001Okay, I think we're ready. We'll go ahead and call this uh meeting to order. Good evening, everyone. Um we will start with the pledge of >> allegiance. I aliance to the flag of the United States of America and to the standy andice for all. So, good evening everyone and welcome to this evening's finance committee meeting. Um, do I have a motion and a second to approve the minutes from our October 14th finance committee meeting? >> So moved. >> Second. >> Motion by Mr. McBain, seconded by Mrs. Rnik. All in favor say I. I. >> Any opposed? >> Motion carries. Items for recommend um items recommended for work session or action. I think I'll turn this over to you, Mrs. Hower. Great. Thank you. Um, so October uh October came and went and so that is
002the first month that we are allowed to do budget transfers. So the first item um that I'd like to move to work session um actually I think I might be moving this to action is um the budget transfers for October 1st. So this this is just um normal business to move monies from [snorts] one bucket to another inside of the inside of the budget. >> Okay. Okay. Do I have a motion and a second? >> So moved. >> Second. >> Motion by Mrs. Mc Merry, second by Mrs. Rnik. All those in favor say I. >> I. >> Any opposed? Motion carries. >> Could Could I add something here? >> Yeah. Yeah. >> I I think uh Miss Hower that you've actually implemented a lot of the uh new reports and we haven't Oh, you haven't
003yet? >> No, not yet. >> Okay. >> Not yet. Uh we well we have new board members coming on next month. Yep. >> Uh could we have uh information session for them on how to read the reports? >> Yep. Absolutely. I think I think we're planning a whole board packet to go out to them but then we can absolutely have a finance training with them probably sometime in December maybe or maybe even into January um before definitely before we start the budget process. >> Okay. I know >> Mr. Shroy had done that for us when we first came on the board and I found it a big help. >> Yep. Absolutely. So, when we have the new folks come on before we start the budget process, either December or January, we'll do something for those
004guys. >> Thank you. >> Yep. >> Um I'm going to take the next couple of items as a group, uh three, B, C, D, and E. There are all um assessment appeals where we've gone through with council. We've gone back and forth and we've settled on a number um in some cases that reductions are significant. In some they're just borderline. So, I think they're all but they they've all been vetted by council and they've all been approved by council. >> Okay. Do I have a motion and a second for items B, C, and D in the agenda? The assess assessment appeals. >> Real quick and de Thank you. >> Yep. BCD and E. Sorry. Old lady. [laughter] >> Motion by Mr. Fusco still and Mr. Res. Any comments or questions? >> Can I ask a
005question? >> Yes, please. >> Mrs. Hower, I think I asked this last month, but I don't remember. Regarding these settlements, and it's already allocated or identified in the budget that the impact will be minimal as we go forward. I don't know if I asked that correctly or remember. >> I mean, every year we put into the budget funds in case there are assessment appeals to offset the loss of revenue. Yeah. So, we build that into every budget that there could be assessment appeals every year. >> Do you anticipate for the next budget they'll it'll be a higher number, higher amount of money than it was last year? >> I I have no idea at this point. It it would it's really going to look at what the trend is over the course of the year
006and we're only three months into the year at this point. So, >> all right. Thank you. >> Yeah, absolutely. >> Okay. >> I think it's going to depend a lot on the economy over the next six months. So, >> perfect. Thank you. Any other comments or questions? We have a motion and a second on the table. All those in favor say I. >> I. >> Any opposed? Motion carries. Um so the next item is item uh 3F is the renewal of our copier contract with Frasier Company. Um so in 2015 we I'm sorry in 2010 we went out and we did a great big RFP. We had about seven people respond and Frasier won that RFP. In 2015 that was a 5-year contract. In 2015, we renewed them under a co-stars agreement. Um, in 2020,
007we went back out again and we did the great big RFP. We had six or seven people respond. Frasier won again. Um, so this is now the the first renewal of that 2020 RFP process. Um, rather than go out for RFP again, um, I just have elected to re uh well, I'm asking to extend this contract for another five years under the Co-Stars agreement. Um the lease payment does increase somewhat, but they're going to hold our they're going to work with us to try to reduce some of our copier cost. We're going to be moving some high-speed color copers out and putting some low-speed color copiers in to try to push people to black and white. Um especially in our elementary schools where everybody seems to want to print everything in color. Um so we
