WEBVTT 00:00:01.218 --> 00:00:11.692 - We call this meeting the order. This is now our work session for which we don't have an agenda, but 00:00:11.692 --> 00:00:22.900 - what we're here for tonight is to hear from Stiefel about our bonding capacity, our finances going forward 00:00:22.900 --> 00:00:31.070 - related to debt service, what we may have the capacity to do, what, you know, 00:00:31.362 --> 00:00:41.326 - impacts that we'll have and so we can look at what our next steps would be, what kind of a bucket, so 00:00:41.326 --> 00:00:51.191 - to speak, we might have to work with. Then we're gonna look for as long as we can. We need to have a 00:00:51.191 --> 00:00:59.006 - hard stop at 645 for this meeting and we'll go as far as we can into the actual 00:00:59.138 --> 00:01:10.170 - facilities needs that we have. But for the most part, we really want to hear from Stiefel and get, looks 00:01:10.170 --> 00:01:20.781 - like we're gonna get a SEA-1 update. And so we appreciate that part and capital financing scenarios. 00:01:20.781 --> 00:01:28.766 - So with that, I'll turn it over to... Yeah, let's just turn it over to Chad 00:01:29.122 --> 00:01:38.109 - Thank you, Chad. Good to see all of you. Yeah, so the first part of the presentation, I'm excited to, 00:01:38.109 --> 00:01:47.184 - you know, just kind of, oh, yes, sorry. Yeah, Chad Blacklock with Stiefel. Gosh, we've worked with the 00:01:47.184 --> 00:01:56.171 - school district five, six, seven years now on most of your capital financing stuff. And so what we've 00:01:56.171 --> 00:01:58.462 - spent a lot of time doing 00:01:59.106 --> 00:02:05.476 - This year is really talking aboard superintendents, business managers, understanding a little bit about 00:02:05.476 --> 00:02:12.092 - the SEA-1 impact that was passed last year. So it's almost been kind of the first half of the presentation, 00:02:12.092 --> 00:02:18.646 - or really the majority of the presentation, going over a lot of that and how that impacts overall finances 00:02:18.646 --> 00:02:20.606 - as well as your debt scenarios. 00:02:21.826 --> 00:02:28.873 - You guys know me, I'm very informal. Please ask questions as we go through here. I wanna make sure you 00:02:28.873 --> 00:02:36.263 - guys leave here tonight with really kind of a thorough understanding of how this impacts Edgewood Community 00:02:36.263 --> 00:02:43.241 - Schools, okay? All right, let me, okay. Just kind of a real basic fund slide analysis here going back 00:02:43.241 --> 00:02:50.494 - over the funds. Most of you are gonna know this and understand this thoroughly, but I always like to just 00:02:50.626 --> 00:02:58.937 - Go over this slide as kind of a foundational understanding that we operate using fund accounting in 00:02:58.937 --> 00:03:07.415 - Indiana public schools. All public schools have to use fund accounting. The state of Indiana tells us 00:03:07.415 --> 00:03:16.058 - what revenue has to go into each fund and then what expenses come out of each fund. And so up here I've 00:03:16.058 --> 00:03:18.718 - got just really our major funds 00:03:18.818 --> 00:03:25.600 - And tonight, I'm gonna really probably be focused more on our property tax supported funds. But I just 00:03:25.600 --> 00:03:32.580 - wanna kinda quickly go over these. In the blue, that is our education fund. I call that the instructional 00:03:32.580 --> 00:03:38.572 - fund. The reason that I call that the instructional fund, that is the fund that we pay all 00:03:38.572 --> 00:03:45.157 - of our instructional expenditures out of, as do all public schools. The revenue that goes into that 00:03:45.157 --> 00:03:47.198 - fund is state tuition support. 00:03:47.778 --> 00:03:55.376 - The state tuition support is guided by two things. The enrollment of the school district, which is counted 00:03:55.376 --> 00:04:02.691 - every six months, and what our legislators establish as the per kid funding amount. So we simply every 00:04:02.691 --> 00:04:09.792 - six months take account how many kids you guys have. We multiply that by the legislator established 00:04:09.792 --> 00:04:16.254 - per kid amount. That tells us the amount of revenue that is going into the education fund. 00:04:16.482 --> 00:04:23.415 - that is for instructional purpose, okay? The next fund as we work to the right is the operations fund. 00:04:23.415 --> 00:04:30.146 - The operations fund funds all of our operational expenditures in the school district. That includes 00:04:30.146 --> 00:04:36.877 - transportation, custodial, maintenance, utilities, central office staff, any kind of capital outlay 00:04:36.877 --> 00:04:43.675 - that you wanna cash fund. If you wanna buy a new school bus, you wanna put a new roof on a building, 00:04:43.675 --> 00:04:45.694 - you can pay for those things. 00:04:45.890 --> 00:04:53.907 - out of the operations fund. Most school districts today don't have a lot of money left to pay for capital 00:04:53.907 --> 00:05:01.622 - expenditures once we fund all of the things that I mentioned in the beginning. The operations fund is 00:05:01.622 --> 00:05:08.126 - funded by two primary sources of revenue. The main source of revenue is property tax. 00:05:08.610 --> 00:05:15.987 - The second source of revenue is we are allowed to transfer some money from the education slash instructional 00:05:15.987 --> 00:05:22.891 - fund over to the operations fund statutorily. Every school district, I work with 140 school districts 00:05:22.891 --> 00:05:29.794 - in the state. Every school district I work with transfers something and you guys are doing a transfer 00:05:29.794 --> 00:05:31.486 - as well. There is a cap. 00:05:31.746 --> 00:05:39.020 - on the amount that we can transfer. But that is a fairly large source of revenue going