001We're gonna um hold the order of the public hearing um on 1028 additional appropriation for 2025 general obligation. Is that >> so want to go ahead and start with an overview of what we plan for the project and then Jeff can present some financials. The purpose for the 2025 uh general obligation bond would be to upgrade the HVAC system at Brush Creek. That's the number one goal. It could also slide into a few select HVAC units in other areas of the corporation. But that's the main focus and that's that's a complete software upgrade system upgrade to where uh it's it's just over what 25 years old now. So, it's just needs to be upgraded. I mean, that's the main purpose of it. And it's been on the capital project list for at least the last
002five years that I've been here that I know of. >> And we included long-term maintenance at every facility open so that if we just really luck out and uh construction rates and come in really low and we have extra funds that we can work on other capital projects, we've already identified on our list. So, we have that open flexibility. All right, next up would be um Jeff Hammond from Baker Tilly to lead us through some slides. >> Good evening everyone. Jeff H with Baker Tilly. Uh we serve as the school corporation municipal advisor. I'm I've got about five slides I'm going to walk through with you all this evening. Um going to look at your existing bonds, outstanding and existing bond payments. and then I will also talk through some of the financial parameters that
003will be in the resolutions being considered. So I will begin with just an overview of um the school corporation's existing bonds. So what we're looking at here is a chart of all of the bonds currently outstanding and you can also see what the total annual payment is in each year. You'll notice in 2025 there is a step down um going into 2026 from the level payments in 2025. Uh we're at about $4.3 million in 25 and stepping down to about 4 million in 2026. So I will show you a few scenarios of what a potential bond repayment could look like. Um so just keep this slide here in mind, but uh I will note that in 2034 all of the bonds that the school corporation currently has outstanding will be fully repaid and matured at
004that point. I will We'll skip over this one unless you've got really good eyesight. That's a tough one to read. That's just the payments that populates that chart we just looked at. So you can see uh maybe in your board packets the annual payment associated with each bond and then the total down there at the bottom right corner. So I did want to go over the school's uh general obligation bonding capacity. Since these bonds will be general obligation bonds, I wanted to spend a minute on this slide here. So all school corporations. In fact, all municipalities in Indiana are subject to this formula. When it comes to issuing general obligation bonds, when you say or when you hear general obligation bond or geo capacity, it doesn't mean your total capacity to issue bonds, but it
005does mean this governs how much you could issue in that geo bond mechanism. So, the formula is is an interesting one, but this kind of walks you through how we get to your current geo bond capacity. We start with the current net assessed value. In 2025, that was uh a little over 1.1 billion for the school corporation. We then need to divide by three and take 2% of that. And that gets you to your debt limit as a general obligation bond, which is currently 7,782,452. And then the final step is to subtract the principal outstanding on any existing general obligation bonds that have already been issued. The school corporation issued go bonds in 2023 and 2024. So when we subtract out the principle on those bonds that is still outstanding, it gets us to your
006current capacity of just over $3.3 million. So on my next slide, I just want to highlight some of the financial parameters that will be in the resolutions considered by the board. I will note that all of these are maximums. So they are not to exceed numbers. Um so the school could always issue less than this amount, but we cannot exceed these amounts. We've also when it comes to estimating interest expense and the maximum payments, we are intentionally conservative at this point to allow you to fibility to decide things like the the ultimate repayment term on the bonds and um also to account for any potential fluctuations in interest rates between now and the time that the bonds will be sold. So on these maximums we are establishing the the max borrowing amount of $2.9 million
007that will translate to about $2.7 million that will be available for hard and soft construction costs. Again, we're conservative in this proceeds available for projects number because we don't want you to count on receiving more dollars than you actually receive. Um, these costs that we've built in here, we're estimating on the high end as well. The reason that there's a difference between the borrowing amount and what you can actually spend towards the project is because similar to if you were to take out a loan in your personal life, there's issuance costs associated with with issuing those bonds. We're also establishing the maximum repayment term at 20 years. and the estimated interest expense. I provided a range here and it will correspond to the scenarios I'll show here in a few slides, but this is this
008is a range. It will vary depending on the ultimate repayment term selected. The lower end of that is based on about a 4-year repayment and the upper end of the 1,430,000 is based on a 15 repayment. We're also establishing the maximum annual payment. So this is the uh max payment in any given year on this bond issue of just under $1.6 million. And that maximum payment translates to an estimated tax rate based on your current and assessed value of 12.63. The final statistic on this page here is um we are able to issue these bonds given that step down we saw a few slides ago in the payments from 25 to um we are able to issue these bonds without an increase to the tax rate. However, you have the flexibility to go up to
009that maximum 12.63 cents um associated with this project. So, my last slide and I I will well my last table slide before we get to a couple charts. I'll be quick on this one. This just shows you three different repayment scenarios that you could consider doing with these bonds. Again, four years, 10 years, years. You can see the estimated interest expense associated with each of those as well as the estimated maximum payment associated with each of those scenarios. The trade-off with considering the repayment term, the shorter you take to repay the bonds, the lessen interest that occurs over the lifetime of that borrowing. However, it does also mean a higher annual payment associated with that. So, the last three, I will just go quickly over these since this could be determined at a later time,
010but I did want to show you three potential repayment scenarios. The blue represents your existing bond payments that we looked at on the first slide. The yellow represents a potential repayment on the 2025 general obligation bond. This would be the four-year scenario. So, you see the the goal here with this was to keep payments in line with where they were in 2025, essentially filling in those step downs in your existing bond payments. And then the next two slides look very similar. Um this is the 10ear scenario. So you see a scenario like this gives availability in 2027. There's an additional step down uh which does provide a little flexibility to issue another series of bonds if needed dictate to uh still maintain a stable tax rate. And then the final one is just a 20-year
011repayment. So this would be the maximum repayment term the school corporation can pursue. Um and again this stretches your payments out to about But again builds more flexibility in future years in terms of capacity. That is the last of my slides. Are there any questions that I can answer to this project? >> Any questions from the board? >> Thank you for coming. >> Thank you. So, this is a public hearing. Um, so this is your time if you would like to make any public um take any public input or comment on the proposed projects and bond. Hearing none, we'll adjourn the meeting.