

049with the 2029 levy and you'll see that kind of falls off as other debt falls off and uh you know so on and so forth as you kind of work down 5 10 15 years down the road. The one problem or concern that we have with you if you're maintaining your your debt service levy is what we talked about earlier. A dollar today does not equate to a dollar in 2031 35 40 and really the practice of the school corporation uh historically has been kind of you know levy what you need and that's historically averaged out to about 4% growth. operations fund. That's that max levy growth. That's always been about 4% as well. Your total levy has been about 4%. It's fluctuated on an annual basis, but on average I think goes 4.1% which

050is really keeping up with inflation. So this scenario uh and again this is just preliminary illustrated to show what the options are. This would be increasing your levy on annual basis until a certain point um where you increase that debt service levy 4% annually. This shows it until 2029. Because you're doing that, you're allowed to you're able to repay the bonds a little bit quicker, saving some dollars on on interest. But then ultimately, your cliff from this page compared to the prior page, it gives you substantially more borrowing capacity within your current goals and whatever that levy ends up being. So it allows you to fund some of those deferred or preventive maintenance type projects out of debt service uh while still keeping whatever goal that that is in mind. And to quantify that scenario

051one kind of maintaining the debt service levy total borrowing amount of 6.6 6 million and a total interest cost of 2,361,000 2028 bonds uh $30 million project fund $32 million overall borrowing equates to an interest cost of $21,322,000. If we look at scenario two and that's again increase in the levy 4% annually, you save about 280,000 on interest costs in that scenario. But then by the 28 bonds, it's about a million and a half. And that's still keeping the same 20-year footprint with it. Of course, you have the ability then to to shorten that up like we've done in some prior situations uh for prior bond issues, but it gives you a little bit more flexibility. And I'm not necessarily advocating for for 4%. Uh I think just something to think about is if you

052take care of these projects, how do you set yourself up over the next 5, 10, 15 years? Can you do it with maintaining your current debt service levy? Does it need to increase by 2%, 4%, 5%? Uh what does that ultimately look like? And I I think you could even, you know, potentially set out on something and then change that going forward, but trying to come up with some plan. We know the general assembly is going to continue to make changes with this. So, how how do we fund what you need to fund while staying flexible to still be able to pivot if we need to? There are additional changes that that come up. Uh so you're not put in a bad spot and feel like your back's against the wall. >> Can we go

053back one slide? >> Maybe do this again. Go to the bottom left corner circle over there. Over there. >> That's painful. >> It is tough. >> Okay. So for everybody, can you explain why the debt services increases from 2025 to 2029 and then just drops off and then levelizes again? >> Yeah. So that was just the way I kind of set that up for a structure just to kind of illustrate what that 4% annual increase would be going back to to what uh you've kind of done historically and keeping up with inflation eventually. My thought was in 2029 you're going to have additional needs. So how do we fill in within that current uh that current footprint? So I I set up the stair step eventually. I didn't want to set up the stairst step

054where you pay it off in 12 years and it's just increasing forever. So that's why it stops in 2029. Again, completely illustrative. If you wanted to see at 28 or 30 or 27, that that would certainly be an option. This is just kind of a starting point. So, so if we wanted to keep the debt services flatlined basically from 25 forward, it probably have to go from 2025 to 2032, 2033. >> Well, that would be more the picture before, right? >> That would fill up. It should have fill up. Yeah. >> Yeah. So, so that that would be I think the scenario you're talking about is this. Yeah. where basically you're you're flatline with potential large projects from 2025 to 2035. >> Yeah. >> You be able to do some spending, but you'd be limited.

055Yeah. There would not >> without debt services going up. >> Yeah. And you you would have the ability, I mean, to kind of backload this a little bit if you had some projects to kind of move some of those green green bars, shrink those a little bit, push them out a little bit longer. Of course, that's going to increase your interest costs. Um, so again, it's kind of how do you fund what you need to fund now while keeping flexibility and maintaining the long-term plan to to fund what you ultimately need to fund in the next 5, 10, 15 years. And the the only real other way to reduce or have available money for project spending then would be to reduce the operational budget. Yeah, that that's the the biggest challenge that schools face is

056I mean I don't know what your percentage is but generally it's like 80% is made up from wages, utilities, property and casualty insurance and transportation. Tough tough to to really cut any of that. Most of those have have well exceeded the 4% inflation especially property and casualty insurance and a couple others. So that I think that that's the difficult part is you really you really only have one avenue within that operations fund to make changes. >> Can't you can't really barter with your utilities. You can't really you can only get your property cult insurance so low. Transportation kind of is is what it is. Try to run them as efficiently as possible, but you still have to have buses, fuel, and and pay everyone. So the the last option there is really your capital projects.

