001Call the meeting to order at 5:00 p.m. Can you take the role? Scott Visual here. Densky here. Nice Brewster here. Lei here. Here. Stanford pledge. I pledge allegiance to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all. So on the agenda, we have guests been here many times. Many times, many times quite used to this environment. And uh Mr. Purcell and is uh going to explain to us what our options. We we've been through this process before. It's been a few months. Correct. Um we're pretty much in the same place. Um but rates go up, they go down. Correct. Correct. Thank you. Thank you. And uh so yeah, we're going to talk about what we might be
002able to borrow. Of course, uh Gary's, I'm sure, talked with you, right, Gary, about borrowing off the PI levy and all that sort of thing. So, um the floor is yours. Thank you. It's good to see everyone as as always. Uh very nice weather today, unlike sometimes coming out here in the winter time. So, it was a quite a pleasant drive. So, I hope everyone's doing well and everyone had a nice Easter uh weekend the other weekend. What I've prepared for you is a summary of the potential financing in front of you. What I thought I could do is just go over briefly what's been going on in the market, which I'm certain a lot of you uh to which you are akin to as far as hearing it on the news. So, needless to
003say, the tariff situation as introduced by this current administration has thrown the markets into a bit of a a tizzy, if you will. um where in in certain respects what I think is happening is uh the markets themselves are waiting to see for a return to kind of out and say normaly but they want to see something struck in terms of a tariff deal specifically with China. Uh the last time I did see Gary was down just the other week at the OASBO conference and on that very day we spoke about the transaction and what's going on in the market. We are out with a $60 million coop issue just about which we are going to speak tonight certificate of participation uh lease appropriation uh transaction. Um and we had to pull that transaction that
004was the day after it was announced about the uh tariffs on China and the market went nuts. So that was on that Tuesday I believe Gary was that and uh we were out again this was with uh Margaretta schools out in um Sanduski a $60 million lease revenue certificate of participation. We had to pull that issue from that day for pricing. In essence the entire municipal market kind of shut down. Now, a lot of people would think, oh, the sky is falling. But really what that is is more so all those participants in that market saying, we need to take a step back and see how this is going to play out. And since then, I would say that there has been somewhat of a a retraction on that volatility. Rates have eased off a
005little bit. And frankly, we're kind of not far off where we were to last time uh that I had prepared these summaries for Gary. So to make a quick reference to the summaries in front of you, what we have done is given you a range from 10 to $15 million. And if it's going to be less or more, I can adjust these as needed. And we've also given you a range of repayments as low as 20 years and as high as 30, which is the max on a lease revenue transaction. And then within each of those blocks, you'll see a summary of a few things associated with the transaction. But I think the thing that you probably want to be most interested is the column all the way to the right, which would be the
006average annual debt service. in essence what the district would see as an annual payment on these bonds and it goes again as low as 10 million up to 15. And as you can see as we concentrate the transaction in the shortest of the maturities at 20 years that is going to escalate that debt service higher than as opposed to 25 or 30. So naturally at 25 or 30 there's going to be more interest involved um in terms of the transaction itself. But what we really want to make certain we focus on here is not I it's a delicate balance to be made between not paying too much interest but at the same time making the situation affordable. You don't want to strain the resources of the district so strongly that you're looking to incorporate some
007other funds. you just may not be able to afford it. What you must remember that each one of these scenarios has a five-year prepayment option. Meaning after 5 years, the district can decide to do with it what it wishes. Either refinance, which is primarily utilized for, or for that matter, if you wish to pay them off at that time after 5 years, you may do so either in part or in whole. So that aggressive prepayment option really assists with the flexibility the district will have while undertaking this transaction. So for instance what I would say is I think we've been battling around 13 to 15 million Gary is that correct? I mean it's it's been in discussions because we haven't really figured out the final scope. We were looking at a 12 classroom edition. Now
008we're looking at a eight classroom edition. We don't have a full estimate on the A classroom edition and what's the scope of renovations in the existing building which you know renovation could be varying scope from paint and touch up to new HBAC and roof and gut and everything. So it's okay that's all to be determined. So it's very good. So why don't we just work with the 15 million is probably the worst case scenario or the the highest. So at 30 years, you can see that the average repayment on that given today's uh interest rates is around $988,000. Whereas you were to repay that same amount back in 20 years, that that debt service would be $1.2 million. Now, mind you, the overall interest, which I did not include on this, and I can certainly
009uh provide that in the uh the numbers that fortify these summaries. The thing is is that you really at at $300,000 difference per year there, it just offers a certain level of affordability to the district more so than trying to compact it. At the same token, that 9.88 at 25 years, that $15 million, that average debt service is just under $1.1 million. Do you have the interest rate? Uh, what what assumption did you use? So I we just ran we so on that Margaretta issue we just priced that last week. So that those are the numbers I'm using. They would be identical. Their underlying grading is not quite as good as ours. However, that would be an insured transaction. That one went for 30 years. So I use those those rates. And that tick that
010true interest cost you can see is in the column between final maturity and call date. That's going to be your overall average interest rate on the issue. We don't you have a percentage. Those are percentages. I I should have put a percentage on there. Sorry. That's That's my bad. Those are percentages. That's not That's a period, not a column. Yeah. Yeah. So, uh uh right around give or take 5%. Thank you. You got it. the shorter you go. And that's the difference really that I'd like to bring to your attention between the 20-year and the 30-year. You are only talking about a difference of 17 basis points in overall interest rate. Now, I know that that's not zero, but given the way the curve is working, normally that 10-year difference between 20 and 30 would
011generate a much wider difference in terms of overall interest rate. But the the what we call the curve is flat. It's still slightly inverted, meaning short-term rates are paying out higher than some mid to long-term rates. 2 to 5 years is paying higher than probably right now just about 10 years. Then after about 10 years, the the curve normalizes, but it plateaus. So that's why I think in looking at the potential of the transaction, you'd want to focus on probably the longer repayment to make it a more affordable situation. you still have the same prepayment option, but you're really not incurring that much more significant interest. So, that is the one thing that I would tell you that to consider. In terms of the status of the transactions, we do have a version of the
012preliminary offering circular uh out from Tom Wilson, your bond council. Uh so, that is uh in the midst of being completed. I don't know uh how much attention you put into it. review it. It's It's pretty good shape at the moment, but just needs a a formal review. Okay. So, in essence, with that part having been done, the next part would be to work on the resolution from Tom Wilson uh at Dinsmore. Um we are essentially at the precipice of preparation to move forward on the transaction. we would go forward and have to present to the rating agencies uh to affirm the rating and then based upon uh decisions and movements of the board relative what you're going to do to the to your general fund and PI balances uh once that's been determined I
