001All right. Well, we're going to go ahead and get started with our work session here um with policy and analytics. You want to start at Chris? >> Yeah, I'll just highlight something here real fast. Uh I think we met um in June when policy or SEO came and shared us uh some of the high level 30,000 foot view impacts potential impacts related to Senate enrolled act one. And so that's when we partnered up with policy analytics to take a little bit of a deeper dive uh getting into the parcel uh levels uh to hopefully get a better picture of uh or a truer picture of what those impacts may uh look like. And so April is joining us from policy analytics uh to share a little bit about the information that they found out uh
002from that study. So, well, thank you. Um, again, I'm April Ferling. I'm with Policy Analytics. We are based out of Minneapolis and we do parcel level data analysis for districts based, um, projecting their revenue and net assess values based on that parcel level. So, um, as your certified net assess value is released, we also pull that uh, parcel level data and then we pull that into this report and then we'll have an updated report once we receive all of that information. So this is preliminary based on uh two to four percent growth on the net assessed value um looking at projections um uh kind of early on so everyone can get a feel of what the new deductions are going to be doing to assess value. So um I'll just have you kind of go
003through the slide. So the first slide um that we're going to talk through um what it looks like to your tax rate to your tax levy and then we'll touch really quickly on what that impact is to the taxpayer. So you can go to the next slide. Um the first slide here, we're just going to show you the basics of net assessed value, the calculation to get the rate in the levy. So, as we've seen the past few years, the net assessed value has been growing. So, to receive the exact same levies or um generate more levies, you could keep the rate the same or you could drop the rate. Well, now as net assessed values may be driving down due to deductions, to get the exact same levy, the rate's going to have to
004increase. So just kind of think of this calculation as we go through the next few slides to talk about um what that impact to the tax rate is. So uh next so we'll tell you about the handful of changes that just um happened in Senate rolled act one. Uh they are now decreasing or phasing out the standard deduction and increasing the supplemental deduction. So they're phasing out the standard deduction that was based on $48,000. As your home assessed value would grow that became lesser of a percentage. So they're phasing that deduction out over the next six years and they're increasing the supplemental deductions. So by the end in 2031, your home will be taxed on onethird of its value. So that's the first change. Next change is they're creating a local property tax credit. So
005homeowners um are getting a 10% max $300 credit on their liability. So, just for simple math, if my net A on my home was $200,000, my liability would be 1%, so $2,000, but they're creating that 10% um credit. So, now I only have to pay $1,800. So, I will see a credit of $200 on my tax liability. So, that essentially is creating an additional circuit breaker. So, it's dollars that the district would have received, but now they're creating this uh credit. amount is something you do not receive. So, we'll talk about what that looks like to the district um towards the end of the slides here. So, then um the additional changes to the 2% category. So, the um u agriculture nonhomesteads and the long-term care. So, they're increasing the deductions in that category. And
006then they're also changing the ad a base rate calculation from 8% to 9%. And then finally for the business personal property tax changes on the next slide. It is actually kind of twofold here. So um and please stop me if I'm going too quickly. I just want to go through the changes quickly and then talk more about what the impact may be. So as the business personal property tax prior to Senate Roll, anything under the minimous amount of $80,000 was tax exempt. So now they've increased that limit to $2 million. So, if you are a business and you have a piece of equipment that is under $2 million in value, you now are tax exempt on that piece of equipment. So, that's the first piece. And we have modeled that in our um projections that
007all of that equipment that was reported under $2 million now will be tax exempt and that'll start in 2027. What we don't have in our model is the change that they are creating to that value for. So, if you're a business owner, you have a piece of equipment and you do the follow the depreciation cycle down to 30% and you would have stayed at that um and then and pay taxes on 30% of that piece of equipment. Well, now you can follow the depreciation cycle down to zero on any new equipment purchased after 2025. So, we don't know what businesses are going to do to get creative to save some dollars and being taxed on their equipment. So, if they're going to create maybe an LLC and buy their equipment, it's considered new equipment to