057Again, most of that you said 4%. So most of that's going towards if you look at history the last six years we did a 64%. So we're already giving raises uh to our employees that are about at that 4% raise that aggregated over the last six years there so we don't have enough money to apply for those projects. that this 4% is debt service company's talking debt service. >> Yeah. But again, right >> inflation 4% we've been covering inflation for our employees basically. That's kind of that's the I mean that's that's right inflation. >> That's what I like. >> Yeah. Can I just I just have to ask this. Um, back on the RA section, I think if I understood you right, you said that if I pay my paycheck, I have a local income

058tax. >> Correct. >> And that money is used to create the local property tax replacement money. >> Correct. >> So, if we're doing away with the local property tax replacement money and I'm still paying the tax. >> Correct. >> And maybe that's a discussion for a different day or maybe not. But so, who's getting that money now? It's a great question. Uh, >> thank you. >> It's been driving me nuts. I had to ask it while you were here. Professor's here. I got to take it. >> I think it's driving everyone nuts a little bit. And And to be honest with you, I think the counties are are still trying to decide what do they do with that local income tax as well. Do they they're getting hit on the property tax side as well.

059They have some additional tools. They have utility revenue, local income tax, tip revenue. Do they need to increase the the local income tax? And if they don't use it for property tax replacement credit, do they use it for public safety? Do they use it for projects? Do they decrease it? That's going to be so very county specific. >> It stay in the county though. >> It would stay in the county. >> County could Yeah. And they they may decrease it and offset it, right? I don't think that's going to be the the common case around the state, >> but it's going to be county specific on what each one does. Thank you. [Music] I think that was his last slide. So, >> yeah. Any other questions? Yeah. >> Luke, what makes that long track home?

060>> Thanks for having me. It's not conversation or anything. That's a lot of information. >> Thank you. I I sent around the table. I don't know if we had any extras for people in the crowd. [Music] >> Um, just off this last point, this is our operations fund which dating back 2019 where have annual data. I'll just kind of segue right into this conversation. So I'm showing you salaries and benefits as you can see make up the largest portion of the operations fund by far about 50% of the phone number every other expense that we paid out. Those first two columns after the year in the top um table represent actual money paid out. So then I total what we paid out and then the fourth column over is the actual budget that was budgeted

061for that year. the difference between the budget and the total and the percentage change from the budget to what we totally spend. The second table shows what Luke was just referring to with our big ticket items. Obviously, salaries and benefits are the biggest component of the operations fund. And then you have insurance. That's our liability. That's our auto, that's cyber security. Everything you can name for insurance outside of health insurance. Every other insurance we have that's been our bill. Utilities follows that. uh propane for our buses, technology, and our maintenance department. When you get to those grand totals and you look at the very bottom table, that's just the one where I said have the difference from the actual spend, you can see how much money doesn't fit into one of those boxes of the

062second table. Not not a huge amount of money. Okay. So, when we talk about cutting from the operations fund or finding ways, the only thing you're going to be able to cut is is people. Okay? Everything else listed across there is a tough cut. You're not going to be able to cut insurance. You're not going to be able to cut utility, propane. Prices aren't going to go down. Um, you're going to need to keep up with your technology, and you're definitely going to have to maintain your buildings. So when you look for places to cut within a budget, this is what school districts are scrambling with right now, right? Because there's just not a lot there to to look at to make cuts from operations. It is why you're seeing so many like I should

063have I should have had Luke explain. I think he has booked up the entire month meeting the school boards and work sessions for the last three months going over SEA1 trying to scramble. They also are obviously heavily involved when we do bond. Um I don't know a school district that's not bonding big money this year and in the next because they are trying to find ways to protect the operations fund and the only way to do it is to shift things in debt service. It's not optimal. It's not what I want to do but it's something you have to look at doing to survive. We are in a much better place as a district than so many other districts. I am not asking this board. I won't be bringing in the next two years that

064operations referendum. Uh we will not go for that. I don't think we need to. We have healthy cash balances. It's one of the reasons that myself, my predecessor and Steve Snder and Brandon Penrod all have the same philosophy when it comes to cash balance. Had it every chance you get because you have no idea what the state is going to do to you. And lo and behold, this is what they've done to us. If you paid attention to the tax credit, the last one, Luke has to work with the state. Okay, they work with legislators. He has to be very PC as probably I do, but anybody that knows me, I struggle with that sometimes. Um, that shows you what legislation can do. Talking about tax reform to help taxpayers, taking away that personal tax

065credit hurts everybody. Hurts us, hurts the taxpayer. That's that's just bottom line. There's there's no spinning that that will hurt the taxpayer and it will hurt every municipality collecting money. That's why Luke stated they're probably going to look at that. They absolutely are going to have to look at that. They're going to have to look at all of this because there are school districts that Luke has worked with that are seeing their operations fund decrease by 90%. Literally 90%. There was one he stated that from the math they were doing was actually upside down and negative. So the CFO asking he's like, "So I'm going to have to pay the state money for our I mean that's how bad these urban especially areas that rely that are hit hard by circuit breaker limitations that 2%

066they're getting destroyed and they are all scrambling to get some operations referendum just keep lights on. We aren't in that position. Um, we are positioning ourselves well, I feel with some of our recent hires as well in our maintenance department to tackle one of our biggest expenses in maintenance is HVAC. We now have a licensed HVAC person on staff that is I mean Matt could speak to it. I'm sure already saved us probably 25 to $30,000 in a week and a half where we're going to have to contract out work that he is going to be able to do for us. Um, that will be a huge component. I'm looking at every avenue we can. I wanted to kind of share this as we slip into the second discussion point and the BOE meeting itself