into the operations 00:05:39.020 --> 00:05:45.818 - fund. So property tax and the transfer from the education fund. As we move to the next to the right 00:05:45.818 --> 00:05:52.616 - is the debt fund. The debt fund, just as it is titled, all we pay for out of the debt fund is debt. 00:05:52.616 --> 00:05:59.550 - You guys have outstanding bond payments that we pay twice a year. You pay those out of the debt fund. 00:05:59.714 --> 00:06:05.615 - pretty much 100% property tax funded, okay? The next slide to the right, you guys don't have, it's not, 00:06:05.615 --> 00:06:11.459 - I put this up here, a lot of my clients have an operating referendum. You guys don't have an operating 00:06:11.459 --> 00:06:17.474 - referendum, that is property tax funded. It's its own separate fund if a school district has an operating 00:06:17.474 --> 00:06:23.261 - referendum. Down and below in the kind of that salmon color is the rainy day fund. The rainy day fund 00:06:23.261 --> 00:06:25.758 - does not have an ongoing source of revenue. 00:06:26.178 --> 00:06:32.618 - The only revenue source that goes into our rainy day fund is we can transfer dollars out of the education, 00:06:32.618 --> 00:06:38.997 - the operation, or the operating referendum fund into the rainy day fund. Property tax doesn't get receded 00:06:38.997 --> 00:06:45.016 - in the rainy day fund. State tuition support, none of that gets receded directly into the rainy day 00:06:45.016 --> 00:06:51.095 - fund. Any time that a rainy day fund transfer is made out of a fund into the rainy day fund, it must 00:06:51.095 --> 00:06:53.502 - be board approved through a resolution. 00:06:58.242 --> 00:07:08.927 - Yes, yes, sir. Yep. With our current situation. And this help art, the two new board members to coming 00:07:08.927 --> 00:07:19.507 - on January, the art, we're not doing the 15%, correct? Debbie, we're doing, we stopped it. We stopped 00:07:19.507 --> 00:07:27.806 - it for now, right? But it was 10% last year, right? I think it was close to 15. 00:07:28.258 --> 00:07:40.673 - Okay, but we've stopped doing that for the time being. Okay. Okay. And then in the rainy day fund, we're 00:07:40.673 --> 00:07:52.615 - right at a half a million right now. Okay. All right. Other questions about this is just kind of the 00:07:52.615 --> 00:07:56.990 - foundational understanding. Correct. 00:07:57.250 --> 00:08:05.001 - of all of this, yeah. Okay, I wanna dig down a little bit deeper into the two property tax supported 00:08:05.001 --> 00:08:12.828 - funds, okay? The reason I personally think this is very important for all of us to understand is that 00:08:12.828 --> 00:08:20.502 - these two funds work very differently. Although they're supported by property tax, the property tax 00:08:20.502 --> 00:08:26.718 - that goes into them, that mechanism is very different, and I wanna explain that. 00:08:28.034 --> 00:08:36.403 - On the right is your debt service fund. The debt service fund is what I call a needs-based fund, and 00:08:36.403 --> 00:08:44.854 - I'm gonna define what I mean by that. The levy, the property tax levy that goes into the debt service 00:08:44.854 --> 00:08:53.305 - fund is a factor of your annual debt payments. And so the reason that I call it a needs-based fund is 00:08:53.305 --> 00:08:55.294 - that for the most part, 00:08:56.450 --> 00:09:03.113 - and some of the attorneys don't like it when I say this, but it is really true, is that there's not 00:09:03.113 --> 00:09:09.775 - necessarily a cap on the amount of debt that a school corporation can take on. That's why I call it 00:09:09.775 --> 00:09:16.838 - needs-based. Usually this fund is driven by the needs of the school district. What are our capital needs? 00:09:16.838 --> 00:09:23.567 - All school districts have some kind of capital needs, and so as you bring on new debt payments, that 00:09:23.567 --> 00:09:24.766 - really determines 00:09:25.570 --> 00:09:33.396 - the property tax levy that we're levying the taxpayers to repay that debt, okay? That debt service fund 00:09:33.396 --> 00:09:40.921 - has its own property tax rate and its own separate property tax levy, okay, that we establish every 00:09:40.921 --> 00:09:48.747 - year when you guys go through the formal budget process that you just went through that you guys submit 00:09:48.747 --> 00:09:54.014 - to the state, okay? On the other side of this is the operations fund. 00:09:56.482 --> 00:10:04.515 - So the operations fund is different because the operations fund has a maximum property tax levy. The 00:10:04.515 --> 00:10:13.104 - need doesn't matter. So if you have a need, let's say your school district, when you add up transportation, 00:10:13.104 --> 00:10:21.694 - maintenance, central office, utilities, let's say your need and all of those expenditures is eight million. 00:10:22.946 --> 00:10:30.744 - But your maximum property tax levy is only six. You can't levy the taxpayers for eight. You can only 00:10:30.744 --> 00:10:38.773 - levy them for six. So you see how those two funds, although property tax driven, work very differently. 00:10:38.773 --> 00:10:46.493 - The debt fund, bring on your debt payments and you fund your capital needs. There's not necessarily 00:10:46.493 --> 00:10:49.118 - really a cap. The operations fund 00:10:49.346 --> 00:10:56.529 - You gotta keep expenses within the property tax revenue that you bring in, which is capped. That's what 00:10:56.529 --> 00:11:03.505 - is causing a lot of schools some heartburn over the last six or seven years, because think about the 00:11:03.505 --> 00:11:10.550 - things that I said that we pay for out of operations. Utilities, bus fuel, buses, all of those things 00:11:10.550 --> 00:11:18.078 - are very sensitive to inflation, and inflation has been at an all-time high over the last five or six years. 