008this LLC if they're going to create it. Or if they're going to sell their equipment and purchase new, then it can follow that scale and go down to a zero value and be tax exempt after the depreciation cycle. So, businesses are going to get creative. We know that it's not modeled in our example or in our projections just because we don't know what will happen. But we do know it's going to have an impact um over the next you know x amount of years as long as this is still in in legislation that they will be able to take that value um down to zero to be tax exempt. And then finally taking the uh petition remmonstrance amount um I'm sorry that automatic to referendum amount from 80 cents to 70 cents. So, prior um
009to this, we knew that anything between 40 cents and 80 cents was subject to referendum. Anything over 80 cents was directly sent to referendum, but now they've brought it down to 70. So, kind of closing that gap. Um so, let's just wanted to talk about just kind of debt tax rate there and we'll talk about where you're at coming up. So, what does that look like for you guys? The tax burden shift. So, we're just looking at 25, 26, and 2031. So really what happens in 26 is just that homestead credit up to 1% or $300 max to the homeowners. So not much of a shift in that tax burden in 26. But by the time we get to 2031, you'll see that the agriculture decreases a little bit, the business or I'm sorry, the
010personal decreases a little bit and the residential does increase. So kind of think of it as we're showing it as the exact same size of pi in all three charts here, but actually by the time it gets to 2031, it's actually a smaller pie. And as they make those deductions, it kind of changes the slice of the pie who takes on that tax permission. So looking at your net assessed value projection. So if we look at this slide, the green is the gross assessed value and then the blue is the net assessed value, what it was and then what it would have been prior to Senate rolled act one. and the orange is what it what we're projecting post Senate build act one. So think of it as math calculation. You have your gross assessed
011value minus all of those deductions and that's what creates your net assessed value. So as you see um we have a little asterct in for 26 because we are seeing net assessed values or hearing net assessed values are going to be coming in higher for 26. They are um there's multiple things going on. um they are resetting the commercial and industrial um charts for um taxation. So uh the DLGF is resetting that. So that may have an impact on your district. Um but we are seeing slight increases more than the 2 to 4% that we projected in our in our slides here. So that's where we kind of make that little asterk. But if that happens in 2026 kind of just makes this is what we're we're assuming is going to happen. It's just going
012to make it have a little bump up and then you're going to see that net assessed value continue down because that's no matter what all of these deductions are are going to be phased in until 2031. And then as you see 2031 it starts to climb back up. That's because we have a new base floor and all the the deductions are set in place. And you'll see that the gross assessed value should have talked about this first. it continues to grow besides that one year in 2027 when that business personal property tax um piece comes out, but it's based on a market value um system. So, as our home values um are assessed and they grow, so does that gross assessed value. So, that's kind of what we are looking at um and projecting for
013your net assessed value going forward with these deductions. So, with that net assessed value being projected to drive down, what does that look like for your rates and your levies? And we'll go to the next slide for that. and we'll skip over that one. Um, that just tells you it's kind of everything that I'm going to say here. So, we are running two scenarios for every district just to say what could happen to your levy and your rate based on these assessed values going down. So, in the first scenario, we are keeping the 25 levy steady. And you'll see prior to Senate rolled act one, what would have happened to the tax rate if the um if the net assessed value was continuing to grow like we showed on that blue line prior. But the
014post Senate rolled act one, what what would happen to the rate if you were to try to generate those exact same levies um to the rate would have to increase to generate those levies exactly like you had in 2025. For the 2025 rate scenario, we've taken the 6108 and continued that out to 2035. And prior to Senate rolled back one, you would have seen your levies grow. Well, to get those exact same levies post Senate rolled back one, you'll see what the or sorry, what the rate has to climb to to get up to that levy that you would have seen prior. So, if you go to the next slide, those are kind of the numbers on the screen. That's what my eyes like to see, but I know others are visual with line graphs.