067um for people to kind of see to get an idea just of where we spend money in the operations fund and how little wiggle room we have when it comes to spending money. Keep in mind his example where he was keeping things flatlined in terms of property value. Just think about that for a second, right? If if that stays flatline and they continue to increase the price through 2031, which you know, that's the plan right now, our rate is going to have to go up substantially just to maintain where we're at. You know, by looking at these expenses, those aren't going to stay where they're at. Insurance is going to go up. Utilities are going to go up. Salaries, I would hope, will go up. I mean, so we're going to have to take hard

068looks and try to cut every way we can. Um, you know, you look from 20 23 to 24, I I had begun that process. I knew when I started here that sea 1 was coming and we started to look and it was is a painful task and I appreciate Steve's willingness to, you know, it's tough. It's tough conversations you have to have when you have to start making cuts to programs and things like that, but we've done a nice job from 23 to 24. We need to continue doing that. I know the state is big about saying do more with less. Um you you just reach that point where you can't go any less. There's no more meat on the bone to cut away. So um at the end of the day, the other thing

069I think that's extremely important to think about is we're we're here for kids. We're we're in the field of education and giving the kids the best opportunity for growth that we can. That requires money. Um, I think the other big thing to take away from Luke's presentation is as we as we shift from and I'm sure it went over here with a lot of people, which I get. We talked about shifting from tax rate to tax levy conversations as a board. That's what we that's what we've done at Cal that that hasn't that's not going to affect us. I look at what we need to spend to operate and that's what I try to go for. It was why it was easy last year to be able to drop the rate a little bit, assess

070value, and continue to go up. If we got lucky and assessed value continues to go up to 12, 15, 18%, it would have a minimal effect on us. But that's not going to happen. We've already seen it. This year's NAB was a net increase of 2%. That's where we're at. Last year was 12 or 13. So, we're already seeing the effects of SEA1. Questions, comments there. I'm going to try to hand out more dive into [Applause] this is kind of a good There's one. >> You just know where it [Music] >> That's right. There might be two Keep it together. >> We can cut down on paper clips. money. We have more. These guys have more. That was Did I do Did I do it correctly? >> That was my last topic. >> You want

071to just take a quick look at the last gene? It should be the other one with I think it this is just kind of breaking down some of the maintenance and other costs that we annually might want to take a look at. >> I'm not really going to talk about I I covered it in that first sheet. All of those are just kind of subtotals of what appears on the first sheet I gave you with all of the expenses where it breaks down in maintenance. Most of that sheet it's in maintenance to see it. The first the first sheet of the pack is the performing arts center changes and the renovation. And you want to get to the important stuff, you can scroll back to the last two pages. where Darmman Miller has their cost

072assess assessment for performing arts. The first one performing arts. The second one is the student activity center. Um I I guess I'm more for discussion now. We've already hit this topic multiple times. So I I guess I don't know how you want to proceed. Do you want to discuss some things? if you want to. >> I guess my first question would be I'm assuming that >> we're probably 99% sure that this is the layout we're going to go with. >> Yeah, I understand there can be changes. >> Yeah, we start demoing stuff and running the stuff we don't know about. >> Correct. We are as close as we can get. >> So, there won't be anything I think that would change that would add cost. Let's put it that way. And I think we've we've

073met quite a few times and there's been a lot of input provided that we've been able to go in and make some changes and especially from the teachers who are in those spaces that's been very helpful to go back and add different things that they need for their their teaching. Do we have any kind of projected schedule on how long it's going to take? >> Six months, 18 months >> because you speak to that at all. that construction. >> Yeah. Just focus on >> the other thing like Dave Holt had talked about before, right? If we're tearing all this apart, >> right? >> Where are they going to perform or practice >> right >> while we're doing this? So, we have I mean that's part of it. So, it's going to be a hybrid discussion

074at the school is I guess with whatever contractor is on board with there's there's time and money. It's hard to have both. So, if we want to make sure we're in operation, you're going to get smaller chunks to be able to do the construction with and kind of peace meal it moving areas so the students can move around and occupy. Obviously, with any K12, you're going to push primarily uh during the summer months. So I would say a lot of the renovation inside would hammer through three months of summer and then move to the expansion or do that in tandem when school comes back try to move in. So I'm going to say that's probably a 9month construction process start to finish there. >> So let's throw weather in a year. >> Inside most of

075>> Yeah. You get under rope before if it doesn't rain or you have heavy snow, >> right? And yet you got to take into consideration. I mean plan for 12 months. Get it done at nine. Awesome. >> But don't plan for nine months to get stuff. >> What's my concern with Brandon Snow if we're working inside? I miss something. >> Well, there's an awful lot of construction here that's not inside. >> Just the just the outside part of the choir room would be they'll have that done, I would assume, before we have too much worry. But I'm not buying anything here. I I like doing that. >> Oh, really? You can plan >> I'd rather be much longer around >> plan conservative your marking and that's just >> I would say if we were building