00:11:18.242 --> 00:11:26.386 - that has caused expenses in the operations fund to rise quickly while the revenue isn't necessarily 00:11:26.386 --> 00:11:34.612 - keeping up with that, okay? Now the other thing of note is that Richland Beam Blossom Schools, their 00:11:34.612 --> 00:11:42.837 - maximum levy, property tax levy in the operations fund does increase every year by a factor given to 00:11:42.837 --> 00:11:44.222 - you by the state 00:11:44.706 --> 00:11:51.402 - that is called the max levy growth quotient. It's just a, it's a percentage, it's a multiplier. And 00:11:51.402 --> 00:11:58.097 - so every year we can grow that, grow that factor and grow that levy, but the levy that MLGQ has not 00:11:58.097 --> 00:12:05.328 - really kept up with when you match it up with inflation over the last several years. So this is a snapshot. 00:12:05.328 --> 00:12:12.158 - This slide gives you an indication of what your maximum levy is and what that growth factor has been. 00:12:12.322 --> 00:12:20.028 - So starting at that little chart at the top that we come on and use the acronym MLGQ. In 2023, you guys 00:12:20.028 --> 00:12:27.586 - were able to grow your property tax levy in the operations fund. So I'm gonna say your revenue by 5%. 00:12:27.586 --> 00:12:35.070 - 5% was the state MLGQ given to every school. Every school gets for the most part the state, the same 00:12:35.070 --> 00:12:40.702 - growth factor. However, the starting levy is different for everybody, okay? 00:12:42.274 --> 00:12:51.746 - In 24, 25, 26, the MLGQ, the growth factor was 4% every year. Statutorily, the growth quotient is a 00:12:51.746 --> 00:13:01.408 - calculation, and it's based on the change in non-farm personal income for the whole state. So as that 00:13:01.408 --> 00:13:11.070 - changes, we take a six-year average, that becomes that growth factor. In 2023, the legislators capped 00:13:11.810 --> 00:13:19.888 - kind of put the formula to the side and they capped that growth factor at 4% in 24, 25, and 26. It would 00:13:19.888 --> 00:13:27.582 - have been around 5.5% every year had the formula stayed in place. That was a part of a property tax 00:13:27.582 --> 00:13:35.583 - relief bill that was passed in 2023 to keep property taxes down. And it did because you guys would have 00:13:35.583 --> 00:13:38.814 - levied probably the full 5.5%. We reduced 00:13:39.042 --> 00:13:46.533 - that levy and so we only levied 4% every year. So when we think about your operations fund, we think 00:13:46.533 --> 00:13:54.247 - about that inflationary cost, you could have levied, you would have been able to levy 5.5% over a three 00:13:54.247 --> 00:14:01.738 - year period where we only levied the four. So that suppressed revenue for three years. Thankfully in 00:14:01.738 --> 00:14:06.782 - 2027, the formula's back into place and the state MLGQ in 27 is 6%. 00:14:07.106 --> 00:14:15.514 - So you guys were able to raise your operations fund levy going into 2027 by 6%. That next set of numbers 00:14:15.514 --> 00:14:23.521 - right below that, I'm just showing you so you have an idea of what your maximum operations levy is. 00:14:23.521 --> 00:14:31.609 - So in 24, we had a 4% MLGQ, your levy was 5,406. So you levied the taxpayers for 5.4 million revenue 00:14:31.609 --> 00:14:37.054 - into your operations fund. And that was a 207,000 increase from 23. 00:14:38.434 --> 00:14:46.823 - So the 4% essentially got you 200,000 in new revenue and operations. Then in 25, the growth factor was 00:14:46.823 --> 00:14:54.969 - 4%. That got you 216,000 in new revenue. In 26, the growth factor was 4%. That got you 224,000. And 00:14:54.969 --> 00:15:03.114 - the 6% in 27 is gonna get you 350,879 in additional revenue in your operations fund. So it's simply 00:15:03.114 --> 00:15:06.046 - how the operations fund levy works. 00:15:06.530 --> 00:15:13.241 - If they don't come back and cap that growth factor, for the next two or three years, it should be around 00:15:13.241 --> 00:15:19.633 - five and a half to six percent again, just if you kind of look at what the non-farm personal income 00:15:19.633 --> 00:15:26.025 - has done in the state, okay? Questions about that? So my takeaways there, the operations fund has a 00:15:26.025 --> 00:15:32.417 - maximum levy, and you guys max out that levy every year as you should, as all schools do. You don't 00:15:32.417 --> 00:15:34.910 - want to leave that money on the table. 00:15:35.426 --> 00:15:41.551 - Okay? So when we're working on your budget, when I think about your total tax rates, I'm going to go 00:15:41.551 --> 00:15:47.676 - back to this slide. In the middle, we've got the debt fund and the operations fund feeding into that 00:15:47.676 --> 00:15:53.923 - gray box. That gray box is your total tax rate. I'm going to first, when we think about your total tax 00:15:53.923 --> 00:16:00.048 - rate, we're going to max out the operations fund tax rate and levy every year because you don't want 00:16:00.048 --> 00:16:04.414 - to leave those dollars on the table. Okay? Brad, I saw your hand go up. 00:16:04.994 --> 00:16:12.945 - Yes. And I think you were that presenter, maybe it was Matt. That's a one year deal, right? The 6% to 00:16:12.945 --> 00:16:21.207 - offset. It's a great question. The SCA one. Is that right, Paul? Yeah. So that's a great question. That's 00:16:21.207 --> 00:16:29.158 - yeah. Make sure I understand. I think yes. What you guys said. Yeah. So that's an interesting. That's 00:16:29.158 --> 00:16:34.302 - an interesting question. Um, so you have to look at it like this. 00:16:34.562 --> 00:16:42.267 - Indiana state statute says there is a formula to calculate the MLGQ. That's in state