015So, as you can see, if we did the ratebased scenario, it's the teal line. And what would happen to your debt service rate if the um net assessed values were to were to decline like we're projecting. So, you can see the rate um the dashes are present ruled act one and the solid lines are post. So if you follow the rate scenario by 2031 could the debt service rate alone could be up over 93 cents and then the levy scenario could be up over 79. So calculation net assess values driving down tax rates need to drive up to generate the exact same levy or prior to what you would have received prior to Senate pullback. So this is just a visual. Um, like I said, in 2026, if we do see an assessed value bump
016up, we may see just a um a smaller curve to this, but we will see a curve to this to generate the same levies as 25 for potentially the rev the levies that you would have received prior to Senate roll back one based on what you um what to manage here. So, that's just a picture of the debt service rate. The next slide is what could potentially happen to the total total tax rate. So at A110 right now, um looks like 26 may be able to sustain at a$110 and generate the exact same levies based on the rate and the levy scenario, but overall you'll see that tax rate projected decline as those net assessed value values drag down. And again, this is a moving chart just depending on what those assessed values end up
017actually coming in. So that's one impact. So the next we'll talk about actual revenue. So they have decided to do away with lit and there's two pieces to lit. One is certified shares which is direct le revenue to the district and then the second is called a post tax um replacement credit. So that is applied to homeowners on their tax liability. Um so it just comes right off their bill. It's something they do not have to pay. Well they are getting rid of this. So if you scroll down one more you'll see that your district receives certified shares. So direct revenue from the county and then also they re your homeowners receive that um property tax relief credit just over 3.7 million. So the first one is cash not received to the district. The second
018is um um credits to the homeowners going away. So if you scroll to the next one, we'll take a look at what that does to your levy. So we talked about net assessed value um and now and rates and levies. Now, let's talk about your operations levy. Um, you'll see this line graph. So, you'll see in 26 is where that homestead credit begins. So, it essentially creates an additional circuit breaker. The business personal property tax comes out of the net assessed value. Um, and in 27 and then the lit certified shares and the PTRC impact begins in 2028. So that means direct certified shares, um direct certified revenue, a check being written to the district will no longer happen uh because LIT is going away. And then also because the PTRC is um being put
019into place, it may be pushing your homeowners over the 1% um tax liability, so then it would create an additional circuit breaker for the district. So, we'll take a look at the next slide at this um 10% or $300 max credit, which starts in 2026. What it essentially does is we're calling it a post um Senate roll back one circuit breaker. So, this is revenue that is just not going to be received. And you'll see in 20 actually the entire chart you'll see the blue line is operations and the orange is debt service. So, we've modeled that because that's how it is set in legislation right now. We feel that they are going to come back and protect the debt service fund because it is not currently um for the traditional circuit breakers. It is
020it does not impact the debt service fund. It impacts operations. Well, somebody forgot to do that in this legislation. So they they will most likely come back and protect it in 26. But for 26 you will have a circuit breaker loss to operations and debt service. If they protect it in 27 doesn't just go away. it will now then hit your operations fund. So this circuit breaker, it's just revenue not received to the district. That would have been planned revenue prior to these credits. You could see um just under 342,000 circuit breaker that would hit to the operations fund in 2027 and you'll see that it would continue to grow as the years go on. So that's that's the one hit to the operations fund. So if you go to the next slide, um this
021is just a model of if they protect that debt service fund. The dark red line is the the actual red line is similar to what we saw two slides ago. And then we put the dark red line in to show you what the impact to the operations level would be if they protect the debt service fund. So you'll see those circuit breakers are created driving down that revenue in 26, 27, and 28. And then it does start to climb, but like they're saying, it's less of more. But I think that's just less. So, um, we'll take a look next about I guess I'll pause right there. Any questions on those circuit breakers or impactful levies, debt service board operations? I know we're going really fast and it's a lot of information. It's a lot to