008will have [laughter] a conversation. Um it's sounds silly, but it's uh sign it's almost 12 times as much um to print in color than it is to print in black and white. So if it doesn't need to be in black and white or I'm sorry in color where we're going to start trying to push those to slower copers to make people not want to use them. Um as well as doing some printer controls to try to bring down the cost overall to hold the contract as costneutral. So >> we'll do a motion and a second and then we'll open it up for comments and questions. Do I have a motion? >> Motion by Mr. Fusco. seconded by Mrs. Mr. McBain. Um any I think we'll start with Kathy and then Al and and then any
009other >> Thanks. I have a question regarding the impact to the teachers and the students and what was their comments when they were asked about moving in this manner in this strategy which financially makes sense but from an educational perspective what's the impact? >> We haven't had that conversation yet. >> Okay. Then my personal opinion is my two cents would be we do not vote on this until we understand the educational ramifications to this if there are any. >> When is the contract up? >> December. >> So they were going to they were going to move the machines in and by slower I'm talking about going from 100 pages a minute to 70 pages a minute. >> Okay. I just think because it's elementary and there is lots of color when you walk into a
010building that I would want to know this and I am not an educator so if others on the board don't agree >> I I wouldn't mind I don't want to you usurp you out but um I would say because I work in an elementary school they might not be thrilled about it but I don't think it's going to cause any kind of substantial problems to any of the teachers in the elementary school. Um, I really don't I I know like I where I work, we're just pretty much told don't use the color printer, >> right? I mean, it's pretty common stuff, you know. Uh, I I I certainly would have no problem voting for this. Okay, if that makes >> then I withdraw my negativity. [laughter] >> I will say they did an analysis. So,
011Frasier brought in an analysis for us and we print and color about 10 times more than the K12 average. So, [laughter] our elementary schools, our secondary schools are right in line, but our elementary schools print anywhere from seven to 10 times more color than other people. >> Efficiency over like Okay, I don't mean to make it silly, but it just hit me as I normally don't think that way. >> And I want to I want to preface too like there's a whole system behind it where we can get things to default to black and white where right now there's some of you can choose your own default. Um, so sometimes you print in color and you don't even realize you're printing in color. Even though it's coming out black and white, you're actually using the
012colors. Um, so by changing some of those settings and by doing some controls in the back end, we should be able to to reduce the cost of our copies. >> We make we spend an enormous amount of money on paper. So um, which we should I mean kids need to learn to read and write and and touch and and tactile and all that kind of stuff. So but if we can find ways to limit some of the impact, we're trying to do that. I was a high school principal when we switched to Frraasier and I'll say that the growing pains from switching vendors and machines uh far exceed the pain from going from 100 pages a minute to 70. >> Yeah. And the operability and the interface all that will all stay the same. >>
013Yeah. I I think about the color. So that was it. >> Thank you Mr. Rash for waiting patiently. >> Oh that's [laughter] okay. I thought it was a great conversation. I I I I commend you for thinking about the uh students in the grade schools. U I I had a a question about your statement that uh costs would increase for machines by 20% because of tariffs. >> Yeah. That >> because because I would thought the machines are already in our building. We're not getting new machines. >> We are getting new machines. So the whole Yeah. at so at the end of your fiveyear at the end of the five-year contract they refresh all of the machines. >> Okay. >> So Frasier will come in probably over Christmas break um and they'll start swapping out machines
014over the course from about mid December to mid January. They'll go through all 23 buildings or 24 buildings and refresh all of the machines. >> Yeah, >> that makes sense to me. Thank you very much. >> And they they refresh whether or not we want it or is so that's just part of the >> that's part of the that's part of the contract. Yeah, that's Yeah, cuz the machines that are in there now are coming. They're about 5 years old. So, they they're like we've actually asked them. We had a couple die and um we asked them to like give us loaners like I'm not going to pay you for a new machine when we're going to redo this and they gave us loaners to get us through this at the end of the lease.