statute. And the 00:16:42.267 --> 00:16:49.972 - state statute says on my fourth bullet point, the MLGQ is based on the change in the state's six-year 00:16:49.972 --> 00:16:57.601 - rolling average of non-farm personal income. That's a statute, okay? So what they did in 24, 25, and 00:16:57.601 --> 00:17:01.982 - 26 is they came out with a piece of legislation that said 00:17:03.074 --> 00:17:11.072 - for 24 and 25, 24, 25 and 26, the statute, the MLGQ formula still is in statute. We're just not gonna 00:17:11.072 --> 00:17:19.149 - use it. What we're gonna do instead is we're just gonna cap it at 4%. No matter what the formula says, 00:17:19.149 --> 00:17:27.069 - we're gonna cap it at 4%. So what, in 2026, when we were going through legislative session in 26, we 00:17:27.069 --> 00:17:31.774 - kept waiting for a piece of legislation to come out because 00:17:32.354 --> 00:17:39.096 - When they did that, it sunset in 26. That's when that additional piece of language ended. So we're like, 00:17:39.096 --> 00:17:45.645 - okay, so what are they going to do with the MLGQ in 27? And session kept going and session kept going 00:17:45.645 --> 00:17:52.065 - and it was never addressed. So what that means, Brad, is that other statute that was put into place 00:17:52.065 --> 00:17:58.615 - that put the formula aside, it just sunset and it faded into the sunset. And so now, statutorily, the 00:17:58.615 --> 00:18:00.926 - formula just kicks back into place. 00:18:01.698 --> 00:18:09.897 - So what we all need to watch for is in 27 session, do they come back and say, we're going to cap the 00:18:09.897 --> 00:18:18.015 - formula again. So as of right now, our best guess is the formula is in place again. We'll just have 00:18:18.015 --> 00:18:26.620 - to see what they did. I think that's something, this is just my opinion legislatively. We've seen several 00:18:26.620 --> 00:18:31.166 - bills introduced over the last four or five years where 00:18:31.266 --> 00:18:37.701 - It's kind of a one year deal. And then you have to kind of wait and see what are they gonna do in the 00:18:37.701 --> 00:18:44.009 - next session. So it's just always kind of, there's several pieces of legislation out there that are 00:18:44.009 --> 00:18:50.381 - like that, that we're just always watching every session because they have a financial impact on our 00:18:50.381 --> 00:18:56.815 - schools. And this is one of them. Prior to 2023, I've been doing this 19 years. I don't remember them 00:18:56.815 --> 00:19:00.222 - ever messing with that calculation. That was never a, 00:19:01.058 --> 00:19:09.323 - That was never a go-to mechanism in the past to bring down property taxes. That was something new. I 00:19:09.323 --> 00:19:17.753 - never saw that one coming in 23. So I think we have to keep our eye on that. All right. OK. All right. 00:19:17.753 --> 00:19:26.100 - I just put this chart up here. I just want to kind of go through this. This is a snapshot of Edgewood 00:19:26.100 --> 00:19:30.110 - School's historical assessed value tax rates tax 00:19:30.690 --> 00:19:39.489 - Okay. So if we start in 2019, our certified net assessed value was 853 million. And that was a 3.7% 00:19:39.489 --> 00:19:48.551 - increase in AV from from 2018. Remember me saying each one of our funds has its own tax rate, and then 00:19:48.551 --> 00:19:56.734 - we have our total tax rate. Okay. So in 2019, our debt service tax rate was 49 cents. So our 00:19:56.866 --> 00:20:04.164 - Our payments, our debt payments that year warranted a 49 cent tax rate based on the AV. We used to have 00:20:04.164 --> 00:20:11.182 - something called a pension bond fund. You paid all your pension bonds off in 2019. That was about a 00:20:11.182 --> 00:20:18.199 - two penny tax rate and operations was 49 cents. And then you could see the levies below. So I wanna 00:20:18.199 --> 00:20:24.094 - go down to the operations fund to that 4,195,379 to just again drive home the point 00:20:24.514 --> 00:20:32.630 - That was your maximum levy in operations that year. And based on your assessed value, you needed a tax 00:20:32.630 --> 00:20:39.878 - rate of .4914 to raise that amount of tax levy, okay? And I'm gonna dive in a little deeper 00:20:39.878 --> 00:20:47.915 - to the calculation, how net assessed value, tax rate, and tax levies play together when we talk about 00:20:47.915 --> 00:20:53.982 - the calculation, because that's really important when we start talking about 00:20:56.962 --> 00:21:03.599 - And then so you can just see if you go from the right over to, or from the left over to the right, you 00:21:03.599 --> 00:21:10.171 - can see how your net assessed value has increased or the change every year. You can see what your tax 00:21:10.171 --> 00:21:16.743 - rates have done by fund and total. And you can see what your tax levies have done over the years. I'm 00:21:16.743 --> 00:21:23.380 - a numbers guy, so I track things year to year to year. You know, and I'm always looking for trend. I'm 00:21:23.380 --> 00:21:24.926 - looking for the change. 00:21:25.250 --> 00:21:34.076 - Because that starts to tell me your financial story. And that tells me a story as I start to look at 00:21:34.076 --> 00:21:42.901 - that from left to right. Okay? All right. Now, let's get into some math. So, I want to talk a little 00:21:42.901 --> 00:21:51.902 - bit about SEA 1 impact and net assessed value tax rate and tax level. Okay, so let's start at the top. 00:21:53.634 --> 00:22:02.332 - When we take your tax rate, so think back to that previous slide when I said like your operations fund 00:22:02.332 --> 00:22:10.946 - tax rate is 49 cents in 2019. In Indiana, we apply our tax rate, our property tax rate, to every $100 00:22:10.946 --> 00:22:19.476 - of net assessed value. So if we take your net assessed value, divide it by 100, and then we multiply 00:22:19.476 --> 00:22:23.614 - it by the tax rate, that gives us the tax level. 