076a construction schedule that we were building off 9 month schedule and typically we hit that schedule we work in rain days and again what's it look like >> it's 9 months awesome if it's 12 months okay >> well and even if it was a year that would be two summers where the summers would be school time >> so that sounds great to I'll let these guys speak to that because that conversation will be time. >> I'm not saying they got to call us right now. >> Well, we have I'm just saying that we got to have that plan in place. Right. >> Right. >> And they know that's my favorite word. >> What's the plan? So right now we've been working with administration to figure out how we flex our space, what we do, whether

077we flex some classes to the middle school where we already do some things. Chris and I are talking about bands there. We talked to Marcus about how we share space in the administration building studios has multiple theater classes now. So we think we can manage away from the work side as long as we need to. Now obviously we want to be back in but with administration and we're pretty well committed to being able to flex our space and since we're not penetrating the auditorium wall right now. We're going to be able to use it as classroom space if we need to. Also, there will be some times where if we are penetrating the back wall or something, students might have to get out of the area. But right now, we're going to use the auditorium,

078we're going to use the middle school, we're going to use other flex space around the building like studios, other places that administration is trying to help us with so we can be out of there and not hold up. You know, we're we're open in six months and nine months is the long term. Okay. So that's >> that's what I mean a 9month duration to me like you guys are submitting the RFP. So if as the school corporation you're saying this is a 9month project they're signing on to that project and I'm like you're not incurring more costs if they're taking 12 months to do the project that's on the contract. But I like I would never go in thinking I need 30% fluff in my schedule. Um I think that's a nine month project. I

079I'm not so contractor >> and I'm not concerned with the administration. I'm concerned with the public. When you tell them it's going to be a 9month project, they're going to want it done in 9 months. No excuses, right? And they want the parents that are going to have their kids involved in this during and after, they're going to want to know, right? They're going to want to know, okay, so where am I going to take my kids? Do I have to take them to the middle school? I don't think they're going to care if they have to take them to the middle school. They just want to know. That'll all be communicated up. >> That's all part of again thinking about how we're going to sell this to the community. >> It's got to be

080out there. It's got to be part of the plan. It's got to be open for discussion. And I think the earlier the better. The more open we are, the better. But whatever we say we're going to do, that's what we got to do. Well, I think we're trying really hard to make sure our parents know that we're not going to impact programming. And we've set a good example right now. Athletics are going on full board here without impacting kid programming. That's what we're going to try to do, too. We're not going to cancel concerts or cancel shows because mobility. We're going to go strong this class every afternoon. And I think we set a good example on this project right now. Things are going great. There's construction everywhere. So all you say >> I think

081you guys did a great job with the preliminary plan. I just want to make sure we don't fall short. >> Right. I appreciate that. >> To add to that point, wasn't there discussion at one of the meetings as well as far as which project we were going to do first? You know, was it has it been decided? Is the pack going to be started first or the student activity center or are they both going to be done simultaneously? I thought there was some discussion that the sack was going to be built first with the plan that then the fine arts people would be able to move over and utilize that space while the um performing arts was being built. Did I dream that up or >> we talked about something similar to that? But I

082mean it'll come down to the bid and who who receives the bids and how much manpower they have. Um, you know, I I was going to ask at some point, you know, is it going to be Do you think it's likely that like an FCI or whoever would bid on both projects? >> I think so, too. >> I think so. They're different forms. You get into interior renovation work and you have I mean, we're looking pre-enge on the sack, I think. >> So, that you got two styles of work that I think crews can be working simultaneously as long as the site allows and in operations. I think kind of what we have going on now, I think it's very peaceful both these projects could be hang going on at the same time. >> Yeah.

083>> Not completely simultaneously but going on at the same time for sure. >> Yeah. I mean with the structural bit bid build of the sack building I mean to Tyler's point that's going to go up much faster than you know to Tony's point where you've got to mimic the outside of the school. you know, the performing arts is going to take some more time and detail and um a little bit more finesse than >> right >> the large square footage building [Applause] >> other comments or anything you can scroll through. I mean, again, I I want to handle whatever you guys want as you go to the next pages. That's where the student activity center comes in. Um it's it's going to be roughly a little over 33,000 square foot. Um you know some of

084the highlights are obviously it has a four basketball courts but would also have batted cages for baseball and softball. We have the the walking running track around it. Obviously volleyball tennis I mean drum line flag core agriculture classes have all expressed interest in me. I mean, everybody's going to be using it. Uh, I know I know we've had discussions that started way back in the operations committee. I'm happy to have them again in terms of is this a need? Um, I can speak to the fact that we've had unified sports. We've had boys volleyball, girls wrestling, girls select football. Our facilities are used day in and day out till at least 9:00 p.m. All of them. any of these gentlemen that I know are in extracurriculars can attest to the fact that it's almost impossible

085to find practice space. So there's there's an absolute necessity for more space on campus for all of our students, not not just athletes, not just performing arts, all of them will take PE classes will take advantage of this facility. Um, you know, we we will be able to host tournaments for different sports, different events, different everything. When you have the student activity center sitting right next to your artillery gym, which is of course right across the hall from your main gym, now you've got an area that's pretty large. You can do a lot of different things in that area. So, >> I don't remember saying anything about separation curtains. Yeah, there will be curtains for all four. Thank you. That's a good point. You know, there will be you'll be you'll have the ability to