015>> Interesting. Who knew there was a life cycle to Yeah. >> machines and it's five years. >> And it's about five years. Yeah. >> All right. Thank you. >> Okay. Great discussion. I believe we have a motion and a second on the floor. So, all those in favor say I. I. >> Any opposed? Motion carries. Um, and then the last item for approval is just uh it's it's time for us to go out to bid for an insurance broker. Um, so this is just requesting permission to advertise for that RFP. Um, I I think it'll probably it'll be for this it'll be for the 7126 year and that's when the contract will start. So, >> okay. Do I have a motion and a second? So, moved. >> Motion by Mrs. Stole, second by Mr. Fusco.
016Any comments or questions on this matter? >> Okay, seeing none, all in favor say I. >> I. >> Any opposed? Motion carries. Informational items. >> Yep. Um I put out there for you guys to review the proposed um the act one calendar that's from the state that just shows the legal deadlines. We've already met the first legal deadline which was passing of the resolution not to exceed the Aquan index. Um so that moves us basically our next big deadline is um the April time frame to advertise for proposed final budget and then May to advertise for final final. Um I will have a more detailed calendar on when we're going to have budget review meetings and all that kind of stuff after we swear in our new members. We want to look at some um
017calendar changes possibly for meetings in the 26 uh calendar year. So I didn't want to set anything up until we have we know what those meeting dates are going to be. Um so that's the only thing on budget. Just a quick update. I didn't put a number an item here because I don't have anything substantial. Um audit is going along very well. They are waiting on they we are still waiting on a guidance for our single audit which is the federal component of our of our um of our audit. So it's the it's called the um it's your single audit. It's part of the fiscal audit. Um they're waiting on federal guidance which has not come yet. Um so they can't issue an opinion until we get that. Um so we're waiting on that. But
018the fund statements are pretty much done. Um we're looking at footnotes this week. Um I just got them about two hours before I walked into the meeting. Nothing surprising there. Um they have not said that they found any findings. Um that's barring the single audit. Um so >> question just for the community and and for my own just to remind me are audit typically start what is audit season for you? When does um they normally come usually wrap up? >> They they normally come in around midepptember. Um so we take July and August to prepare. They come in midepptember. they do their fieldwork um on-site and remotely um to do testing and that kind of stuff. September, October time frame. And then normally we would have usually they had here I've been in some districts
019where it goes into February, but here the timeline seemed to be about November. They had audit committee uh or the had the audit first report come to the finance committee. Um but again, we're they're waiting on that letter from the federal government for some guidance. So, we'll we'll probably see them in at the December finance committee meeting. >> And that response back from for the for the single audit federal portion, is that needing to come from the Department of Ed or from the Office of Grants Management? >> It's I think it's the Department of Ed. Okay. Yeah. >> Okay. Thank you. >> Yeah. >> Okay. Any other comments on that agenda item? Okay. Thank you for that update. Um, I don't I I'm going to have a standing item in theformational items just on food
020service and transportation because they they also fall under my office. I don't have any any updates for this month, but I'm going to leave that as a standing item. Um, and then we have our student representatives with us tonight. Um, so Roel and Hershey um are our student representatives. Do you guys have anything that you'd like to share this evening? >> Um, no. Nothing from me. Okay. >> Not as of now. >> Okay. Thank you. >> Do the two of you just want to introduce yourselves a little bit? Tell us what grade what you're involved in at North Penn High School just so we get to know you a little bit. >> Okay. Um my name is Hershey and Amundra. Um I'm in 12th grade. Um I'm involved in mock trial um NHS and um
021many other like cultural clubs like Indian Cultural Association. >> Great. Thank you, Hershey. >> My name is Rebel Casahon. I'm a junior. I'm involved in the Black Student Union. Um, I'm also involved in the cultural proficiency and equity student ambassadors. I go around with my class cabinet, SGAA. >> Great. Thank you, Rebel. >> Um, and then >> so glad to have you both here. Thank you. >> Sorry. And then I skipped over on purpose um just so we could get everything out of the way. PFM is here to this evening as well. Garrett and Zach are here um to talk about um our bonds that will be coming up in January um and what we're looking at for for next year for to continuation of the bond cycle for the high school project. >> It's