00:22:23.842 --> 00:22:32.479 - levy is more of an actual indicator of the property tax bill to the taxpayer than the tax rate. So I 00:22:32.479 --> 00:22:41.288 - want to say that again. The property tax levy that is spit at is more in line with the actual taxpayer 00:22:41.288 --> 00:22:49.840 - property tax bill than the tax rate. The tax rate is just calculating it's getting to the levy, but 00:22:49.840 --> 00:22:51.550 - the levy's the most 00:22:58.018 --> 00:23:07.406 - levies go up and down, taxpayers are paying more or less, okay? So I'm gonna give you an example in 00:23:07.406 --> 00:23:16.982 - this next, in that next line. In 2026, your total tax rate when we took operations plus debt service, 00:23:16.982 --> 00:23:26.558 - your total property tax rate this year was 1.0398. So $1.0398. Your assessed value was 1,508,248,511. 00:23:27.298 --> 00:23:36.933 - So if I take the $1,508,248,511 and divide it by 100 and I multiply it by that $1,398, I get $15,682,000. 00:23:36.933 --> 00:23:46.024 - That's the math, the calculation in calculating tax limits. The reason this is important and what I 00:23:46.024 --> 00:23:54.750 - want you to start to understand is this in my chart. If tax rate stays flat, which you control, 00:23:55.874 --> 00:24:04.111 - But net assessed value drops, levy drops, revenue to the school district drops. If tax rate stays flat, 00:24:04.111 --> 00:24:12.111 - net assessed value goes up, levy goes up, you get additional dollars, okay? That's important when we 00:24:12.111 --> 00:24:20.428 - start to talk about SEA-1. So in the chart below, I'm just simply showing you that. If a school district 00:24:20.428 --> 00:24:25.022 - has an AV of a billion, they have a tax rate of a dollar, 00:24:25.250 --> 00:24:34.176 - they're going to net 10 million in revenue. If a school district has 1.1 billion in AV and a tax rate 00:24:34.176 --> 00:24:43.014 - of a dollar, they're going to net 11 million in revenue. However, if the assessed value goes down to 00:24:43.014 --> 00:24:51.764 - 900,000, tax rate stays at a dollar, we bring in less lead. The last slide, the last row there says 00:24:51.764 --> 00:24:54.302 - that if AV drops to 900,000, 00:24:54.978 --> 00:25:02.774 - $900 million, the tax rate has to go up to $1.11 to collect just the same amount of revenue. 00:25:02.774 --> 00:25:11.324 - Not more revenue, just the same. The reason this is important is that moving forward, there is a good 00:25:11.324 --> 00:25:20.126 - chance that your assessed value declines. Your assessed value here has not declined in many, many years. 00:25:28.802 --> 00:25:35.645 - but that's the impact of Senate Bill 1. But as we move forward and talk strategy about tax rate and 00:25:35.645 --> 00:25:42.489 - tax levy here, which we've had a lot of conversations with this board over the years about tax rate 00:25:42.489 --> 00:25:49.811 - and tax levy, multiple conversations, the game's a little different now because AVs could start to decline 00:25:49.811 --> 00:25:56.860 - and you guys can't necessarily afford to have revenue decline with them. So that means tax rates could 00:25:56.860 --> 00:25:57.886 - start to go up 00:25:58.626 --> 00:26:05.515 - to not necessarily get you more money to get you the same amount of money. That's the key to managing 00:26:05.515 --> 00:26:12.269 - this moving forward, okay? And remember, I'm going to say this several times, the property tax levy 00:26:12.269 --> 00:26:19.158 - is what tracks more with what your taxpayers are paying, not the rate. So I drive that home to say in 00:26:19.158 --> 00:26:25.979 - that last example, just because the tax rate went up to $1.11, the taxpayer in that situation didn't 00:26:25.979 --> 00:26:27.870 - pay anymore. It's the same. 00:26:33.954 --> 00:26:40.913 - to clarify the 15 million that we're collecting for our tax. That's to pay our debt service and our 00:26:40.913 --> 00:26:47.942 - operations fund. Yes sir. Okay. That 15 six is a combination of debt levy and operations levy. Okay. 00:26:47.942 --> 00:26:54.971 - As far as timing is concerned, this is where I was getting confused. When do we get, when do we know 00:26:54.971 --> 00:27:01.374 - our assessed value? Is it before we have to know it before we do our final tax rate, right? 00:27:01.634 --> 00:27:09.330 - That's the way it should be. But is it though, is the question. Great question. Statutorily, we're supposed 00:27:09.330 --> 00:27:16.456 - to know our assessed value by August 1st. That doesn't typically happen. There have been some years 00:27:16.456 --> 00:27:23.867 - that we've gotten them by August 1st. In the last few years, it's come in sometime in August. So that's 00:27:23.867 --> 00:27:30.494 - normally when we would know our assessed value. And when we're talking August and September, 00:27:30.786 --> 00:27:37.229 - You guys are in the budgeting process at that time. I mean, you started the budgeting process in June 00:27:37.229 --> 00:27:43.797 - and July. You're starting to make the forms. You're working through the process. You have to adopt your 00:27:43.797 --> 00:27:50.493 - budget by November 1. So you've typically had your adoption in October. You had the hearing in September. 