086splice it up into four different areas if you want to or two or one big open area. >> And and I know I know this is a general layout, but when we present to the public, it might be beneficial to show one basketball court, one volleyball court, >> like show the lines because you know, >> show the difference. Show them the difference as to who all is going to be using this. If it's going to be a multi-purpose, >> okay, set one side set one side of that up for >> for the batting cages and set the other one up for gymnastics. So, one for basketball had >> again you might want to highlight that we added boys volleyball. >> Right. And then not that nothing girls swag football is going to be in there,

087but it might be. >> Well, I mean, I think to your point of the weather, you know, this is just, you know, stuff that's getting cancelled from out outdoors or Indiana weather that's not cooperating in the fall or spring. I mean, this this provides space for those activities to be included. >> And we're currently trying to update numbers, just the amount of practices, number of kids involved in all these different programs. And so, We hope to have current numbers for the current year programs that are involved. It's it's mind-blowing. >> And this isn't just high school level like this is I mean it will be attached to the high school but it's not um limited to just high school students living middle school. I mean we have so many elementary programs too that are needing

088extra space that this will be utilized by as well. I do think another big talking point here is that the commons, which is the cafeteria at the high school, is being used as a practice space for different avenues. So, what that does is it's got to be quickly clean, torn down, and then reset. So, you do have a lot of that where the commons, yes, it's a great space and multifeted to be used. It's set up for cafeteria to lunch, not having to tear down tables. It's a lot of labor and intense on custodians and kids doing a lot of that work that would be safe using a facility that you can just roll into practice in and and conduct that have practices done at a relatively decent hour rather than having kids at school.

089>> So labor clean the facility a lot but I see your point. Um it does you know space so you know getting them in there space. >> So the the multi-purpose is 30,000 ft >> 32 a little over 32 32,120 >> additional new for the performing arts. >> Say that again. I'm sorry. >> Additional square footage for performing arts. >> What was it? >> Just a little >> Yeah. A little under 10,000 is what I wanted to say. >> We're looking at roughly 40,000 square foot of new for Okay, so we talked about and again it's something we need to review because David brought up that nationwide the average cost to maintain square footage is four bucks. So if we're adding 40,000 square ft, $160,000 a year. Now we've got over a million square ft,

090right? Or right at a million square feet. >> We'll be close to that after this. Well, not quite. About 900,000. We're 839. >> So 900,000 based on our budget for maintenance would be somewhere around 3.6 million a year, right? >> Yeah. Well, we've I've done the math and I've asked I've asked Tyler, I've asked other people on maintenance, you know, in maintenance world, they came$2 to $3 per square foot. So the additional cost of the sack, there shouldn't be any with I not going to count the 9,000 that's going that's going to have the same age. I don't anticipate a huge increase from that. Maybe there will be, but the sack obviously will be. I I'm being pretty conservative about $7,000 a year in additional maintenance for the sack portion. just using numbers that now

091if I went four dollars that would be more obviously but I I was four hours so um I I was gauging it on and that's why I have like the utilities and things like that. You can see kind of where we fall. I know it's going to add um that's and you can kind of see where utilities go. I know one one of your points on our outline was trying to move forward. As I look at things and you can see like we've gone 878 680 820 there's no trend like our last year in utilities is under 900,000 and year four was a million1. I I can't trend it because it changes. Obviously, if you have a terrible winter, you know, if somebody leaves a toilet running, we we've had that happen. >> We've had

092an increased emphasis on energy savings. >> So, and and we have to have energy savings, but you know, I'm I'm trying to build in the maintenance. It's not exact science, obviously. I always try to go as cons when I say conservative, that means I'm trying to go a higher number than what I think it's going to be. So, you know, I'm trying to build in about $100,000 between these two projects and additional maintenance costs. As I've talked to other people, they think that sounds reasonable. I've talked to other people that have added sachs and, you know, they haven't seen a huge spike other than utility. You know, if we will have AC obviously, that's probably your biggest maintenance cost to it. Um, we will have expectations of coaches and people using it to keep it

093clean, to do things like that. Um, I'm hopeful being a brand new maintenance. >> Thank you [Music] practicing outside, right? >> And by the way, with the sack, it will also do that entire pool. >> Yeah, that's true. >> So, the entire hack will be revamped on that end when we add the sack because currently our aux gym um and a lot of spaces down there, locker rooms are not don't have air conditioning. They all will once this project is done. >> That is one question I had in all the HVAC mechanical stuff building like there's no force footage in the sack from mechanical. >> It's there. It's on the back side of the hall. There's kind of an upstairs. You look at the sheep. It's kind of blew I blew up for you. >>