022common for people to skip over us on purpose or leave before we present. [laughter] We're used to these things. So, uh Zach Willard, PFM, good to see you. Uh Garrett's with me as well. So, we'll we'll quick walk through this handout tonight. You know, this is just an update. We're not asking for for anything tonight. You know, each fall we kind of give you the update on what's coming for the new year. Okay? So, we'll kind of walk through this. Feel free to ask questions and we will be fairly brief. So, if you flip to the first page, this is that same interest rate chart that we show you each time we're here. Now, remember, this is not meant to say where you're going to borrow money. This is meant to be an index. So,
023this is the tax exempt version of the 10-year Treasury since the district can borrow tax exempt. And if you just scroll down to the bottom of the page on the screen, if you can do that, sorry, I know it's a pain. Um, you know, you can see where the 10-year rate is right now. It's about a 271. Okay. Now, when you borrowed earlier this year, um, you borrowed right around 4%. Okay? That was back in April where that spike was, that was right, you know, kind of around the tariff announcements and all those things. So rates kind of went down and then they shot up and then since then they've been trickling down. Um we priced a couple school district bond issues last week. The market was closed today, but last week Rner Township School
024District priced some bonds and Garnett Valley priced some bonds. You know, I think if you borrowed in today's market as North Penn based on the structure we're talking about, you're still right around that 4% range. Okay, so 4% fixed for 25 years. So when you think about it from that standpoint, still pretty good interest rate. So, that's kind of the real quick version of where the market is. You know, I know everybody knows about the Fed. They've been decreasing rates. They expect that to continue um you know, into December and and through the through the new year. You would think that as that happens that that this chart will continue to trend lower. Now, that doesn't necessarily mean that's what will happen, but that's kind of the, you know, the best guess at the moment.
025Okay. [snorts] We're not thinking about issuing the next trunch of bonds probably until you know the end of quarter one kind of a March time frame and we'll go through a timeline in a second. Um on page two we have a lot of the same words we've had on here for a while. I'm not going to go all the way through this but just for the public's kind of um recollection if you remember you know we're talking about you know $259 million project. And so we're borrowing this in in phases over multiple years. That last estimate was from the May time frame. So, I think we're expecting between now and kind of the end of the year to get an updated cost estimate and some new draw schedules to show, you know, how we expect
026the money to be spent over the next few years. And as I said in bullet point number two, we did borrow the first $10 million for this project. That was for startup costs um to to pay for that as we as we keep this project moving. Okay. The only other one I'll hit on here, um, when you go down to number four, the federal tax law recap, we always like to remind you that when you do borrow tax exempt money, you have a reasonable expectation that you're going to spend 85% of that money within three years. And that's why we've been holding off. We didn't start borrowing a few years ago during the planning phase. We knew this was going to take a while. Um, and this year with the with the first $10 million
027piece, that was kind of the right number again to start the projects. As we get into getting bids back, construction started, you're going to see, and we'll show you this in a page, the size of the borrowings will ramp up quickly, right? And that debt service is going to start to accumulate and hit the budget, you know, quicker, right? Any questions about that page on page number three, this is your existing debt service. So, as a reminder, the top half is the gross debt service. So that's what you pay each year. So when you look at the budget that Steve used to prepare and the terra going to prepare, you're going to see column seven, which is, you know, one single number for here's the debt service that we pay and it's made up of
028different series of bonds and notes. Um, in the 26 year, you're at about $12.4 million. Okay? Now, as we go through this plan, you're going to need to get up to something like $17 million in order to complete all the projects. So, as you move forward, you know, you're going to need to phase that into the budget. I know there was lots of discussions on how you do that over the last three and four years, you're going to kind of continue to to to think through that and, you know, how quickly you do it or how slowly you do it, but we at some point we have to get to that higher number of about 17 depending on the size of the project. And then the bottom half of this chart is net of the