00:27:50.493 --> 00:27:56.935 - And so hopefully, but you have to advertise for the hearing 10 days before the hearing. So it kind of 00:27:56.935 --> 00:28:00.030 - lines up about the time you're going through all 00:28:00.194 --> 00:28:06.789 - process. So sometimes we're making our budgets based on an estimated assessed value because we just 00:28:06.789 --> 00:28:13.583 - don't know. So we could be blindsided. You could. You could. And there's some we have some. Yeah. Yes. 00:28:13.583 --> 00:28:20.376 - And so, you know, there's some things in place for those of us that have been doing budgets for a very 00:28:20.376 --> 00:28:27.169 - long time. You know, there's some tips and tricks that we always put in place to make sure that we can 00:28:27.169 --> 00:28:29.214 - maximize your revenues that we 00:28:29.314 --> 00:28:36.940 - Yes, we might get blindsided, but we try to build things into that process so that we can still maximize 00:28:36.940 --> 00:28:44.276 - our windows. Good questions. Okay. All right. Property tax caps. Let's talk a little bit about that. 00:28:44.276 --> 00:28:51.975 - Not a new word for you guys, just to kind of go back over this, because when I start talking about Senate 00:28:51.975 --> 00:28:58.366 - Bill 1, I don't want to lose sight of what I call traditional property taxes, tax caps. 00:28:58.882 --> 00:29:06.070 - Property tax caps, just a little history lesson, put into place 2010. We voted them into the Constitution, 00:29:06.070 --> 00:29:13.190 - so they're not going away at this point. And they put a cap on the amount of property tax that a property 00:29:13.190 --> 00:29:19.908 - owner pays. It's a percentage of the assessed value. Puts a ceiling, okay? The cap is calculated as 00:29:19.908 --> 00:29:25.886 - one, two, and three percent based on a residential, farm ground, or commercial property. 00:29:26.882 --> 00:29:34.112 - If somebody is at their property tax cap, but the governmental entity does their budget. So let's say 00:29:34.112 --> 00:29:40.917 - you guys do your budget and you apply the tax rate to every parcel, every piece of farm ground, 00:29:40.917 --> 00:29:48.360 - every home, every business. And let's say that I live in your district and I have a home and my property 00:29:48.360 --> 00:29:53.534 - tax cap is $2,000 on my house. That's 1% of my assessed value is $2,000. 00:29:54.146 --> 00:30:01.753 - I get my property tax bill, and I'm paying for you guys, and I'm paying for Ellisville town, I'm paying 00:30:01.753 --> 00:30:09.141 - the library, I'm paying all these property tax rates. And let's say my bill says I owe $2,500. If my 00:30:09.141 --> 00:30:16.748 - cap is $2,000, I only pay $2,000. I don't pay $2,500. So I want you to think about that. Where you lose 00:30:16.748 --> 00:30:19.454 - those dollars are in your operations 00:30:20.194 --> 00:30:27.061 - Because you are only levy the taxpayer and the operations fund for your maximum tax levy. But if I only 00:30:27.061 --> 00:30:33.928 - pay 2,000 and not 2,500, there's some money that you statutorily could get in your operations fund that 00:30:33.928 --> 00:30:40.597 - I'm not paying. Because if my tax bill says 2,500 and your operations fund tax levy was part of that 00:30:40.597 --> 00:30:47.134 - 2,500, I only pay 2,000. So you're not getting some money in your operations fund because of that. 00:30:47.426 --> 00:30:55.389 - That's called circuit breaker or property tax cap revenue loss. It's property tax revenue that you're 00:30:55.389 --> 00:31:03.274 - simply not receiving, mainly in your operations fund, okay? And I just kind of show you up here your 00:31:03.274 --> 00:31:11.550 - DLGF estimates of what 25 and 26 are. In debt service, in 25 it was 58,000, in operations it was 146,000. 00:31:12.450 --> 00:31:20.498 - If I go back to that maximum levy that you levy the taxpayer for in 25 and operations, you didn't collect 00:31:20.498 --> 00:31:28.167 - 146,000 of that. In 26, you did, you're probably not gonna collect about 111,000 and those are state 00:31:28.167 --> 00:31:36.063 - DLGF estimates, okay? And so we gotta take that revenue off the top when we're doing your budget, okay? 00:31:36.063 --> 00:31:41.150 - Chad, I've had people ask about bullet three. I think some of the, 00:31:41.890 --> 00:31:48.617 - taxpayers get confused on gross assessed value. That's prior to their standard homestead exemption and 00:31:48.617 --> 00:31:54.756 - all that, correct? They're always thinking, they think it's the cap is on that bottom number. 00:31:54.756 --> 00:32:01.483 - It's on the top, okay. It's really, we don't use gross assessed value much in school finance, but when 00:32:01.483 --> 00:32:07.230 - we're calculating your tax cap, gross assessed value is one of the two times we use it. 00:32:07.650 --> 00:32:15.371 - Got it. And remember, gross assessed value in Indiana is market. The system is market based, meaning 00:32:15.371 --> 00:32:23.474 - that our county assessors are supposed to be trending the gross assessed value of property to the market. 00:32:23.474 --> 00:32:31.271 - Your gross assessed value should be somewhat in line with what you would put your house on the market 00:32:31.271 --> 00:32:35.934 - for today. Fifteen ish plus years ago, that wasn't the case. 00:32:37.026 --> 00:32:43.329 - That wasn't the case. But it is supposed to be trended. It is supposed to be in line with the market 00:32:43.329 --> 00:32:49.757 - and trend with that. Then off of the gross in Indiana, and I'm going to get more into this in a little 00:32:49.757 --> 00:32:56.185 - bit, we have deductions that bring us down to our net. The net is the taxable value. But Brad's right. 00:32:56.185 --> 00:33:02.614 - The property tax cap is a percentage of your gross assessed value, which is on your tax bill. Your tax 00:33:02.614 --> 00:33:06.046 - bill tells you your gross and your net assessed value. 