094Okay. >> Where it says storage and you see the electrical and all that. Yeah, that space is elevated in it. >> Yeah, >> for storage as well. Yeah, >> I I know we had that question before. >> I don't know. I mean, most of the sites I've visited are opened up, right? That's why I'm assuming probably what they're going to do for this. >> Obviously, I know the price tags are large. Um, they are where they are and happy. I'm hopeful. I think performing arts I've I've twisted as many arms as I can Arman Miller to try to work things out. I've talked to enough contractors that have told me you're you're pretty pinpointed in there. I think we're going to fall in that range. The sack, I'm not convinced I can't get maybe a

095little more savings out of, but I've heard from a lot of people you're pretty dialed in there because they're they're going up in different places. You see them opening, so they have a pretty good gauge of what the cost is going to be. We are not I think it's important to emphasize especially the community we are not building Taj Mahal Hall here. We are doing what we need to do spacewise. Um I could have saved maybe Tyler a million maybe a little more than half. We've gone to three quarts instead of four with the square footage. You still need the space if you have three. I just thought it was better to go with that extra footage to get four if if you're going to do it. And I know a million dollar is a

096lot of money. I'm not saying it's not, but you're talking about something that's going to be here long after we're all >> And I think >> Well, and we also have to keep in mind that gymnastics might have to be absorbed from the CCC. So, >> you could go ahead and chalk up gymnastics into that, you know, four quarter area. >> Well, again, if we're going to say that, then we need to do that. That's the only thing that what we say we're going to do is what we got to do. If we say we're going to bring gymnasts over as part of the project and that's what's happening CCC. >> No, that's not right. >> We may not have that option. >> Marcus on new activities that are allowed. what's coming down the pipeline.

097You know, that's the problem. In four years, we could have two or three. >> Yeah. One one of the big ones, I don't want to speak for markets, but I tell you one of the ones that I see too are robotics. >> That's been huge. I think like they needed more space when they hosted before. They were looking for it. Again, if you have the ability to host things, you become very popular. We're learning that from our, you know, our band can talk to that. We've added what two huge schools Warsawstead Carol has three next Saturday got about four or 5,000 people on campus, >> right? So if if you want to see and I know, you know, I've heard the naysayers tell me, you know, well, you don't you don't build something for one

098event. I don't know that I can agree with that's going to be a massive revenue stream for band that will only add more activities for that football stadium when people see that. Um, that's if you if you have a chance to be here next Saturday, knock on wood that you know it's going to be ready to go. >> It's going to be ready. >> You're going to I mean those stands will be filled on both sides. Filled. >> And that's what we want to see. We want to see it get used. We want to see word of mouth get out. We have a nice facility. Um, you know, that's just our goal. And you got you got one big massive unknown. Got one big what? I'm sorry. >> You got a massive unknown. The states

099I can't say they're all brilliant, right? >> There's massive changes going on in the taxpays. >> Okay. >> Absolutely. >> We're not sure what all that's going how that's going to shake out. >> Absolutely. >> I don't think they do. >> So there's a risk. >> Absolutely. >> Every business has a risk, right? So we just got to be making sure that again we got a plan that takes consider. Okay, here's what we do if this happens, >> right? >> I'm not saying it stops the project. >> No, >> they're just saying we got to have plan B. The immediate plan is from from Luke's numbers is the go bond that I'll be bringing to the board. That's going to be a smaller bond that's going to have that deferred maintenance piece built in that

100will give us hopefully that cushion if we need the cushion. I'm hopeful we're going to be able to make some adjustments, bring in, you know, other forms of revenue. I think this community supports the school district. It always has in my 34 years. Um, again, I don't want to go for an operations reference. I I would not bring this to the board. And again, you're absolutely right. There there are unknowns, but I'm just telling you from my personal opinion, your CFO, I would not bring these ideas to you if I didn't feel confident that we will be able to ride the storm. I think our district is positioned well not only financially here but in the but in the property tax world we we don't have any tax we don't have any circuit breaker but

101very little and that's when school districts get hammered when they hit that 2% circuit breaker and they lose all of that revenue and that's what SCA1 is doing for so many districts like Northwest Allen you know massive operations referendum Southwest all the big boys are hurting because they're losing millions. I think we're going to lose I'm hopeful again obviously an estimate5 $600,000 remember last year what didn't I do I didn't transfer from Ed dos first time in three or four years half a million dollars we've done Luke is 100% right why did I not do that Chris McGuru isn't here I didn't do it because I was DEA president the year before and I know exactly how teachers feel about ed ops transfers okay that's money taken away from their raises I don't want to

102do that um almost everybody I know is going to 15% at DOS to survive and they're not giving teachers raises. That's that's the only way you can do it, right? You give a raise, I give a minimal raise, it's three $400,000 additional on my education fund. And the biggest thing for the public and everybody to understand, I'm sure the board understands is you have education fund that pays my teachers and all my support staff and all educational things and operations pays to maintain your buildings. So custodians, maintenance people, me, people like that, business partner, state, that's all operations. But education, that's strictly driven by our ADM and state support. The state increased our support by 2%. That's not a lot, right? But the talk was there was going to be zero. And the IASBO business