029state reimbursement that you do get on some of your old bond issues. So, we call that your local effort. So, that's the net number. So again, in the budget, you have you're going to pay out that 12.4 and then you have a receivable coming back for a few hundred,000. That's the state reimbursement that you get. So just real quick primer on that page. Okay, so page four, this is the page you care about. So this is the page we've been looking at a lot over the last four years and even going back further than that. So when you start left to right on this page, columns eight and nine, that was your existing debt service and your existing budgeted numbers before we borrowed the money this spring. Okay? Then in the columns one and 10
030in the blue, that's the $10 million that we did earlier this year. So that happened. That's locked in. Those are the payments. Okay? Everything after that, the red through the orange, those are all the hypothetical borrowings that are going to come in the future. As we've always said, this plan's going to continue to change. So, when you look at the top of the page, it shows that we're going to borrow $60 million in March of 2026 under column two there. Something like that's going to happen. We don't know exactly what that number is yet. It might be 67, it might be 58. It's going to all kind of depend here over the next few months how things shake out. The timing something like March of 26 and we're borrowing all these over 25 years. All
031right? And so, let's fast forward. So, say you do all these exactly as you have it laid out here. you're going to get to something like column 17, which as I mentioned, over the next few budget years, you're going to have to go from where you are today, which is that 12.46 number, up to about 17.3 million, which is what we have on this page. Now, that debt doesn't really phase in until 2031. So, you do have a few years to get your budget up to that number. But there's never any reason you need to take, you know, this to the edge. If you can phase the debt service in ahead of time, just with act one being an unknown number, that's very helpful. And we all know that the operating costs of the district
032are always going to continue to go up and have been, right? So the the more debt service that you can get in the budget, the sooner [snorts] um you know, the better this all feels. But so this is the next step. So the next step is something like 60 million. Um if you flip to the next page, we have a timeline. So tonight's just forformational purposes at your December 10th meeting we had pencled in. It doesn't have to happen but um that you can authorize the team to proceed. That's the earliest date that you could authorize us. You know maybe January is a better time um you know when it's not the reorg meeting. And then when you authorize the team to proceed that doesn't mean you're going to go out and borrow money necessarily.
033It just means we're going to get started all the paperwork with terror. Right. There's a lot to do as you can imagine borrow $60 million. the team will start to get everything moving and then at your February 19th meeting we have pencileled in there that you could consider the debt resolution. So if you remember last year we passed the debt resolution in the fall. You do that and it authorizes the team to then go out and borrow x amount of dollars. So the debt resolution if we're going to borrow 60 million if that's the real number we're going to borrow. The debt resolution is going to read something like borrow up to $70 million some larger number. Okay? because we have to build this kind of box for the actual financing to fit in. So
034you would pass that in February and then sometime after that when the market's right and we have your credit rating and all all the things are are ready to go, we would then hop into the market, lock in interest rates and then you'd have the money about 30 days later and then that would be the next kind of phase that would be the first big phase of of the financing plan and we would move on from there. So I'm happy to answer questions. I told you we'd try to be brief. I know you have some other things to cover. Tara, I don't know if there's anything you wanted to add there. >> Nope, I think we're good for Yeah, I think we're good for >> Thank you. >> Thoughts, questions? >> Questions? >> So again,
035in those estimated steps two through six, they would change they would increase or decrease for what reasons? We're taking money from our own revenue to offset it. Is that one of the >> No, it's a good question. So there's there's a number of reasons. So timing of the of the project. So depending on how fast the project managers are spending the money, that could change how much we borrow in what year. If if things are moving quicker and we need to borrow more sooner, we could do it that way. If we decide down the road you end up with uh you know a big surplus one year and in step six we don't want to borrow 34, we really want to borrow 22 million because you're going to use some cash. That could be a
036reason things change. um if something happens with the market, if we have for some reason mark interest rates go down a percent and we decide, you know what, maybe we'll borrow a little bit sooner, borrow some of this money quicker because rates are lower. That could be topic. So, there's just a number of things that could all kind of contribute to that as we move on or the project bids come back in higher or lower and then we would then adjust the schedule. >> Can I ask a question? So these dates that are in here for these estimated steps again, are they synced with when bids will go out for phase two? Well, not phase two, pardon me, phase three, four, five. >> Yeah, it's all coordinated with the draw schedule. So the architects and