00:33:06.946 --> 00:33:15.350 - and I can see the dollar amounts of our cap loss, but I have no idea what to compare that to. How do 00:33:15.350 --> 00:33:23.754 - we compare to the other corporations you work with? Are we getting killed by that? I don't know. Let 00:33:23.754 --> 00:33:32.075 - me look here. I thought I put in a percentage. I think I have in here, so how I look at that, Brad, 00:33:32.075 --> 00:33:34.238 - is I look at that 111,000 00:33:34.818 --> 00:33:42.494 - what percentage is that loss of your total operations fund tax levy? While that's a large dollar amount 00:33:42.494 --> 00:33:50.096 - as a percentage, honestly, it's not that big of a percentage. When I say a large percentage, I'm gonna 00:33:50.096 --> 00:33:57.477 - use the example in my previous life, I was a CFO of Franklin Township Schools. Our property tax cap 00:33:57.477 --> 00:34:01.758 - loss every year, and they still have this amount of loss, 00:34:02.210 --> 00:34:11.623 - was around 45 to 50% of our max levy. So our max levy was in the 15 million range. We didn't receive 00:34:11.623 --> 00:34:20.756 - 50% of it. Whereas your max levy, if I go back, in 26, is 5,845, and you're not receiving 146,000 00:34:20.756 --> 00:34:30.169 - of it. As a percentage, it's a couple percent. It hurts, I'm not gonna say it doesn't hurt, but it's 00:34:30.169 --> 00:34:32.126 - a manageable amount. 00:34:32.802 --> 00:34:41.057 - So we have several districts losing well above 20% of their levy to circuit breaker loss. So I hate 00:34:41.057 --> 00:34:49.312 - to lose any, but actually that's a decent number. If I gotta lose a number, I'm okay with that one. 00:34:49.312 --> 00:34:58.558 - What is going right for that number to be low versus being in a situation like Franklin Township that's insane? 00:35:00.418 --> 00:35:07.778 - So there are several things that drive property tax cap loss. Here's what you have to understand is 00:35:07.778 --> 00:35:15.358 - the base to how this works. You guys are not the only taxing entity, right? And so when I drive around 00:35:15.358 --> 00:35:23.454 - and I look at every one of your properties on my way in and I see all your houses, I see a bucket of property 00:35:27.490 --> 00:35:34.363 - And since it's capped, there's only so much revenue you can get from them. But that property tax, 00:35:34.363 --> 00:35:41.517 - that bucket, you know, like when I go back to saying, I pay, my cap was $2,000. I'm paying part of my 00:35:41.517 --> 00:35:48.531 - $2,000 to Edgewood Schools. I'm paying part to Ellitsville Town. I'm paying part to the library. So 00:35:48.531 --> 00:35:54.142 - everybody fills the bucket up, right? So one thing that we see that's different 00:35:54.338 --> 00:36:01.924 - is that when all your constituents that live within a town, they're paying multiple tax rates. There 00:36:01.924 --> 00:36:09.436 - might be a library, there might be a county tax, a school tax, multiple taxes. When you go out into 00:36:09.436 --> 00:36:17.022 - your outlying districts, they typically aren't paying a town tax. They might not be paying a library 00:36:17.022 --> 00:36:24.158 - tax. A lot about in your outlying areas, you're paying city and county tax. It may be a, yeah. 00:36:24.642 --> 00:36:32.355 - So a couple things that we see, if you have a school tax rate and levy that's high, and you have a town 00:36:32.355 --> 00:36:39.772 - tax rate and levy that's high, that fills the bucket up quicker. Well, as the bucket fills up, more 00:36:39.772 --> 00:36:47.485 - circuit breaker loss. You see what I mean? So one thing is when you have more overlapping taxing units, 00:36:47.485 --> 00:36:52.158 - and the overlapping taxing units have high tax rates and levy, 00:36:52.706 --> 00:37:02.247 - that fills the bucket up quicker, that makes property tax cap loss go up faster. Franklin Township is 00:37:02.247 --> 00:37:11.976 - unique in that in Marion County, outside the donut, Franklin Township is about 95% homes. It's all corn 00:37:11.976 --> 00:37:22.078 - fields that are now subdivisions. They're all capped at 1%. There's no businesses. So that's the other way. 00:37:22.754 --> 00:37:29.174 - You guys have some businesses that are capped at 3%. You still have some farm ground. You have some 00:37:29.174 --> 00:37:35.787 - rental properties. And rental properties and farm ground are at 2%. And then you have homes. I haven't 00:37:35.787 --> 00:37:42.464 - seen the exact makeup of your assessed value. I'm going to say your AV is a good mix of homes, 1%. Farm 00:37:42.464 --> 00:37:48.885 - ground or rental is 2% and commercial 3%. When you have a balanced assessed value like that, that's 00:37:48.885 --> 00:37:51.838 - when we see circuit breaker loss pretty well. 00:37:52.866 --> 00:38:02.510 - It's when you get into that other situations or heavy residential, high tax rates, circuit breaker loss 00:38:02.510 --> 00:38:11.968 - goes up. So who keeps track of thinking about that bucket? Who keeps track of, let's say in our area, 00:38:11.968 --> 00:38:21.982 - how many of those households or how many of those commercial properties, we are taxing them to their cap or 00:38:22.178 --> 00:38:29.546 - how many were leaving, not that I want to get into that window, but how many are we leaving a window 00:38:29.546 --> 00:38:37.132 - there for? Now you're thinking circuit breaker law strategy, that's right. So you guys have in the past 00:38:37.132 --> 00:38:44.791 - engaged with policy analytics and they are the ones, in my opinion, they are the organization in Indiana 00:38:44.791 --> 00:38:49.022 - and you guys have had an agreement with them before where 00:38:49.282 --> 00:38:56.391 - they actually have a model that they do a parcel by parcel analysis. And they are able to tell a school 00:38:56.391 --> 00:39:03.569 - district or a city or a town exactly what you asked. How many of your taxpayers are at the cap and where 00:39:03.569 --> 00:39:10.610 - are they? And typically, like I said, you would see, and I would probably say the same thing here, the 00:39:10.610 --> 00:39:17.445 - majority, probably the majority of that circuit breaker loss is within the town of Elizabeth, would 00:39:17.445 --> 00:39:18.334 - be my guess. 