013can give you kind of a concept of what that might or might not do to your rating. In the meantime, what I will do from the rating standpoint this week is ask Moody's to give us what is called a scorecard rating. Basically, they're going to dump all your information as it currently stands because you are rated by Moody's at A3. They will put that into their matrix and that will give us what they believe the scorecard or what your rating is currently. Uh given the situation as it stands, I would venture to say that's going to come right back at a double A3. Uh but keep in mind that the cops trade one notch below your current underlying rating. So the cops certificate of participation would trade at A1 and that's why we would incorporate
014insurance. The insurance would not only pay for itself but would be of benefit to the overall debt service in the transaction. And we'll provide you that analysis when that time comes. in our fiscal year 2024 audit just came out last month. So they'll be able to have the most recent data. Beautiful. And I um I'll because um you know originally when I read it, it um we went from A1 in 2017 to AA3 rating. Yes. So that's what we're talking about. That's correct. And that's an upgrade. So that was an upgrade. Are there is there additional is there more than one um issue involved here? Is this just one big lump? This the these all would represent one issuance of whatever that par size. No, we're not breaking it out at all. No. Okay. And
015then when the prepayment is the prepayment all of it one time if if it's just one issue. So yeah, five years out. Five years out. And then at that given time, whatever you decide, you can actually call in some of it, all of it, whatever you'd like to do. Can you refinance it? Absolutely. After five, do you have to wait for 5 years? you have to wait for five years. You can refinance it prior to five years, but that would be on a taxable basis. Okay? Uh naturally, those rates are higher and unless we're into a very unique low interest rate environment, something similar to COVID, which who knows? Let's hope something like that doesn't happen again. Uh but that offer is always out there to refinance on a taxable basis in advance of that
016five-year call and technically it's a 5 and a halfyear call as it's a 121230 call but your first principal payment wouldn't be until 12125. So that's why we determined that as a five here. And the our next agenda item is to go through the permit improvement forecast. And in that forecast, I had used a previous rate sheet. And at that point, I had used $12 million over 25 years. Um so when we get to the next agenda item, I I projected about 125,000. I think it was slightly lower than that. And I just rounded it up because, you know, things are always in flux. And right now we're at 870,000. So things have maybe gotten a little worse for I would say from the last time I provided you numbers things are probably a little
017worse just because we are so close to what's happening with the tariffs and now upcoming year in early May we have significant economic data coming out uh being consumer index price CIP there's going to be we already had durable goods and new housing sales that was just last week when I was in New York we were pricing a transaction that had a pretty good effect on the market the market had a good day today, meaning interest rates started to come down. The 10-year is around 4.2%. So, at one point during the backup after the tariffs, the 10-year was pushing 5%. So, you can see we're already kind of scaling back from what was discussed. What it really takes is for the market to digest in and em and embibe and digest what just happened. How
018is it going to affect rates? How is it affecting the economy? So the new numbers that are going to come out will be a consumer index. There will be some new unemployment numbers. Uh so those will have an effect on what's going to happen. Right now a lot of it is going to hinge upon what chairman Powell has to say. The one thing that really messed things up after the big backup was when the administration came out and intimated that there's a possibility they would fire chairman Pal. that threw the markets on its head. Uh it's an emotional investing market now. It's something un within I've been doing this just under 30 years. I've never seen this. I've never seen this drastic movement from one side to another. It's like massive pendulum. But that is
019going to be the nature of this market going forward. So when do we have to pull a trigger on this? Right now, whenever you say green light, I would say as of right now, you say green light, we're probably 45 days from funding. Okay. So, you can pull you can say green light whenever, we've gotten a lot of leg work done already. Yeah. And being that this issue was meant to be for the Buckeye edition, until that design's finalized, pulling a trigger now may not make a lot of sense, but maybe it's two months from now. I'm not sure what Ryan's timeline is. Maybe learn more. Yeah, we're probably 3 months out before we're pulling the trigger. Okay. So then we don't want to get too far down the road with the updates on uh
020the PC because it looks like we'll be going over fiscal year. So, you'd probably want to focus on a lot of the financial numbers. Let those be uh we'll have to change those up over fiscal year. Um mind you as well though, you wanna you probably want to have something showing that and as long as you've priced the issue, that gives you the opportunity to say you've got money that you can sign the contracts. Otherwise, you'll have to encumber something internally. You probably want to avoid that. Right? So from the time that legally when can we sign the contracts? I know Gary, we had talked about this before. You don't have to have the money in hand, but it needs to be in process, right? The moment we price, right? And so uh you know,
021we're looking at the projected time frame right now breaking ground in October, but we'd be signing contracts before that. Correct. And so you know, you just throw a three-month time frame out there and see where we are. I think time is on your side. Uh I think well and we've seen I mean you're talking about consumer prices. They went down a little bit last time, right? The trend is down. Um and I mean you can get into a lot of economic data without a doubt. But when the government's not out pumping money into the economy, the rates are coming down. I think that's going to be the ultimate goal. And honestly, what I feel what the administration is trying to do here is kind of kickstart a soft recession. Yeah. The administration wants lower interest
022rates, therefore gives you easier access to capital, and that's going to stimulate growth. You can bring the dollar back later. Exactly. I mean, that's not hard to do. And, you know, there's obviously a lot of back and forth arguments in that regard as to the approach. Uh, but, uh, he essentially tore the band-aid off now and everyone said, "Ouch." And now it's kind of starting to go away. We'll see if there's anything else that could, you know, throw this market in. It's tizzy. It doesn't take much. It doesn't take much. I mean, you saw the big spike and it's coming down already. So, our timing might be good. Now, that being said, the other district, you said you copied that for the numbers. Their rating wasn't quite as good where they one level worse. So,
023it was an insured issue as yours would be. Their underlying rating was an A1. So if the transaction had gone out on its own, the underlying would have been an A2 on the transaction, whereas yours would have been A1. So you're a step above them. I kept those rates the same just cuz I've always layered conservatism. I understand. But what would that difference be? And you're probably talking three to five basis points up and down that scale. So it could take that tick from a a 508 uh on the high side. You you'd probably be pushing there overall probably closer to five. Okay. So, it would come down. That district did not did not have nearly as strong as a uh credit footprint as Riverside does. And on the low end, um like in the
02420-year range, what? Oh, so for instance, let's just say for the 20-y year, like those ticks at 491 now, it's going to be a little more impactful because now you're in that part of the curve where it's starting to curve. So, that would probably start going around closer to the 485, 480s. I would say 485 480 to 48 for now for now and the tick the definition of the tick there it acronym stands for true interest cost and you must uh understand that that incorporates everything along with that original issue premium okay and this will be the last thing I want to get into is we don't get too far into the weeds the yield that really the government determines that you cannot exceed in your investments of these proceeds the arbitrage yield probably on