103association lobbyed hard and they changed it. And we're very grateful for the 2%. But you start thinking 2%. Again, the rule with the education fund is 65% has to go to teachers, salaries, and benefits of that state support. So now I'm already down to 35%. Well, about 15 to 20% of that is taken up with support staff, salaries, and benefits. So education, remember I showed you the operations. I'll show you the the education. That's worse. Salaries and benefits make up probably 85 90% of the education fund >> pair of professionals go into education. >> Yes sir. Yeah they are support staff. >> The biggest thing is again I'm getting a plan around the maintenance and that's the biggest thing is m preventive maintenance maintenance plan. I don't think I think we'd be remiss if we

104had wrote off an operational simply because you know that's a good way for us to show transparency. It forces us to actually analyze our budget numbers and actually execute to our budget. So it gives a little bit more transparency and control and community will know exactly what we're maintaining and I think that they would support that. So I think we should explore it because I'm not opposed to that >> because I mean again the key point is maintaining our our buildings and again and having a plan. Everything has always been for seven years I said we got to have a strategic plan. So when I did this seven years ago, so a 3 to five strategic plan on how we get all this stuff plus all the other maintenance stuff that we still have outst

105we've done a heck of a job knocking it out. Um you know again roofing and as I said before at some point we got to refreshing the inside the high school that hasn't been done all all throughout. We got we got to refresh the house. So um I'd like to keep those goals focused and again I'm not not opposed to operation ref room to that to support this because we got to maintain right and I think we we'd be remiss if we didn't support >> and I think I think the operations referendum talk although I hope we don't come to that >> comes in 2027 2028 that would be the year where I would start to see when when 2028 hits and we lose l >> that's the one time that I'm afraid but I'm

106just a believer that the state's going to have to change I hope so. >> A lot of places is going away. >> I think they can't survive. >> I think you were showing that that because of state funding and the way we're going in the operations community that we didn't have enough to really maintain our buildings and that's why we had to do bonds and things like that. So, um you know, I mean, we know that the state is is not right and operational referendum to me makes sense because you can soft sell that. You can tell them exactly what it's going for and you show them the results. And to me, that's the way we want. I wouldn't explore it. I don't know if that's the right move, but you know, I think it's

107it's something we should vet out and be responsible. >> Talking to the other districts, they have the same exact same problem. >> Fremont has the same problem. Do referendums for large maintenance activities. >> Everybody is right here. >> If I'm not mistaken, I could be wrong here. If you did an operational referendum, you're not paying interest rate on that million dollar. So, but you're increasing you're increasing your tax. >> Absolutely understood that taxpayer, which is what I try to >> understood. But you're not you're not um paying interest on that where we got $21 million in interest on a correct $30 million. >> Correct. It's >> so just again again those are the analysis that we need to do, >> right? Referendum is over the circuit breaker too. So circuit breaker that does not kick

108in for them. Correct. pros, cons again, put it out there and then let the folks decide >> and and as far as the strategic plan, I have gone through it and I will share with the board. You'll be surprised at how much we've knocked out like like the biggest ticket items left after because within the go bond besides deferred maintenance will be addressing middle school, high school roof, James R. Watts, and HVAC. Those were all top tier level things. Um, I think the next biggest ticket item is media centers. I mean, we're that's how far down the list we've made. We've done a fantastic job as a district board, everybody of knocking that list out. I couldn't believe it when I was going over because I knew that would come up. >> So, again, it's

109something great to show, right? >> And I know these guys been busting their butts. So, that's what I'm saying. >> We got that. Now, we got Now we got to the position. We're getting to the position. Now, we got to get do that preventive maintenance. Take that hook, raise that bar, right? And if that takes an operational referendum, we have to show the people how it's going to happen and that's what's going to take it. >> And another reason for the pause in my thinking for a referendum is the maintenance staff and I can let Matt speak more because he deals with them is the maintenance staff we now have in place. And I'm not saying anything derived toward anybody we've had before, but we have, like I said earlier, we have an HVAC licensed

110person that is massive. I I have to wait to see what that's going to save us. But in my mind, that's going to save us hundreds of thousands of dollars annually and in some way or another. We have another one that has what, 20, what does Jim have? 21 years of experience. I mean, we've got somebody that can, you know, as we look to do small renovations, things like that, that has been in construction in a construction that we have the people in place now. we're not going to have to, you know, farm out maintenance. And I think I want to wait a year to see is it going to bear the fruit that I think it's going to market, too. So, I mean, I wouldn't count any ROI, a huge ROI right away, but

111I see that over time. >> You should see about 35%. I >> I I don't agree. I think it will be with the staff we have in place. I'm I'm extremely happy. But the last thing I'm sure you're aware that you want to do with an operations referendum is have a healthy cash balance because you just said there it's all transparent, excuse me, we have a cash >> that's what I'm saying. >> We're in a position >> I'm not ready to do a referendum when they can log in and see that I have you know >> you're not going to need to because it's not ready to go next year anyway. So but I'm saying as we plan the future for that to hear that though >> because to me it's a better control it's

112a better transparency tool and it gains trust from the community. you know, it's just where I live. Okay. Now, as far as, you know, one thing I have concerned about all this is is the assessed value and things like that and having a correction there. So, there's the risk that we're going to have to discuss. No, I mean, it's a huge risk and it's a huge concern. I look at the home prices today and a starting teacher wage and there's no way these t they can afford a house they can afford and even renting and things like that. We've got a huge problem. Okay. Well, everybody's got it as far as and we got concern. We got to be we got to balance not compounding on, right? >> And again, we're not totally control that.