037then the construction management firm draw up a pardon the redundancy a draw schedule share it with PFM. PFM then >> starts to put together these. >> Yeah. And like we've always said, this page will change all the way until we get to the last borrowing. It'll continue to shift around timing and size. >> So, and and just for edification, this is all predicated on just the high school project. When the feasibility study comes back, if we want to start layering feas feasibility study related projects as well, that could change how we do the borrowing as well. um because we could start borrowing to do some of those other projects and maybe we do more or less in different years for those other projects for outside of the high school. >> I'll stop asking questions after
038>> that's why we're here please. >> So so if if there is the the effort to layer on additional projects >> when the feasibility fees sorry feasibility study comes back. Would this be laid out such that we would see the diff the the high school project and those projects separately? Yes. So we can make a decision. >> Yeah. So if we if we would let's say I don't know I need my eyes here. Um in January of 2028 if we decided that we were going to do a major project at the middle school that year. Um, we would say, you know, this borrowing is for 20, whatever that number is. 53 million for the for the high school and X million for the middle school project. But I'm just pulling something out of the air,
039but >> that's fine. >> Um, but yeah, we would you would know what the principal would be spent on. >> All right. Gotcha. For for us obviously, but also for the community from a transparency. >> Oh, absolutely. Yeah. Okay. And you would and the reason why you wouldn't do them separate is because you don't want to go through this process twice like back to back when you could do it once. Yeah. >> So I don't want to have to go out for two bonds in the same year. >> Yeah. We can do it all together but have breakouts internally. So you can see that here's the portion allocated to the high school. Here's the portion allocated to the other projects. >> And and these numbers are based upon what our uh bond rating is right
040now. >> Correct. >> Okay. >> Which is double A >> plus. >> Yep. Yeah. >> Yeah. >> It's been a while. >> It's a great It's a great rating. It's a good reminder. >> Yep. Absolutely. >> There's a tradition in restaurants where when the chef leaves the restaurant, they automatically lose a star. I think >> when our finance person leaves, are we automatically going to lose a star? No, >> I don't think so. We're the same district here, aren't we? >> Yes. >> Okay. >> No, absolutely. >> Comments or question? I won't cost you a star. I promise. [laughter] >> You're in good hands. >> One last one question. Go right ahead. >> Um I know we do refinancing every once in a while, but sometimes we're locked into certain sometimes we're locked into uh
041certain loans for a period of time before we can do refinancing. Are these loans automatically refinancable or do we have a two-year wait period on them? >> Yeah. So, so good question. So, if you go back to page three, you can sort of see at the very bottom of the page, I know there's a lot of numbers, there's some dates under call date. So, the the issue that we just did this year, that was under $10 million. Okay? And when it's under $10 million, it's sold with a five-year call feature, which is the shortest call feature you can have. So 5 years from now we can come back and refinance that issue. >> Okay, >> that's 2030. When we do these larger ones, we don't know exactly what the call features yet today. That'll kind
042of be something that we want to figure out when we get to the market, you know, in March, but it'll be something like seven to eight years. So it's longer because it's higher than 10 million. So there your your kind of wait period is seven to eight years before you can refinance. But all of the debt will be sold with call features. none of it will be you know non-allable. >> Um so so we have to that means that we have to wait a period of time before we we can call. >> The investors are guaranteed their money for that time before you get to the call date and then once you hit the call date you don't have to do anything. So if rates are higher we would just sit and wait. If rates
043are lower you know we we would jump into the market and refinance the debt. >> Is that a is that a legal um is that a state requirement? It's a federal Yeah, >> it's a federal requirement. Okay, >> thank you. >> Can you pull up the slide the uh page four again just with the color coding for the benefit of the students because I'm sure you're looking at this thinking what in the world did I get myself I mean what in the world is this? So I'm going to try my best from a superintendent's lens, not from a uh CFO's lens to explain what we're looking at. Okay. So what you're seeing in columns eight and nine, that's debt that we currently have. Okay? Those are monies that we owe that we are currently paying.