025these issues at a 508 the arbitrage on this is going to be in the 480s mid480s. So I just want to show you the difference between the tick and the actual overall yield as prescribed by difference when you go get a home mortgage. Simple as that. An APR versus an APY. One of the things is maybe explain it a little more in English. So when we when we get these funds up front, when when you borrow the funds, you get that cash up front. So now we're not liquidating those funds because we're under a construction contract. We wait for things to get build. We can invest those funds. And if that 4.8% if we're getting higher than than that percentage on our investments, we actually have to pay that money back to the IRS. So
026you have to be careful we don't if you do exceed it, just more work to do. But it's if you can stay under that amount when you invest. It's also one of the reasons really you do want to consider leveraging what you have into a financing and I I know this may be a hot button topic but from a finance standpoint from an economic standpoint to expend cash at this level whereas you invest that cash versus what you're paying on this you can kind of make that interest almost a wash. So that's really where liquidity comes into play. I understand that there is a distaste in many people's mouths about paying interest on stuff. I can understand that paying cash for anything is always going to be the cheapest way. But in the world of
027finance, be it municipal finance or corporate finance, no major institution at this level of your budget uses its own money to pay for things this big. That's where you have your creditability and that's where you want to leverage your ability to borrow and then you add the flexibility of the prepayment option because then you are not you're not stuck with it for 20 25 or 30 years you have the need you fill it and in 5 years you can readress and and Gary had taken advantage of that refinance in the past right totally to save the district some money totally significant money we actually did the tax bill refinancing thing of our, you know, bonds from 2016. We did that in 2019. And then during CO, we were looking at it. We were close. We
028were close. We were very close. We get everything line up to pull the trigger and just was didn't quite And that's the other thing to consider. If there is a major run on rates, we may look at an economy of scale and incorporate because there are callable maturities out there. And if they start to make sense when you layer a refinancing in with new money, now you have your third party costs are set over two different issues. So you get a benefit to that cuz that's really what drags down the savings on the refinancing or the costs. But now if you can apply the cost over a new money portion and a refinancing, that economy of scale definitely benefits the refinancing. and we are keeping our eyes on that. How does this affect our borrowing
029capability? If we decide to finance something else with a possibility, this will have no effect as it is a series of annually appropriated lease payments. It does not go against your direct debt limit. Okay. And there is a premium to be paid for cops versus what to what you're referring Blinda being the the go. These are more expensive than geos because of that appropriation risk. By legal definition, you can enter into this loan and in two years decide to walk away from it. But then you would get into a very ugly situation with ground lease and you would have a trustee that would bring in the participant hold the certificate holders which are the participants in the transaction and then then they would have a lean on your assets being the buildings that you are
030going to which they don't want. You don't want that. No, they they don't want that. They don't want them. They they really don't want it. So didn't you say Twinsburg did that? Twinsburg. Twinsburg Township, okay? And it made national news many, many years ago. And they will never ever be able to access the capital markets again. Probably not in the rest of my career. They were deemed uh un what we call garbage rating. Their rating fell off the the face of the earth. So, they're untouchable. And what's our cost for this other than the interest rate? I I did not put the overall interest rate amount in here and I do apologize for that. No, no, no. Like what's our cost to facilitate the So, all in all, you're probably talking about between 150 $175,000
031and that will be financed into the issue. So, it's not as if we give you the money then Gary has to cut a check out of the general fund. That gets layered into the issue as all borrowings do. this um original in issuance premium. Okay. That that's our cost to it to play. No, no. That what that is is essentially the extra premium generated by the transaction that is not cannot go into your construction fund in Ohio by Ohio Revised Code. I won't try to get this too complex, but basically all these bonds are going to be sold at a premium, meaning the coupon is going to be much higher than the yield. So, as an investor, if Gary comes to me and says, I have $13 million, and it was just one singular investment,
032I told Gary, I'm going to pay you a 5 and a half, you're going to pay me a 5.5% coupon, but my return on my yield on that's only going to be $450. meaning I am paying more than par for your $13 million. I'm gonna give Gary $14 million, but in the end, he's only going to have to pay me back $13 million. That difference of a million dollar is where your expenses come from. They're paid out of that. And then what's left over cannot reduce your borrowing and go into construction. And that's exactly what that column is. That's your excess original issue premium that will go into the issue and it will be from that bucket of money that you will pay your initial debt service until it is retired and then it will
033come out of your general fund. So in this case the uh for instance on a 20-year maturity because it's shorter you would have $800,000 put into your what we're going to call certificate retirement fund. your uh red at $567,000 the original issue premium and then this is what's left over after expenses uh the deposit to the certificate retirement fund and then that money will be utilized at first to pay your debt service. Once it's exhausted, you come back to your own internal revenue sources. So, Gary, when you look at borrowing money, let's just say you borrow 123 million. Let's say it's 12. We've been talking about 12 before. So, let's just say it's 12. and uh you sign the contract and uh at that point in time you're getting 3 and a half% let's just
034say um that money of course gets earned and mitigates the payback cost. Um did you run numbers on the previous bonds as to how much interest we are able to gain to mitigate our costs? I don't off the top of my head I remember well back when we did the original bonds so the when we issued those bonds it went into the what's called the ' 04 building fund and we were posting the interest to that fund that was helping us offset change orders and overages that we had and we earned for that issue it was over a million dollars in interest over that time interest rates were lower back then um was also a bigger issue so you know what it would be like on this one would be totally different you were getting
035like 1% weren't you we were getting like one one and a half Yeah. And what's star at now, Gary? Star is at four like 4.4 right now. So it's So I was kind of figuring if we figure a 3.5 rate, we should be relatively safe, right? You know, on on how much interest we would earn. Of course, that just mitigates the payment cost. And uh if we're coming in a little bit higher because of timing, then we might net out about what Gary is saying. And you know, all that goes into what what you're planning on doing. So that that's the key. That's the key. Now the relative to the those bonds that we had sold were well higher than what you were earning on the reinvestment. Now that gap is significantly reduced. So it
036just makes sometimes you you you'd like to pay for it in cash, but in this particular circumstance, Mr. Official, as you just indicated, you could really offset a good amount of that uh with your liquidity situation. Now Gary, um, and maybe you remember too, what what was the bond rate uh, six, seven years ago? Seven years ago, I think our tick was three and a half. It was low. Yeah, it was three between three, three and a half. And then you were getting one one plus at best. Yeah. So you had almost a two and a half negative, right? Yeah. Right. And so in this case, it won't be as bad. Not as bad. If you're talking, let's just for instance on this particular situation, 490 and a 20-year versus the 440, you're talking about