022digest. Okay. So, what does this look like to your taxpayer? So, we pulled one here um from Noble Township and the median AV is 173,000. So, if the homeowner hits their tax bill in 2026, um they will see a decrease. Um is it that full 10%, maybe not necessarily because their AV is probably going to continue to grow on their home and then they'll see that credit and you'll see it dip down a little bit. You'll see the two lines, the red and the teal. Those are we're following that levy based scenario or the ratebased scenario whether which one you followed what the impact would be on the homeowner. So you'll see that they they follow pretty closely to each other no matter what scenario you do. But you'll see the liability of the homeowner
023decrease in 26 due to that credit. You'll see it increase in 27 and then you'll see a bigger jump in 2028 due to that PTRC going away. So then it will um continue to climb because the market based system um values on their home will continue to climb. So, we just wanted to give a picture of is this massive um tax relief for homeowners? Maybe, maybe not. Just depends on what the view is. So, um that's just one impact. Um and then the next couple of slides are just a summary of what we've gone over and and if you want to read that to fall asleep tonight, go right ahead. We'll just skip right over those. And then the um two final slides here in the appendix are really just a summary of what we've
024talked about talking about the certified levies, the circuit breaker loss, and I've highlighted that in red because that is direct revenue that you will not be receiving. And then you'll see the net levies that that are projected to be received and then the percentage of circuit breaker loss and then what will potentially happen to the tax rates due to those net assessed values driving down. And then the um I like the bar chart because you will see um you know you you do see kind of similar revenues um going across the board there, but we all know that utilities are not going to stay still. We know that our staff want to be paid and get raises. We know that everything goes up. There's inflation on everything. Um but really the impact to your revenue
025kind of stays flatline. Um and it's really due to those circuit breakers being created um no matter what scenario you run a levy or a rate base. But um just to sum it up, you may see a little bit of increase in 26 due to the net assess value coming in higher. Um but all in all, we will see a dry down in that assess value as the deductions are taking place. Questions? Well, it is a lot. And I know I think I've heard somebody say, "I need to hear something six times before it really sinks in." And trust me, I had to do the same thing. So, um, I think I forgot to mention that I was the CFO of Warsaw for eight years and I was actually with Warsaw in their business department
026for a total of 11 before I came to Policy Analytics. So, sitting in in your shoes, in Travis and Chris's shoes, this is a lot of information to digest and it's going to take a little bit to come up with a game plan of how to manage this and tackle it and um do what's best for students. So, we know that we're here at Policy Analytics. Um I'm actually staying in Warsaw. So, if you guys need anything, I'm right down the road. >> Well, obviously, excuse me. Part of the answer to that I think as a board we're after is how do we plan for the future as far as what we're trying to do with our school improvement our buildings and all that >> because as we launch into what we anticipate hopefully to
027do in the southern part of the district this is not necessarily good news. >> Yeah. Um I would say that I'm gonna want to tag you in here too. because he's on the debt side. It's not good news because it is making an impact, but we do have potential capacity for those projects. >> Well, they they legislate 70 cents or you go to referendum and then they do all this. >> Yeah. >> It's like, well, we just change everything. I know I'm being cynical, of course, but >> they did. They did. >> Yeah. >> Because we were cruising all I shouldn't say cruising. That's a bad word. that there was >> we could anticipate, we could plan the right direction. >> Yes. >> And we felt where we at with the dollar 10, you know,
028is now we're going to be playing with rates. >> Yep. >> Yeah. And and what does that look like? Messaging levies. >> Yes. >> Versus rates and getting everyone to understand that rates really doesn't. >> Yeah. 74. [Music] >> Well, we can look at a couple things here. I guess the first impact obviously when I look at this, this slide hits home most for me uh from an operational standpoint. We we know that we're going to see losses in revenue in our operations fund just out out anyway regardless of debt service, regardless of borrowing. We we understand that there will be a a pretty significant impact uh to the revenue uh that we would receive from property tax dollars due to these impacts. And so, you know, right there, just off of this diagram, you
029know, you're looking right now, we're around the $5.1 million, but when you get down to 2028, I mean, we're going down. That's $600,000 right there that we would not generate in our operation budget. And so, that that is obviously an impact with that. Then you play the card with the debt service and how we plan for the future uh related to that. And we probably have some options. I don't know, Luke, if you want to share a little bit about what some of those possibilities may look like. >> Yeah. Um well, I guess to to back up a little bit to to your point, I mean, there there was a plan in place with the dollar10. We felt like we we had a gross assessed value growing at a at a conservative pace to do