113We have a small portion. There's other entities that control. So, that's just that's where I'm at. We got a lot we got a lot to think about. Um, moving the bill forward. So, >> I like to see the housing additions going up. Houses being built. I mean, that's one of the key components here. We just don't have enough housing period for the influx and it's only going to get worse because Carol's running out of space, right? Huntertown is all coming our way. >> And so what else? Anything else? Questions or comments? >> Does anyone in the audience have any questions or comments? I know some of us have discussed this for quite a few months now and we've seen some of these preliminary renderings. So, I just want to open it up to anyone who

114want to share this information and we want to get it out to the public. So, any questions, comments or thoughts? I guess my only question would be to the board. Is there anything that has not been provided or other information, anything else that's not been covered that we need to try to get around for anybody before it's presented? I guess is my final question. >> A written plan or meet the outline that I provided. >> Okay. >> And I'm not saying it has to be 30 pages. >> That's not what I'm saying. >> That's good. was 30 pages or you wouldn't read it for question that we keep getting asked since we have started talking about this is time it's the number one thing our parents ask >> sure >> when when when are the

115dates >> so for the >> for the pack for the pack sack stuff okay for the big bond right >> we will I will bring that to the board in October >> for the first public hearing >> so then they can watch the timeline >> so We will know by the December board meeting if it's a go or not. The board will vote on it in November. >> Okay. >> Right. >> So, we'll just continue to do what we do. Tell them to watch the board meetings and watch the timeline there. That's what we've been telling them. Like that is the number one question. It's like time. >> The board vote will be in November and then there's the 30-day waiting period in case anybody in the public wants to contest it. And I don't

116think it's a secret that obviously somebody did in the last one, they have to get their 500 signature. So they'll have until I can't remember the date of November board meeting, but whatever that is to the 30 days past that. If those 30 days pass, then the bond is done and we will sell it in in my plan was I wanted to sell it in 2026 because that allows us to not have a payment until 2027 to hurt our debt service structure. Now, with with with the information that was presented tonight and that referendums have to be at general assembly voting, >> if it goes to referendum, does that have to go all the way to November? Y we wouldn't be able to do anything until November, which is why we're doing a a geo

117bond that I'll bring in at the September meeting um to to protect the debt service fund because yeah, if it if it if the referendum, this is important for everyone to understand. If it does go to a referendum, which I'm hoping it does, we we're going to be active this time around with anyone that has questions, concerns, things like that. I want them to reach out. You know, obviously the biggest thing I ever hear from everybody is, you know, my taxes have been the sky high. Well, I will pull up any individual's tax sheet and show them what's happened when when we've done our bonds. Okay. The the biggest issue for the taxpayer is is to understand the concept that our assessed value has skyrocketed in the last few years. Nothing the school is doing,

118you've seen what it would normally tax rate, it's gone down every year. Nothing we're doing is affecting your tax rate in a negative way. It's the fact that your home is becoming worth so much more in the eyes of the county. I when you talk 24% increase, that's one piece of your taxes, right? The other piece is the tax break. So, if your NAB is skyrocketing, which is why they did SEA1, right? To try to protect and give some more credits to drive that number down. So, that's the biggest question I hear. Um, and I and I want to address it the best I can. >> The only suggestion I would make is I would say you start pushing that agenda now because then you don't have to worry about it in November. >> And

119and we have I think we have it in Yep. as actively as we can. Anyone that has questions, I tell everybody all the time, I haven't had a lot. I feel like there's a lot of positive vibes behind it. I think people in and I could be wrong. I think a lot more people in the community are behind these projects. And I think part of it might be the fact that they've seen the bleachers going up. They've seen the band practice area. They've seen our kids. If anybody's had a chance to be out and see I mean that's that's why we're all here, right? When I when I went to that band night, it was unbelievable. >> It's a huge night. >> It's huge. There's a ton of people over there. Just this is the

120practice area. >> The kids are excited, you know. I mean, >> that's the best part. That's why we're here. Are these two projects together? I mean, are these >> They would be on the same bond. Yeah. >> Yeah. Together on the same bond, you know? >> They don't be separated. >> No. No. [Laughter] >> Anything else? I don't know. I don't know how this works. Do you >> work? We do. >> As long as everybody's ready. >> There's the stand of the facilities. >> What did you say? >> I said is the stand of the session or the other. >> Both for all. >> Well, okay. So, this will conclude our meeting tonight. Um, I do encourage anyone watching online or in the public um, to please reach out to any board members, administration, any

121faculty, staff that we can get you the answers. We may not have them right on the street, but we'll get you the answers and information that you need. So, um, calling tonight, we do have an executive session. Our next regular board meeting is Tuesday, September 16th. Um, that'll be here at central office at 6 p.m. Meeting is adjourned. Thank you.