0374050 basis points. A 508, you're talking uh 60 basis points versus what was 200 250 basis point spread, right? And if you go in the market today, you're 44, you're not far, but right, you're not far off, right? So that definitely helps the the situation in general again. And and that's why you kind of want to leverage the your borrowing uh ability in this interest rate environment. Some would argue, well, when it's this high of an interest rate, why would you pay that interest rate? Well, that's that's you're benefiting from maintaining that liquidity. It's relative. It's all relative. It's six or half dozen. There's as many arguments can be said on one side as the other. That is absolutely true. But we uh do stand prepared to move on this. Uh we've gotten a Gary
038works a lot faster than most treasures. So I knew once that PO came out, the preliminary offering circular, it's got holes in it. It wouldn't take long for Gary to fill that up. So I knew that wouldn't uh be much. Uh we were able to see your bond council Tom Wilson down at OASBO, which was a very productive conference. We were able to connect with everyone there. So, uh, Tom's aware of what the situation is and he stands prepared. So, we're we're right there. And Gary, you said shoot. You could have everything ready in two weeks, right? Yeah. Yeah. Take a little bit of time just cuz the legal work that goes on. We don't want to say a week. Understood. It's pretty much ready now. So, it's pretty much just reviewing it and if
039any numbers need updated in the next fiscal year, you you may and keep me posted as to what the status is on the you want to time and so you pay obviously you don't borrow until you need it. And if that is the case, you wait. But if you see a definitive timeline, you're going to save some legal costs by trying to maybe get this done, if anything, priced before June 30th, if that could happen. But it doesn't sound like that's going to be the case. Well, we wouldn't be ready to take the money then. Okay. We really wouldn't even be close. Okay, very good. I just want to put that out there if in the event that does come through. I mean, we might we might be in September. Just to confirm the call
040date is anytime after that we can refinance. Yeah, that's it. Got to wait five years. Prior to 2017, you'd have one crack at that apple prior to that call date tax exempt, but that rule changed and I don't foresee that coming back anytime soon. We did we did that with our first issue like the the early issues, didn't we? Mhm. because that was an aggressive call and having done so in with rates bottoming out the way they did. The economics of that situation presented itself whereas a lot of folks who had issued right around the same time had done seven or 10year calls. If we went to seven on this I think that would affect it slightly but back then anyone who was at a seven versus a five was not there. Yeah. We were
041we did fives that absolutely I still think that was really cool to watch him sell. Yeah. So, as we were in New York just last week, uh I was telling uh Miss Brewster, we were out with E-Hovve. We did $60 million transaction and uh we priced it and uh the market was somewhat finicky, but same situation. We had the the big screen on where you could see orders coming in fulfilling each of the maturities. Uh, and it's a little bit nail-biting at first because, you know, if the orders don't come in, that means adjustments have to be made for interest rates up to attract buyers. But boom, they came in and in essence, we were able to move downward in interest rate because there are so many buyers. There is a demand out there for
042this paper because investors are looking for that spread. So again, I layer conservatism into my numbers. I don't want to present anything to you that I think is not attainable but naturally the moment I run these numbers they are obsolate. I mean it's possible. No one knows. Okay. But it's possible in 3 4 months we could be par. Oh very possible that uh yeah there could be a big run on rates and that's what some are hoping to to have certainly I am for borrowing case but you know on your investment side that starts to reduce but it's not going to be dramatic. They will slowly work each other out. So why would we use any of our cash right now? Why wouldn't we just roll it all into borrowing it? I mean, we've got
043another, you know, like another $5 million sitting out there. Like, I have always been a proponent of preserving cash. I I have always in an institute like institution like this at Riverside where you have this strong leverage to borrow to me, but it sounds self-serving. At least I'm not an underwriter. Underwriters will always tell you borrow, borrow, borrow because they get paid on size. I do not. Uh but I have always felt maintaining liquidity is king. I've always felt to maintain your debt rating is important. There is a balance to be made. Um and then there's always the political ramifications to which I'm generally not terribly privy, but sometimes voters like to see skin in the game. But in essence, a cop's issue in my opinion is a general fund borrowing. It's skin in the
044game. It shows up for Yeah. It shows a dedication. We're doing this on our own. In essence, with money that's coming in from the taxpayer, but it's not extra money you're asking for. So again, I don't know why we wouldn't either try to do additional projects or preserve cash because we still have bus maintenance facility that we've been looking at and we have a maintenance facility that we tried to do and wrap all those we tried to wrap all that in when we did our last bond levy that failed. Why wouldn't we use some of that cash to do those projects instead and borrow instead of 12, borrow 17? I mean, it's not going to increase that much. Yeah. I mean in essence, so you could kind of take a ratio for instance. So for
045every 10 million at 30 years is uh $660,000. So if you were to take five more million out of this and let's just put for instance 20 million cop at 30, you're adding another probably so five of that. So you're adding another 325 350 grand to your overall debt service which get it up to around 1.1 and you have the five-year option for prepay and to decide at 5 years hey we've had windfall we're in a good cash position. we can pay it down or hey you know what things are tight let's just keep this as is and at that time you can at any given time after five years you can make a determination to do what you want and if you pay it down they readjust the payments absolutely yeah so uh yeah
046cuz that would be in essence what we call a defeasence so once they take that away you call in those bonds that gets do they change the term at that point like do you go out another 20 years, you're going you're going out for the remainder of the bond. So, for instance, let's say in 10 years you decide to refinance this, you could not refinance it for 30 years. You'd have to refinance it for 20 years if you were to. And the advantage then is you pay it off earlier, it goes away. That's it. You could take years off, but you can't add years on, right? And so when you have a a relative amount of money coming in and money going out, the the closer you squeeze that, right, the worse you look. That's
047it. Yeah. No, that's absolutely correct. Yeah. If uh you're starting to really basically, let's just call living paycheck to paycheck to pay that debt service off, the rating agencies are going to definitely dig you for that. Right. Let me ask something. 30% or 40% whatever that cash it's only the general fund right so having having capital left in our PI fund to possibly do some of those other large projects that we have and not have to issue a second something down the road would if we did it with the two projects would both those projects be lease payment throughout the entire life of the the cop S. In other words, if you put two different buildings, but yet we paid the $5 million off for one, can we It's all one. We can't deliver. Would
048we have would we have to have the GMP for both all the projects all at the same time? Right. You wouldn't you wouldn't be able to say and I think like five months from now we're going to have this project. So, it might it's probably going to cost you'd have to do it all in Right. So, if we were to have issued and then you have a need down the road, you couldn't just layer that in. You would have to go through the entire process. Or we have to do it twice. Twice. Right. Or if you wanted to if you were to incorporate two different projects into the similar structure, but you wanted to make certain one of them possibly was paid shorter and that once it was done, you could get rid of it.