030that and fund all the projects had a long-term plan built in to not just fund that but also fund the operations but obviously this changed everything and one of the biggest impacts of just going from that 80 to 70 cents. Um, we've talked about with a lot of schools and we talked about with your board back in I don't know was that June uh, May or June about do we switch to a levy strategy going forward and I think a lot of schools are going to have to do that eventually because to your your point earlier it's probably it's going up at some point as these deductions get in. When do you want to start going to to the levy based strategy? I mean I think that's going to be part of the question. So
031we saw W Bash County assessed value came out notice over 11% for 26. So that wasn't baked in because that just came out like a week ago. Um but you would have some options for 2026 if you wanted to maintain the rate for a$110. That would give you some additional capacity. Uh if you wanted to go that route eventually you're going to have to go to a levy strategy. And the hard part about that is even if we maintain that strategy, it's go you're going to go over the 70 cents at some point. So while we're maintaining the levy, we also have to keep that 70 cent threshold defined. And not just when we're talking about funding the projects on the south end of the uh district, but also there's a $500,000 loss in the
032operations fund. Is there anything that we can do on the debt service to offset that or where are those expenses and costs saving or cost reductions coming from? We talked about last time they all play a part into what your strategy is long term and that's I think what we're trying to figure out. But you do have an option this year that if you wanted to maintain the dollar 10 tax rate for one more year, you certainly could. and and that's something not that you can make the decision today but you have that option. So, and to do that, just so you're clear, make sure I don't say this incorrectly, but to do that, we would have to, we talked about, we know we have to make a borrowing for the south projects regardless. Um,
033and we talked a little bit about the timing of that. And so, uh, to do that strategy, we would need to borrow some of that by the end of this year for those projects in 2026, >> which would mean starting the process pretty early because you're going to have to go through those two hearings, wait your 30 days, have some additional docu or board meetings, sell bonds, and then close by December 31st. Arguably, we're already already in August, but so the time time is pretty quick. Um, so I mean, one thought was Are there some even just architect fees or anything that that you could uh pay that you could pay out of a small bond issue this year? Manage dollar10 rate get get you somewhere until potentially next fall when we have more data.
034We know did they do anything in the short session to make any additional changes that we need to be aware of and adjust the long the long long-term plan. Uh and then also potentially know the 27 net assessed value at that point. Is there a surprise again on the positive side or just gives us more ability to react? So I think from when we came out in May or June versus now I think there is some optimism because there there was the increase in the net assess value. So it does help. I mean, if you think back to that curve that that April was talking about, it really bumps it up that year and gives you some additional capacity and and gives you some breathing room against that 70 cents. Because right right now, I
035think you guys know this, your debt service rates at 61 cents. And so the benefit of that is is with the last project, we were paying a lot of those costs ourselves up front until we borrowed. We waited later to get a better borrowing rate, etc. Um, and we just covered those costs. Well, we are starting to acrude costs for these products on the south side already. And so, we could borrow some money now uh a small portion of that to start making those payments related to that. There's some legal legality though about because you know years back I was wanting to store safe you know and then in anticipation of what we had hoped to do a couple years ago. So, so there are rules related to how much you can maintain in your
036debt service balance or fund and you might be able to explain a little better than I can. >> Yeah, it's essentially 15% of your next year's payments is how much you can have it in your cash. Are you referring to that or uh sitting on bond proceeds? >> No, that. >> Okay. >> And so what will happen is Well, I'm getting kind of wording this as well. So what will happen then is because of our balance and because of the debt that we have because we'll have a uh because we'll have some debt starting to be paid off that we will be over that 15% and then the DLG will reduce our debt service allowance for this 2026 budget because of that. And so um that could impact our borrowing capacity in the future. So
