District to bond $8.37M for upcoming projectsApril 23, 2019
By LEANN BURKE
JASPER — Greater Jasper will bond more than $8 million this year.
At its meeting Monday, the Greater Jasper School Board held a preliminary determination hearing on upcoming projects that included a presentation from Jim Elizondo, an investment banker with Stifel Public Finance of Fort Wayne. In his presentation, Elizondo broke down how borrowing $8.37 million would affect the school’s debt service fund. According to the models, the board could enter a bond for anywhere between 12 and 20 years without increasing the debt service property tax levy, which is currently about 60 cents per $100 of assessed value.
Schools use the debt service fund to take out bonds for larger facilities projects. The debt service fund is funded through property taxes. As school corporations pay debt off, they typically take on new debt in an effort to maintain a stable property tax rate. In February, the board held a work session to begin discussing future projects.
Since the work session, the board and school administrators have decided to break the corporation’s upcoming facility maintenance needs into two phases.
The first phase, which the upcoming $8.37 million bond will cover, includes upgrades to the HVAC systems; security systems; classroom equipment, including chairs and desks; technology at both Jasper Middle and Jasper High schools; and a possible transportation facility for the corporation’s bus fleet.
Following Elizondo’s presentation, the board discussed choosing a 12-, 15- or 20-year bond issue. Board members eliminated the 20-year period quickly. The shorter periods offered considerable savings on interest while still giving the corporation flexibility in the next five or so years to bond again for other needs as the corporation pays off older debt.
That flexibility is important, Superintendent Tracy Lorey said, because administrators know that Ireland Elementary will need costly repairs and updates in the next few years. Some of the mechanical equipment at Ireland, for example, is almost 30 years old.
“Those are some pretty big-ticket items,” Lorey said.
Under Elizondo’s models, the corporation could borrow up to $45 million in the next five years without increasing the debt service tax levy. Lorey pointed out that $45 million is the maximum they could borrow. It does not mean the corporation will borrow that amount.
Focusing on the 12- or 15-year repayment period for the $8.37 million the board will take out this year, Board Member Ken Schnaus favored the 12-year. In that option, Schnaus saw additional savings in interest while still having flexibility later on, even if it would require a couple more years of waiting than the 15-year plan.
“I look at that $40 million. We’re building a whole elementary school for less than that,” he said, referencing the Jasper Elementary project.
Board Member Arlet Jackle preferred the 15-year repayment plan because of the flexibility it offered.
“I’m worried the 12-year may strap us too much,” she said, citing the needs at Ireland Elementary.
If one of the older mechanical systems at Ireland were to go down, the corporation would likely have to take out bonds to cover the cost of replacing it, as parts are no longer available for most of the pieces, Lorey said.
The other board members agreed with Jackle. After discussion, the board voted to pursue a 15-year repayment period.
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