049We could do multiple series under one umbrella, which is an economy of scale because you're in essence paying for one transaction, but you're structuring in a manner. for instance, one's going to go 30, but you have another project that may not be as big and you can pay that off in five or 10. We would show that. That way, boom, once that lease is done on that particular series, no one has access, no one's got leverage or a lean on that asset anymore. So, whereas if you were to have done it and let's say one of them really only needed 10ear repayment, but it was all under the single series, that one piece would have to wait until the 30-year piece went away. So, if we pay cash now, can we roll the first project
050into this when we do the second one or are we all have to do it now? Like, we would have I'm sorry, I didn't follow that. Say for because if we have $5 million in cash and we want to pay for the first one in cash, but we really want to borrow, but I don't want to borrow now because I want to borrow when I do the second one. Right. So, you know what I'm saying? Sure. So, a matter of timing. If this one was to have come first and then you wanted 5 million for the second one, you'd have to go through the process again. Okay. So, Mike, um, the I don't know if that answered my question. Okay. I'm sorry. Maybe I didn't understand it properly. I'm sorry, Belinda. I want to I
051want to pay the 5 million now for the first project that we're doing, but I really want to borrow the money. She wants to cash million, but I want to cash out. I do. I want to get I want to get that back through a bond through through one of these investments. Oh. what I'm saying, but I want to do it and I want to ramp it up into one. I see what you're saying. So, in depending on the timing, you can do what's called a declaration of intent and that generally will have a 90-day look back. So, if you within 90 days were to have incorporated or encumbered a certain amount of funds, you paid for it in cash, but now you want to get compensated, you want to basically reup and get that
052liquidity back. Yes, then you could borrow, but you'd have to declare an intent early. Okay, that way you catalog everything you spent, present that to your council, and council would say, "Okay, you can reimburse yourself for all these things. You'd go out and borrow." You take that money, plop it right back into your general fund or PI from whence the original funds. Okay. Yep. Gotcha. I'm sorry, Miss Bruce. I I interrupted you. No, no, I I didn't know if you were done or not. Um, so obviously we're talking about um, you know, one project is the Buckeye edition, but then Buckeye and Melidge both have some renovations, so that would all be grouped into one. Correct. Correct. And then the way the the getting into the weeds a little bit, we essentially So here's one
053project and then the other improvements are here on this project. You cannot cross collateralize. Meaning, I'm going to put all my money and only put this particular asset under the ground lease where I'm putting money over here. The investors are going to tell you if you're investing in both these assets, they have access to them in the lean throughout the ground lease, but you can put them under one umbrella for sure. And we'll make certain that I've already talked to Tom about this at OASBO and we talked to you briefly about it. Just making certain that that the the ground underneath these improvements as they are going to be under a ground lease lean that there's nothing you're going to be doing taking away property from those because then certificate holders will not like that.
054nor would the insurer because at that point you're diluting the the ratio of value to borrowing. Uh they don't necessarily look at you said it before Mr. Official they don't want to come in one they cannot liquidate your asset. They cannot come in and take your asset away from you and sell it to get them what they needed. They can only occupy that asset during the term of the ground lease. The ground lease will run 5 years longer than your ultimate maturity. you're not paying during those years, but that's done to discourage entities from saying, "I only got two years left on my loan. Hell with it. I'm going to nonappropriate and walk away. Big deal. It's done. But now you'll have seven years under which certificate holders would be able to come in and
055occupy your asset and turn it into a revenue generating entity to pay themselves back." That is their method. They are essentially telling you, don't mess with us because we'll take away your school and you're going to be down the proverbial creek without a paddle. So, it's quite complex the legality behind it, especially as you start to examine the ground lease and the lean situation with certificate holders. But this is very common, very unique. Have we done it cops here? I don't believe we have. So is in essence all your assets right now are unfettered. So that from a clean slate perspective certainly lends to efficiency. Thank you. Certainly. I am sorry if I've been a little long-winded tonight. It's a complex topic and obviously I'm somewhat passionate about there's a lot of facets. It's there's
056a lot of different especially with the cops especially with the certificate of participation. So, any other questions you may have, by all means, after tonight, please feel free to email me. Gary has all my contact information. He'll give you my cell number. Feel free to email or call at any time you wish. I'll get back to you pronto. Uh certainly wanted to prepare this for your summary and for your review. But uh we are uh there. So, uh green light, pull the trigger. We are ready to go. just a little bit more background work to do as far as the credit ratings concerned and then finalizing the the disclosure statement. Is that just phone calls and and sending movies stuff in this particular circumstance depending upon the ultimate decision of the board and what to
057do with current funds. Um there may be a there's never a need to go in person but what we want to do is try our best to preserve that double A3 and if I feel there may be a jeopardy in that I would like to do it face to face that is an an expense to the issue and it is not required and we can do that via TV and cameras. I would rather not just do it on a call though. Yeah. If it was more rudimentary, they understood not big impact, no big deal. But this one will carry with it a little bit of grogs and given that you are a double A credit now, you are under a little bit more scrutiny uh from the credit rating microscope. Double A's automatically, not that
058single A's are any, you know, they don't get as much attention, but when you're given a premier rating like a double A, they make certain you do what it takes to preserve it. Thank you. Excellent. Thank you so much. Wonderful seeing everyone. Gary, always a pleasure. Ward, Chris, thank you so much. Again, any questions, feel free to reach out at any time. And Gary, if uh you need anything after tonight, if you'd like to see the supporting numbers for all these, I'll gladly provide those to you. I have them. I just do them in the days with a lot of things are constantly changing to get through all night changing. Understood. So, understood. All right. Thank you. Have a good evening, everyone. Thank you so much. Thank you. Good to see you. You, too. Enjoy
059the rest of your evening. Thank you. Bye-bye now. Take care. Take care. Good to see you, bud. Go Cats. There you go. So, PI forecast, another hand out for everyone. Does it just not work? What's that? I know. All right. Um, so wanted to kind of go through a uh quick review of the permit improvement fund. Uh, did you recall previously we did uh, you know, we do a 5-year forecast. Um in discussions with the finance committee, we decided to go out 10 years at one point adding in some inflationary numbers. So this forecast that is handed out is the same forecast that was passed out at the uh finance committee meeting. So nothing has changed from that meeting, but since the remainder of the board has seen it, uh the items that are highlighted
060in yellow are some changes. We do we did get our u our property tax settlements in. So the permit improvement fund you see at the top there at the yellow line the current fiscal year our total collection was 2,943,000 which came in higher than anticipated even came in higher than what the county auditor estimated under schedule A if you count for a 99% collection rate. Um so I back that number down in the future years um just to be conservative. Also on the first page added uh an estimate for repairs and that was based on uh the last two fiscal years. I didn't break it out by building total just because they can vary wildly from year to year. Um so we are adding around 225,000 or so per year in repairs to the forecast
061inflating by 3%. Um, going to page two, I remove the bus purchase from FY26, please. I'm sorry. You said the interest rate was what? The interest inflation rate? Oh, I had 3%. Three. Okay. Yeah. So, I did what I did was there's a little note at the top here, but I did a 3% inflation for expenditures, about a 1% inflation for uh for revenue. Oh, I see. Okay, right here. It's pretty small. It is. There's a lot of numbers on these pages, too. So, it's lot to digest. Going on the second page, looking at the expenditures, I removed the the bus purchase uh from FY26 as the board approved previous meeting. And then um in FY25 added Chromebooks and the generator that were approved at the meeting last week. and also about 20,000 for the
062math curriculum purchase that was approved previously. That's about the portion that's attributable to the PI fund and the rest will be on the general fund. And then FY26 reduced the high quality instructional materials. If you recall, we've already purchased grade six um and that cost was about 250,000 which grades was it 3 through six or four through six? I think which one is, but um so we're figuring about half the cost for the two grade levels, seven and eight. So I reduced that from 250,000 down to 125. And you're figuring that'll all be books and five year. Yeah. Yeah. And that could change too. We don't you they haven't selected what curriculum that looks like, right? So right now it's just a placeholder. And then the turf replacement I reduced from 800,000 down to 600,000.