037So your your statutory require or allowance on how much you keep in cash based on your current debt scheduled, which you guys only have two bond issues outstanding, it's dropping 25 to 26. So if you want to replace that crop in cash, you would do it with increasing the levy by a borrowing essentially. So if you wanted to to maintain the dollar10 tax rate, you would essentially need about an $800,000 payment in 26 to do that. That's not necessarily $800,000 borrowing. That can be more, but maybe stretched over stretched over a couple years. So essentially like you know for the south projects if we're borrowing 40 or $45 million planning to do that in 2026 we may borrow a couple million now so that we can cover those early costs anyway and also maintain that
038tax rate. >> And I would say that's a real common strategy that we see throughout the state where you borrow I mean you typically you don't need all 45 million or 40 million up front. there's it's kind of a slow process to to get going and bids you're not receiving bids until well after you even start the legal process but you're probably improving costs uh on architect fees maybe site equipment uh permits things like that u so a lot of times schools will do a small borrowing that that first year to kind of get them through potentially the fall of next year to take out some of those variables again what do they do in the short session what happens with 27 net assess value giving you more time to react at that point, but
039also so you're not using your cash to fund that. Uh the other benefit is if you're not using your cash, that also means that in your operations fund, it's earning 4% or whatever you're you're earning there, too. So, uh it's giving you some additional dollars that you can actually use on a day-to-day basis. >> I also say that would also >> give us we would know what our bids would be >> for the project coming in 2026 as well. So we have a better idea of how much of that amount we would actually need to borrow. >> But it doesn't answer the longterm dilemma longer term dilemma of five six years. >> Well, so so could you take a borrowing like the 20.6 you know, we got we know we want to do the south
040project, but anything when we're moving forward outside of this south project, the north project, you know, anything that's going to takes our take our tax rate up above that 70 cents, you know, is there any projects could you like if you needed to replace a boiler or something like that? or could you spend money on that now >> and reimburse yourself? Is that what you're saying? >> You certainly could do that. You could also include that in into a potential bond issue as well. And and one way to look at it too, and you see we've seen this a lot uh especially recently is let's say the Southwood project is $40 million. Some schools may authorize $60 million. only issue $40 million for the Southwood, but then in case you get over that that 70
041cent threshold, you have that remaining authorization or line of credit. And if a boiler, if you do need to replace a boiler, it's not, hey, we need to go to referendum and oh, by the way, that's every other year now in general elections only. You have that authorization, you can make that decision at that. >> I guess that's I guess that's my fear. Well, you know, we've been talking about that before. you have some a big breakdown or something that you know comes up and you have to wait two years to get that referendum and how the referendums usually go they fail. >> So then so then what do you do? So I I think a lot of uh school board and administrations that are thinking exactly along that line they're in your shoes around
04260 cents. We know likely that you're going to go above 70 cents. We don't know when that's going to be exactly because of that six-year phase in, but how do you protect yourself and is that authorizing more and just keeping that authorization back in case something happens? And and also, we know there's additional needs, too. So, I mean, are there some, you know, if you look 5, 10 years out in your plan, is a boiler likely to be replaced in five years? A roof likely going to need to be replaced or paving, windows, doors, all those things that we know that a school has to replace. That that doesn't get the community excited, but it also keeps everyone, you know, warm, cool, or dry. So th those are needs, and I think that would be
043one strategy would be to include that in the authorization. Again, just because you authorize it doesn't necessarily mean that you have to issue that amount. And if you authorize 60 versus issue 40, five years later, boiler breaks for 5 million, you come back and issue 5 million. So it's not like you have to issue all 60 by by a certain point as as as it is now. >> And correct me if I'm wrong. The the tax rate would only be affected by what is borrowed not authorized. >> Correct. >> Yes. >> The 60 authorization doesn't affect tax rate. until that time. So in Luke's example, it would be that so kind of back to one of those graphs when we hit 2031, it's kind of the worst of the years and then it kind of