044Okay? The blue column, red column, green column, purple column are new borrowings. Okay? So the high school project, as Mr. Willard said, is estimated to be about $259 million. So we'll borrow money in phases. You don't want to borrow it all at once because then you're paying interest on all of it if you're not spending it, right? So you borrow it in chunks. And then what you're seeing in that blue column is how we're going to pay off that blue borrowing, if you will, you with me? And then if you look across horizontally, that's the total debt service for the budget that year. So how much we are paying towards these loans that year. So you'll see in the rightmost column, column seven or I guess it's 16. Um it's roughly it gets up to
045the highest point is 17 million and change of debt service. Those are like our loan payments that year are 17 million. So we're trying to keep it there because that's what our financial adviserss and our business department has said that's what we can afford in our budget when we get there. That kind of thing makes some sense. Okay. Mr. Willard, can you uh give a brief explanation on WAP? >> Yeah. So there's different ways you can structure debt. It's not like a mortgage or car loan where you just have equal payments every single year. You can do that. Okay. Most school districts, especially when column 9 looks like column 9 does, opt for what's called a wraparound debt service structure. So that's where your existing debt is higher up front and then it kind of
046drops off. In your case, it's, you know, 11 plus million as you can see in in the 23 budget year. 11.7 million drops down to seven, drops to three, and then out in 2035 it drops to zero. Now, having debt out to 2034, that might sound like a lot, but in school district world, that's very short debt. Okay? So, with the drop offs and with the length of your existing debt, it allows you to take advantage of what's what's called a wraparound structure where you have low upfront payments on the new debt and then as the old debt falls off, the new payments ramp up. So, like let's look at column 11 for example. That's it's more apparent there because it's a larger borrowing. You can see in the first few years, you know, the
047payments are about two million. There's there's one year where it's a $5 million number, but you can just see it's about two million. Those are lower numbers. And then when you go over to column nine in 2034, you can see that's where the debt drops off. So then the payments ramp up to about $4.9 million. That's us wrapping the new debt around the old debt. And each subsequent borrowing wraps around what the new total debt service would be. So that at the end of the day, you have a level or declining payment structure in column 16. And why you care about that is is when you fund this debt service in your budget, you're going to ramp up your debt service line item to something. In this case, it's 17.3. But once you have that
048in the budget, in theory, you never need to touch it again. You know, to pay for this debt. Now, if you do other projects, you might need to change it. Once you get to the 17.3 and it's funded in your budget, it's there for the next 25 years and it's available to pay for the debt every year after that. So you're combining the wraparound debt service structure which isn't a level payment structure, but you kind of piece all this together like a puzzle to get an answer something like column 16. Crystal clear, right? >> Yeah, I think that was really good. So if we look at the year 2027 in the black column nine the debt goes from of the the um payment for the existing debt goes from 7.6 down to three. So when
049Mr. Willard talks about it wrapping and wrapping it around some of the other payments that's why you see the bump up in 2028 in the red column that jumps up from about three to six because column 9 dropped down from 7.7 down to three. So it kind of keeps it sustained the debt service itself. So good job. I appreciate it. >> Yeah, absolutely. >> We do this for a living. >> We appreciate you coming out and we appreciate having a superintendent who's a former math teacher. This is a great partnership. So thank you. >> You can you can tell. [laughter] >> We don't do this in calculus class, though. So this is a whole different world. >> Yeah. So um again, we don't need anything tonight. So you can discuss it and then at some
050point we'll want to put that authorizing motion on and then that'll kind of get the team moving and then we would be back at the subsequent meeting for the actual debt resolution. >> Sound good. >> Perfect. >> Thank you Zach. Thank you Garrett. >> So I believe that is all for ourformational items. If there are no other questions then we'll move on to the financial reports. >> Yep. Back to you. I won't just in the interest of time for this evening, I won't be going I won't go through the reports one by one. They're there for your review. If you have any questions or concerns, you know where to find me. I'm always available to talk. Um and then I guess we could move to public comment if you'd like. >> Okay, we'll move on