063So we had an estimate from Vasco from the fall that was around $600 some thousand was the estimate and you factor in a couple years of inflation and then we have the cell phone tower revenues um in there. That previous projection we had $800,000 was was was too high of a cost. So I backed that down um make sure we accounted for the cell tower revenue and then also if we do get another sponsorship that will obviously cause that to go lower. Yeah. Do we have 200,000 set aside for that also? It'll be close to that by the time we get to by the time we get there um under that but with some interest and whatever. Right. Um so I mean that number in in today's picture could be 400 not 400 but 170
064180 in the 200 that's set aside. It it would have been the 200 is a different fund so it's not really reflected here. Right. That's what I mean. So if you reflected it, it would really be around 420. Uh well, we figures that number is going to grow because of inflation over the next couple years. by 200,000. I mean, it's it's I'm not sure. I mean, that's Okay. So, you're saying it could grow 200,000 in the next three years? It could be. I mean, it's okay. You never know. And I don't I didn't put the exact number from the cost estimate you got. That was just a very rough budget number. There's different types of turf, but right now if you zero it out, we have uh roughly 170 180,000 in the uh O3 account.
065Yeah. Permanent improvement. That's really was dedicated for this. Correct. So really, if you took a snapshot today, we're at 400 some thousand in that number. If you added that O3 account number in, which is not reflected here, or are you estimating this to be 800? It's technically 800 and we've already you've already consideration. That was my projection like around $800,000 cost and taking 200 off to get to 600. That was what my projection was. So the you have a projection of 800 that's not shown here. It's 800. Yeah. And I backed off 200 for the cell tower to get to the 600,000 number. So we are using cell tower money for this. Yeah, that was my intention was the 600,000 was net of that already taken out. Okay. And then what about the 003 account?
066That's that was what I was using. The 003 account is split into two different funds. One's a cell tower, one's the purchase or one's a sale of land. That's was being reflected differently. Okay. And then the the so then the other moving part would be is if there's someone that wants to uh or Yeah, we if we were to get a sponsorship, we don't have that contract in hand. So that would be different. and and as of right now there's not been any discussions we're still in contract with uh okay I mean has there been any discussions looking forward about moving forward or any of that okay but I think we still have two years out on this one and then I added just just because the last the previous versions didn't actually add up
067all the total expenditures and projects so that added a line for that and then showed the current year the line is surplus/ / deficit. That's basically your revenues minus expenditures for that year to show if we're are we building a cash balance or are we draining a cash balance. Um, one thing to note that all current expenditures and current outstanding purchase orders and projects are all reflected in the current year, fiscal year 2025, because we have to account for all those certifying contract. And so in when we get to the next fiscal year, a lot of stuff's going to bump forward because the actual cash flow hasn't occurred yet. Uh but I had to reflect it in the current fiscal year to make sure it's accounted for uh for the purpose of certifying contracts. Um
068so that's kind of where we're at right now. It's this fiscal year is going to be tight right now. You know, for the career tech edition and the Riverview edition, we assume the latest estimate that we had from a few months weeks or months ago plus 4%. Uh we'll know soon the next what? next week. Maybe next week is of where we're at. So, I think at this point at that point, we'll see what those numbers come in at and address it from there. So, if it comes in at $27,000, we're transferring money from the PI, right? We would have to look at from the from the general fund. I'm sorry. You'd either have to transfer from the general fund or do an advance from the general fund. Uh other options would be borrowing for
069you could borrow for Riverview and then for Buckeye you put some cash down and borrow the rest for Buckeye, but that would you know obviously splitting into two borrowings. So there's options they consider or it's just eating up some of next year's cash basically. Yeah. Or you another option is you can split the contract um and get into another fiscal year and not transfer money. Right. We'd have to look at that. There's there's Yeah, that that's we discussed that option before. We'll have to see what the numbers come in, right? You know, hopefully they're close. You never know. I mean, right. I mean, we're we're at the end of April, the end of June's the fiscal year. And um so we'll be into starting July 1st, we'll be into another fiscal year. And um it'll
070give us a little more flexibility. Any other questions on on that? What are we getting the GMP for? We have a tentatively scheduled for May 8th. Working on time sometime in the morning. Um, is that going to be a a buildings and grounds meeting with with buildings and grounds? Yeah. Just want to make sure that limited buildings and grounds because they just want to go over the numbers. Yeah. So, we'll make sure we'll put out the notice so that it'll be recorded. Okay. Is that it? That's it for that one. And then you have a preliminary five-year forecast. Yep. So, I'm actually going to combine the next two items since they kind of go hand in hand with the state budget. Um the state budget obviously the biggest issue is that 30% cash balance limitation.