044starts coming back down. We can manage the idea would be we would manage that even perhaps get back to a situation where we're budgeting back to rate >> and that's that's kind of what we're seeing a lot of districts are having discussions about right now because if you're kind of looking at this chart right here so let's just say so we know that 26 is coming in a NAB is coming in a little higher so you capture that higher levy so you know in this scenario it goes from 62 2 to 6.5 but that's at that's at that same rate 618 but then in 27th they see a lease come down a little bit to capture that 6.5 again and then beyond. So switching from the rate scenario this year to the levy scenario going
045forward and maintaining maybe that 6.5 rate instead of 6.2 two capturing that this year because you're going to have to grow then switching to that levy um scenario management scenario. Um that's what we're having a lot of districts um talk about right now because if we're seeing that growth, can we capture it right now? Do we have the ability to capture it right now? Do we have the capacity to capture it right now? And then sustain that going forward. So that's just kind of something to think about like you need like do rate manage this year and then levy next year at that higher levy we're able to capture. And then maybe that because you see the levy scenario has a a slower um increase in the um rate going in those projections than the
046prior to um levy scenario below >> and I think we will also have a better handle on too once. >> Yes. So in and actually um so you guys have been the first one that was released. So we just waiting. We received the parcel level data. It's at our tech team and you guys will actually be the first ones. Um you're kind of the first ones that we will see and share out to be like look this is the data we're seeing. This is where we're seeing the growth. Is it due to those um DLGF chart resets or is it residential or commercial? What's it looking like? And then we'll have this to you um probably in the next couple weeks once once the tech team has built it. And that will also kind of
047be good timing for your planning for what you want to do is insurance wise. So all that good news is 12% almost >> the rest >> not so much good news >> as simple as you'd like to know how much money you could expend on building improvements in the south without squeezing yourself into a box you can't >> the other side of this is this is if everything stays the same >> I was just going to This is what we know now >> and we don't know what legislation's going to happen this spring or next spring. >> I can't imagine I mean we're financially decent and I I can't imagine that some school districts that are kind of on the fringe of struggling. I mean how how are they going to be able to get
048through this? >> The our word our word is coming out a lot. I mean, it's just one of those things that I do not know how, >> you know, unless something changes in legislation, >> you know, I I I don't know what percentage that is, but there's there's got to be, you know, districts that are just scratching their head. >> operations, there's no way that you're going to be able to to make it work, especially if you're already maxed out. We're going to see a lot of operating preference on November 26. a lot of operating in and communities that probably would were no referendum schools or communities six months ago. >> If it's not 26, they're trying to make it to 28. And we're going to see a lot. I mean, I think typically we've
049probably seen what, four or five. >> Yeah. >> Per election cycle. Now, some of that's being consolidated into one, but it wouldn't shock me if we're over 25 schools in November 26th that there. We're actually working um with clients and saying if you're even thinking about a referendum, start now because um the capac the capacity to handle all the referendums is just not there. Like to do 25, I mean, going from five to six to 25 is just going to be crazy. And all of that communication and and having a a consultant to help you through they there's only so many in the state. Um and then then if you have, you know, there's those that have referendums expiring in 27, do you go early or do you stretch yourself in 28? So that is
050another factor. So there's just like there's so many kind of perfect storms and it's it's it's going to be a busy >> surely intelligent people were behind developing so they knew the end cause would be increased referendums right so is that part of what they hope to >> they want it to be a public recognize that hey we're we're you guys are raising the rates instead of it's is being raised, you know, they have to vote for it. But I mean, again, to help the school districts go, it has to has to go >> or they all fail. >> Can we add a layer to that? They can say at the state level that they reduce taxes, >> correct? >> Right. But but essentially, it's not going to change. >> No, but it'll be somebody
051else's >> school. Well, I think >> yeah, that's too April point on the one slide where it shows the rate for the homeowner property owner actually increases 27 28 so you know that's going to get some attention I think so >> especially when there's another election >> elections are next year But I mean it's good but it's bad >> and I'm saying it's statewide >> I see this it's only a oneyear decrease >> to the taxpayers. So that would lead you to believe that they would make other changes, >> which was my point was >> this is what we're talking about today isn't going to last until 2031 rules that we have to to deal with. >> But yeah, we're we're operating. Yes, but we have to >> present day we have >> to make