051to public comment and I'll read the statement. Individuals attending this meeting and intending to speak to the committee should be aware that they are being recorded. In order to meet the requirements of Pennsylvania sunshine law, it is necessary to record the names of all citizens who speak to the committee during the meeting. To asssure compliance with this requirement, it is essential that those planning to address the committee state their name and municipality. As a reminder, public the public comment portion of the meeting is designed for residents and taxpayers of the district to provide comment and feedback on matters being discussed at tonight's meeting or matters that may come before the finance committee. It is not designated for uh designed for debate or discussion with members of the committee. When appropriate, committee members may choose to
052respond to public comment that have been made or request that a member of the administration follow up with the speakers after the meeting. Members of the audience are asked to limit their questions and comments to three minutes. And this is in reference to board policy 903. Do we have anyone wishing to make public comment this evening? Good evening. >> Jason Laneir Lansdale. Um have have a couple things. First about the color copies. I can kind of I can agree with I mean I have just a printer and you know how much it cost to refuel a printer with color ink all the time. And why we're printing up so many color copies. I'm not sure. But I totally uh empathize with that uh with that reduction in use. um did have some questions uh regarding
053the our debt service, but kind of looking at some questions that lay outstanding to me. One was the healthc care center mentioned before that this seems to be not a good option for us. We're paying a lot of money. Our insurance rates keep going up. Why are we doing it? I know there was going to be some discussion on whether or not it actually was a was a viable positive thing or if it was just costing us money. From where I'm standing, it looks like it's just it's just debt and we're just keep paying more and more and we're not getting any benefit out of it or we're not getting the cost cost benefit analysis is is in the negative. um regarding our our debt service though. So if we have 17 173 is what
054we're looking to spend until 2035 or whatever 2055 whenever however long it's going to take to get all that done. How much money are we budgeting for all the other programs that need to be done on the district? because it seems like we have a lot to do and we spending we seem to be dedicating a lot of our yearly budget to one pro uh project. So, how are we going to pay for whatever we need to do at the middle schools or I don't know if the plan is to what the feasibility study is going to say about some of the older elementaryaries, but whatever it is, it's going to be in the millions. And it looks to me as if we are just everybody in Northbend school district just realize uh your taxes
055are going to go up the full act one for in infant item. We're never going to see a reduction in taxes. We're only going to be paying more because I don't see how if we're spending so much on a single project like the high school, how we're going to be able to afford all these other project. Maybe I'm wrong. Maybe you can you can enlighten me. But I see a big chunk of the budget going to fix one problem and not sure how we're going to pay for everything else. I'll leave it there. Thank you. Thank you. Anyone else want to make public comment this evening? Okay, seeing [snorts] that we'll move on. Um our next the next meeting of the finance committee um is scheduled for December 1st. But before I adjourn and we
056move into our next event, I do just want to remind the community that the Knights supporting Knights food drive is well underway and the school board is joining forces with this the team here at the ESC to donate items for holiday meals. So I brought my donation this evening. I encourage others to continue to bring them in um at our upcoming meetings. And every school is also um donating items. Um, so I'm really excited that we're this is a district-wide effort. Um, one of the interesting things, um, is that some schools are just donating and focusing on very specialized things. So, I know that the high school it's rice and pastas and a few other things. Um, and what we've learned through this process is once we donate food, because I know that there's a
057lot of interest right now and a lot of people are donating items to Mana on Maine, is that those items have to be sorted and shelved so that they can be gathered and distributed. So, as much as it's taking for us to give and support this, Mana also has a need for volunteer hours. So, if we are able to then have one or two items at each school, it'll be easier for us to pack up and deliver, take to Mana, and we're going to reduce the burden on them for followup on volunteer work and effort, but still an opportunity for us to engage in volunteerism as well. Um so I encourage all of you to participate and all of you to enjoy um to join this effort even those who come out to meetings on
058a regular basis. We would we welcome you to join and contribute as well. Um so I believe that we are ready to adjourn the meeting and we'll go into our next event and then we'll regroup here. Yes, that I was reading a man put out a statement and it said even before the SNAP crisis that they were serving two and a half times more meals than they were serving uh just a few months ago. So, uh our community is struggling so please support man if you can. Thank you. >> Thank you for that update. Thank you. I appreciate that. Um so do I have a motion and a second to adjourn the meeting? >> Okay, adjourned. And we'll we'll regroup here in a bit.