071One of the things we discussed in the finance committee with our 5-year forecast we have historically since I've been here was decided before I was here. We included fund 030 the joint financing district fund in the forecast. Um hasn't made sense because it's pays for teacher salaries and benefits. uh but it's not required to be in the forecast and the other districts in the financing district do not report it in the forecast. The state legislators using the 5-year forecast reporting for their cash balance determination. So, we're artificially inflating our cash balance by including the financing district fund. And it's probably best just to take it out so we're consistent with the other 68 school districts in the state of Ohio. So, we did a restatement of the 5-year forecast. So, what I wanted to do
072was kind of show what that looks like and also show our property tax collections where they came in at. Uh, just so you guys have that information to digest. So, right now, I'm going to pass out what we filed in November. Just for a reminder, I highlighted right at the top to show the November and this includes the joint financing district and this does not count for the 20 mil floor. Correct. the joint financing contract. It does not count towards that. Correct. Here's a a draft of this May's five-year forecast. Did you do you did a you did a resubmission of this one without it? Is that what you said you did or are you just doing it here? We're just going to do it on the on the most recent update because otherwise you
073can't res you can't resubmit the old forecast, but you can do a a spring update. But since we're so close to the the May update, we might as well just wait. Okay. You know, in the next May, what May 22nd the next board meeting? So, and then here, this actually compares the current fiscal year, November to May. Okay. So, we can kind of go through that. We still have to submit five years in May. Correct. Well, nothing's passed, but Right. Right. Right. Nothing's passed. It's it right via the state budget currently the house proposal the senate will still have to come out with their version then they'll go into conference committee and reconcile the differences differences between those the governor the house and the senate and come out with who knows what at the end
074and could be one it could be one of the three any of the three combination none of the above who knows it's it's anybody's guess um if you look at the preliminary draft so I have the second line handed for for this coming May dated today, April 28th. For fiscal year 2024, line 5.06, our total expenditures would be restated to 50,56,000. So if the House's version of the budget was in place with a 30% cash balance limit, that would be just over $15 million be the allowable carryover cash based on that proposed house bill. Uh so we carried over $23.4 million. So you're talking a difference about $8.4 million or be that be that uh that amount that the budget commission would require to give back to the taxpayers. The issue with the bill how
075much would about 8.4 million. Yeah. If it was it was in effect at the end of fiscal year 2425. Yeah. The big issue is property taxes are on a calendar year basis and schools work on a fiscal year basis. So if the county budget commission determines we're taking $8.4 million to return to the taxpayers, it's over over the next calendar year, but that spans two fiscal years. So how does that truly work? Yeah, I think that the way the the bill's written right now is they're going to be looking at fiscal year 25. So June 30th, correct? Right. But it doesn't alleviate the issue of you're looking at fiscal year. Right. Right. Still have a half year adjusting calendar year property taxes. It doesn't doesn't line up. Right. Right. More work for the auditor. Uh
076so looking at the comparison page that I sent out or I handed out. So this is this is looking at our current fiscal year 2025 and the difference between the November forecast and the May forecast. And you'll see our general property tax revenue line 1.01 at the top. Our revenue came in about 332,000 higher. Uh actually it's about 326. There's an error in these corrected, but $326,000 higher. That's due from the reappraisal came in a little bit higher than we anticipated. And then the uh into some new construction. So the overall residential class one reappraisal number came in at 29.78%. We were projecting 28. Uh for class 2 commercial, we projected 8.58%, it came in at 10.05. Uh so that's what made up the the difference there. Now, we're not on the 20 mil floor
077for class 2, so there wasn't much of a revenue gain there. It was more on the residential side. Public utility tax line 1.02 came in about 132,000 higher. And then on the uh state funding is slightly lower right now, but it's pretty good material. line 1.06 all their revenues is down 2.9 million. That is from taking out the financing district. So that's where that number really changed. Uh it's a little bit higher than that. But we also have this fiscal year we have two cost settlements for Medicaid that fell into the same year. So they met Medicaid had fallen behind again. And so we got our fiscal year 2022 and 2023 settlements. One one of them at the beginning of the fiscal year. one that's came in now. Uh so that revenue is about 400
078some thousand higher within that line that falls there than we typically do in a fiscal year just because of a time of year we got a double payment. Uh on the expenditure side nothing has really really changed there at this point other than taking out the financing district. Uh so that's where lines 3.01 and 3.02 those reductions are taking out the financing district. What salaries are we paying out of that? It's high school salaries for subject social studies, language arts, science, and there's one more might be math. I think it is math. Yeah. And none of none of the special ed salaries and whatnot. Those are coming out of ID. So those are entitled. Those are not even included in here, right? That goes out of the federal funds. Well, I mean, there are some
079in here because you have your general fund portion of those, right? It's when they expire, but One other thing to note on transfers out. The difference there was we increased our athletics transfers from 75,000 to 100. We will need to look at uh if you recall we have a termination benefits fund that pays our severance payments and early retirement incentives and those type of things because of the STS change from originally changed it from 34 to 33 years in the fall and then 10 days ago they changed it from 33 years to 32 years we've gotten a lot more there's someone sitting I know laughing I I think she heard that so we so we're going to have more severance payments and more early retirement incentives and so we're trying to figure out what that
080number is going to be. we will probably have to transfer an extra 250,000 to that fund and we have to determine do we want to do that in the current fiscal year or do we wait till July those services get paid uh in August and September it might be we did have some money set aside we did have some but not enough right because we didn't anticipate two changes because typically you have you have good years and bad years and that's you know the 250,000 was an average over many many years what's the typical norms and just now we have a lot happening at one time that's more than anticipated. So so we're either going to take a hit for another one this year or we're going to do it twice next year. It doesn't
081make any difference. So I'm thinking we probably just look at doing it this fiscal year um maybe towards June and just approved it in June towards the end and kind of do it before we close out lower the cash balance. And then when do we when do we typically do that transfer in any normal year? We typically do it in July just to have the cash at the beginning of the fiscal year because typically your severance happens at the beginning of the fiscal year. Yeah. Well, I mean like August September time. So if we do it now, we won't need to do it in July but at some point we'll have to do both. We have to do both. Yeah. And then will we deplete that fund and we won't have anything for next year?
082We'll have some in there still. So it's we're we're kind of figuring out those numbers now and making sure what that looks like. uh because we don't know how many you know it's a big decision for teachers to make finding out that all of a sudden hey it's the end of April and I can retire at the end of May. So it's sweet. It's there could be more coming that they're not aware of. We have some people that are looking at it and trying to make major life decisions in 30 days. for the termination benefits fun. We split the difference and do an extra 100,000 this year and in July we do another 100,000 on top of the 250 do to kind of level it out over two fiscal years and uh what that might
083look like because we'll know a little more in a few weeks of how many more retirements are coming. Which number is uh the state looking to which uh line is the state looking? I believe it's the uh it's the 5.05 line total expenditures and other financing uses for the for the 30% of it's 30% of your prior year expenditures. That's the expenditure number for cash balance looking at 7.02 before encumbrances my understanding. So we'd have to take for example the way it's stood right now 30% of that 7 million just about give or take right it'd be little 6 million if you looked at 5.05 and 30%. That that'd be 15 million. Yeah it' be 6 million. Are they looking at 702 or are they looking at six 5.05 for what our operating and then
084you're allowed 30% for your cash balance. You're taking 30% of 5.0. 05 of the prior fiscal year and comparing that to 7.02. What's that difference those numbers? Right. Right. You're basically 16 million and 22 million. So a little over 6 million. There's a lot of talking going on. Yeah. And it's one of those things too. And where where would we put that? Or would you just take it out of line 101? Where do you budget that? It would be a reduction to 1.01 over two fiscal years. And the the other logistics of it is which levies are they rolling back? Are they rolling back our 2017 levy that doesn't have the homestead roll back reimbursements from the state? Are they rolling back levies prior to that that do have those rolled backs from the state?