052decisions based on what we know which I think and again correct me if I'm wrong I think when there are probably some schools when was the 80 cent thing when did that come around that they took the opportunity and made the decision at that time before that happened to borrow as much as they before that >> before that >> and now >> now they're turns out to be a bad decision but at the time it was it probably >> so so a lot of school >> a lot of schools when 80 cents came in they did the same thing they authorized and and some schools didn't even use that that authorization to this day but a lot of them authorized again just to protect themselves up at 80 cents now they saw the AV growth
053the next couple years and a lot of them were able to get under the 80 cents. At that point, you're working against not just going from 80 to 70, but also negating that net assessed value growth over time. >> I hate to say this out loud, but it just it looks to me like somebody in the state house really wants consolidation >> because you can't take that are really really struggling and do something like this to school corporations that are somewhat efficient operational without thinking that okay we just take these little little guys and merge them in with somebody who is operational >> but the problem is it sounds like I mean I I don't know you're saying ones that have never been in the referendum category it looks like everyone's going to be pushed
054into that >> one going to happen I mean it's referendum that failed those consolidation next and I don't think it's any secret that that it's on the table as they uh one of the amendments to Senator Rol act one that was any county that has less than is it 50,000 population would be one school corporation so I mean that's going to take vast majority of Indiana so it's certainly on the table at least in the minds of some legislators and whether it's referendums or consolidation eventually I mean it's >> well that's why I make that statement it looks Somebody's kind of forcing this to happen. It's not a It doesn't really go by the population. They're forcing it just by Yeah. >> dollars coming in. >> I mean, I'm not a smart guy, but I
055can figure >> Yeah, absolutely. >> Well, we appreciate the information. Um, obviously this is um for your thoughts. Um, you know, we still have some meetings to to see where we're at with with the South Loop project. Uh, but we we will have to make a decision probably pretty soon as far as how we want to move forward going into 2026 at least. So, >> so I was hopeful we could use policy and information to come up with >> a target number that's spendable, >> I guess. >> Get their information on here in a few weeks. >> Yeah. So, when we get that information, we'll share it with um these guys here and then Luke will kind of take it from there and work on his side and say, "Okay, here's what your capacity is."
056As far as if we decid to do a borrowing this year, I think we have one in December, one in November, two in October. >> One in October. >> We can have a second one. >> We can have >> because it doesn't fall for fall break. So it wouldn't if we need to have a second one. [Music] >> That's where the timing does get pretty tight. So, I mean, you're talking two board meetings, uh, another two September board meetings, maybe October, maybe November, final one, and then sell and close to close by December 31st. So if we wanted to do something this year, it would have to be pretty quick. >> And we could hold that money. So I'm clear on this. We could hold that money somewhat without actually advancing it for expenditures that
057might not have been incurred yet like prepaying architects kind of. >> Yeah. The hearing just authorizes what we're allowed to approve. >> Just authorizing the max. >> Yes, >> that's all that's all that you're doing. And then >> once you got through that, then you would you would specify how much of that max authorization that you want to borrow this year. And that's where we would look to to Travis and Dr. to say how many how much do you actually need for the architect fees for for all those type types of things that come up to get you to the point where you're then we have bids in hand we have all those variables out of the way next fall and so likely again it's usually a couple million dollars or something like that >>
058just for comparison I mean when we did the when we started the northfield projects uh I mean we absorbed or made those uh payments early or not I shouldn't say early but before we the bond. It was about $1.7 million that we ended up having to reimburse ourselves back. What the actual expenses are and that amount may be predicated to by If we decide that we want the rate to be 10 or 26 >> again >> there be a minimum number there. Yeah. >> That may determine the amount as much or more than how much Any final questions? >> Enough for us to sleep on. >> Well, we appreciate your guys' time. Thank you. Thanks for >> guess we'll end this when they get ready for the board. >> Yep. Seven minutes. If I need
059a break, [Music]