085Is it an al is it a prorated over what levies are in place for your district? Because depending on when the levies were passed, costs a tax payer differently based on what laws were in place at that time. Have you sent that email to all the legislator legislators? I don't know if they know what I'm talking about. Let's be honest. Basically would it would make us broke by 2028. I I figured zero dollars. If you recall from the slideshow that that Mike ended up presenting at the last meeting, we he showed the the kind of the cash balance. We started the I mean the state said we started at 47. We were at like 60% in July. Then it goes down throughout the fiscal year and in February we're about 28% cash balance. February is
086typically where we get the lowest cash balance because we we get large chunks of revenue from property taxes. I had done a little kind of scenario based on if it was already in law today in February, we would have been at I think about 5% cash balance. We would had about a month of cash balance left. So we were one month away from having to borrow for payroll. That's best case scenario based on the house budget proposal. Then the next year you'd go lower. you're probably borrowing money to make payroll in February of that year based on a 30% cash balance for Riverside. Now, if I'm our neighbors at Pel City, they're heavily state funded. So, they don't get large property tax unless they're getting two payments a month from the state. A district like
087Payneesville could keep a lower cash balance because they're getting a steady flow twice a month throughout the year where our our semonly state funding payments are small compared to everything else. So districts that are heavier property tax funded, the higher wealth districts, 30% is more of a bare minimum to survive. It's that they're not accounting for the the ups and downs throughout the fiscal year. That would be a one time. It would be one time. It would be a one time. They would never be able to do it again because nobody would have any money left, right? And they would force us into a borrowing situation two years down. It's just Now, how does this work with um the loan that we were talking about and having money on hand and investing? I mean, if
088you're in a construction project, others is that well, because in our case, that'd be a separate fund, the borrowing, but some districts don't have a permit improvement fund. They do their permit pros out of general fun. So, right now with this law that's going to, you know, something's going to get passed. We're in a good time frame of when we're going to go borrow money because this isn't really going to affect us. But man, if you wait another six months, you're going to be affected. How does it with the taxes are collecting though? Because some of them go to the PI fund, but they're different let be adjusting your they have the way the way the house proposal is to only look at current expense levies, okay? Which is your inside millage and your typical
089Okay. Okay. So, they would be looking at perm at this time unless they add something to that. Who knows? Yeah. Right now, they're just looking at general fund. And then you combine you combine having $7 million less in money with something happening here when I don't have a lot of money in the PI fund left, then that's significant. Now, I don't have money. I don't have any money to transfer from the general fund. There would be anything left. How much was our boiler project when the boiler went? It was in the $400 some thousand range. I thought it was 5 550 515 530 fees and everything else to So if you end up having an excess, let's just say I don't know. I mean, what are your options? you was I mean basically it's funny
090I read an article that said that uh school treasures and superintendents are smart and all they're going to agree is we're going to start moving money around to I heard that but I wanted to hear what you had to say. There's some there's some legislation where they're looking for it because they know that as well. So I've read some things to that extent. I've also read the Senate I just read this today right before the meeting. The Senate is looking to adjust and to do something with the 21 floor as well. So that's something to definitely watch. Um Now they're on the 20 mil floor and what counts for the 20 mil floor and going even below the 20 with the 30 with the carryover. Um you look like they're going to get you coming
091and going. And one of the things that I heard and which makes sense what I would do is if you're going to transfer money out of your general fund, have it well documented while you're doing it. So for us it would be we're going to terminate or we're going to transfer the termination benefit funds because the SRS change that was unexpected and we're going to have higher seance. We would transfer money to what's called O24 funds self-insured health insurance funds. If we're going self-insured then let's fund the reserves and start building that up now. And then for permanent improvement fund we have many capital needs. So we can put in a per improvement. So all right, but once it goes to permanent improvement, you can't take transfer or one way. So once you transfer it,
092you can't transfer back, right? So you don't lose a single tax dollar when you transfer what the excess would be that you're not going to get. You transfer that to other funds and as long as you have good uses for it, um you are fine and you will get fully funded on your taxes on your tax revenue. Right. But then you lost your cash balance and then No, no. What I'm saying is but you but you moved it out of your general fund. So if if you let's say let's say 30% you're you're allowed to have um 16 million but we have 22 million. If you leave that 6 million in there the next year you're getting 6 million fewer dollars from the taxes. You move that money and protect that money you're getting full
093tax dollars and you get to use that money for your purposes. Right? It's pretty simple. At that point, you could just transfer to the PI fund and pay for your stuff in cash and not borrow. Exactly. That's exactly right. I mean, instead of losing my tax dollars, I'll use my tax dollars that they're going to take back and raise it. So, six month six million just gets moved and we're protected. I've already spoken with legislators about that. They're not going to be a watchdog uh to that effect. Um and if you have building projects, they are uh looking at very much 100% allowing that. It's the other ones that you really have to document and explain yourself. Right. One of the things I don't think the legislators understand is the cost impact of if that
094money leaves the general fund, you're losing interest revenue to your general fund. Yeah. They they're not bigger in any of that. In fact, you can't uh sign multi-year union contracts. So now you're negotiating every two years instead of every threes. Now you've increased legal cost. Now you're going on the ballot more frequently than you typically were and there's election cost. So all that stuff is what's coming up in testimony and and then they're going to have to figure out what they're going to do. So at the end of the day, the one time property tax reform is actually going to cost the taxpayers more money when it's all said because the reality of it is just going to create it's a shame. We're going to lose revenue. We're going to put an arbitrary limit that
095might work for one district but doesn't work. Now then you have to cut it. That's ridiculous, too. So, it's Well, and and and to your point, cutting what's the first thing that a lot of people are going to cut? They're going to cut the trades and all the extra stuff that people are wanting to do so they don't have to pay a big college bill. So, it none of it makes sense. None of it makes sense. You basically be going back to the voters for a levy every year because you can't have enough money in your fund for two years. So, you just have to raise tax dollars every year and let it expire and then vote on it again. But it's it's the things we worked hard like our extracurriculars, our lesson bring all
096those back and the CTE win CTE and the programming that goes into it. That's what I mean. And all of that I mean the people support teachers all those teachers are looking next year covered this year certainly changes your forwardlooking plans on what you're going to teach. Sure doesn't make it happen. We could put Dan on retainer for three years. I mean, depending on what we do, Gary, um, you know, I mean, obviously, you don't want to short the general fund, but it could obviously change this forecast on, but then, as it was mentioned earlier, there's uh, never um I mean, there's plenty of projects to do. Yeah. We're not going to know. We're not going to know for another month. Yeah. So, no point in guessing. I mean, that percentage was lower than 30.
097I'm hoping 25 and let's just see where it ends up. Yeah. We won't know until after the forecast is done, right? So, it doesn't matter. Okay. Thanks for preparing that. Okay. All right. Thank you, Gary, for that. State budget Okay. Is that it? That's it. Okay. Next meeting announcement. Buckeye Ad Hoc Committee. April 29th, 2:00. Finance Personnel Committee. May 15th, 8:00 a.m. Buildings and Grounds. May 20th, 7:30 a.m. Board of Education meeting. May 22nd, 5:00 p.m. Special from 6:00 to 5:00 for programming. Well, thank you. Special request. Mr. Official, can I Yes. Yes. Can I do an update on discipline executive session? Can we add update to discipline? Okay. We had something transpired today. Okay. You good on that now? Yeah. Just you just need to add um discipline. Okay. All right. uh be resolved
098that the Riverside Local School District Board of Education hereby adjourns to executive session at 6:21 p.m. to discuss personnel matters and discipline rel relating to the employment of public officials in the Riverside Local School District Board of Education. Hereby designates all matters discussed in this executive session as strictly confidential and finds that this designation is warranted because of the status of these matters and the need to preserve confidentiality to properly conduct the business of this board of education. Can I get a second? Second. Thank you. Gary, can you take the role? Scott Visel. Hi Dennis. Hi Denise Brewster. Hi Linda Grassi. Hi Lauri. Hi. Thank you.