00:39:19.330 --> 00:39:26.722 - and then you're gonna have very little. So most of those, not most, but more of those people are at 00:39:26.722 --> 00:39:34.261 - their cap. Your people that are outside of Ellitsville town, I would say probably none of them are at 00:39:34.261 --> 00:39:41.727 - their cap. But there really, there's not really a good place to like go onto a website to find that. 00:39:41.727 --> 00:39:48.158 - You gotta have somebody like Paul Zanalytics do that. With the reorganization passing, 00:39:48.546 --> 00:39:55.625 - yesterday. They are you got we got a report. If the past we don't pass what's passed out that's going 00:39:55.625 --> 00:40:02.565 - to affect that bucket too. Cuz they're going to pull the ball pull from Peter else over the ball. I 00:40:02.565 --> 00:40:09.574 - was reading a little bit about that and there was a fiscal analysis done and it sounds like here but 00:40:09.574 --> 00:40:17.278 - the numbers were wrong though Jerry right we the numbers that should the town user we use are different. Right 00:40:19.330 --> 00:40:36.875 - That scared me. That's when we had our second board. Right. We shared the board. That was about 350, 00:40:36.875 --> 00:40:48.862 - 350,000, something like that. Yeah, and then 2030 it levels off. OK. 00:40:49.506 --> 00:40:55.520 - Okay. So meaning that the circuit breaker for us is going to increase by about 350,000 because we're 00:40:55.520 --> 00:41:01.654 - going to have more people getting additional taxes, meaning that the property tax cap is going to come 00:41:01.654 --> 00:41:07.787 - in to play there. Okay. Between Richland and Eltsville. Right. And then beam blossoms affected because 00:41:07.787 --> 00:41:13.742 - of the fire district change, correct? My tax rate is going to change to beam blossoms because we're 00:41:13.742 --> 00:41:16.958 - now part of Monroe County Fire and yours works there. 00:41:17.538 --> 00:41:24.122 - So in this, did the town of Ellitsville expand boundaries? Is that essentially what happened? So back 00:41:24.122 --> 00:41:30.705 - to my original point, yes. I think probably what's going to happen is that additional circuit breaker 00:41:30.705 --> 00:41:37.418 - loss that we need to take a look at. As the town of Ellitsville, I'm assuming, expanded its boundaries, 00:41:37.418 --> 00:41:44.131 - now you're going to have people that weren't paying town tax now that are now paying town tax. It could 00:41:44.131 --> 00:41:47.358 - cause them to go up to their circuit breaker cap. 00:41:47.586 --> 00:41:55.699 - Okay. Yes. Just mathematically, I'm thinking through my mind. That's probably what is going to happen. 00:41:55.699 --> 00:42:03.577 - But the trade off there is that yes, you have more loss because of some increase in assessed value, 00:42:03.577 --> 00:42:11.454 - assessed value. Total tax collected because they're now paying the town tax. So we get nothing from 00:42:11.454 --> 00:42:16.574 - Richland Township as of right now. Well, as of yesterday, no, we 00:42:16.802 --> 00:42:24.638 - We still. But how does it change what we are getting it won't change ours. It'll help. It'll help the 00:42:24.638 --> 00:42:32.474 - tap. Yeah. We just now the objective. Yeah. And actually their AV is going to go up. You were already 00:42:32.474 --> 00:42:40.157 - you there. That township was already in your A.D. Ultimately in my opinion I haven't read the whole 00:42:40.157 --> 00:42:43.998 - doc. Right. It's probably going to help the town. 00:42:44.194 --> 00:42:50.930 - because they're not going to expand. Their AV's gonna go up. And their tax rate may decrease. 00:42:50.930 --> 00:42:58.454 - To start with, the existing town boundaries is going to be an urban district, and the rest of it's gonna 00:42:58.454 --> 00:43:05.692 - be an urban district, or a rural district. So the town district will have a different tax rate and a 00:43:05.692 --> 00:43:11.998 - higher tax rate. So with the increase in the tax rate, that's where we're going to have 00:43:12.578 --> 00:43:22.049 - more hit the circuit breaker because of that. They at some point will expand the boundaries and that's 00:43:22.049 --> 00:43:31.335 - what I debated with him over on. That makes sense. As a resident of Ritalin Township, so I won't get 00:43:31.335 --> 00:43:40.990 - into that. But yeah, so there can be changes down the road, but we don't know what those will look like. 00:43:41.314 --> 00:43:47.377 - Is it the best thing to say? Yep. Definitely something to keep our eye on. So my point to this slide, 00:43:47.377 --> 00:43:53.380 - you guys have been dealing with circuit breaker laws going back to 2010. This isn't anything new for 00:43:53.380 --> 00:43:59.384 - you, but I just wanted to drive the point home in SCA 1 when I start talking about it. This is still 00:43:59.384 --> 00:44:05.625 - there. Like this $111,000 doesn't go away. Like we're still going to continue to deal with that. Nothing 00:44:05.625 --> 00:44:09.726 - with traditional circuit breaker changed with Senate Bill 1. OK? OK. 00:44:09.986 --> 00:44:17.182 - So let's start to get into a little bit about Senate Bill 1. The first thing I want to talk about is 00:44:17.182 --> 00:44:24.377 - the change in assessed values. So when I said potentially assessed values could decline, here's why. 00:44:24.377 --> 00:44:32.000 - Let's first talk about the 1% properties. What Senate Bill 1 does, it's a six year phase in on residential 00:44:32.000 --> 00:44:38.270 - properties. Starting in 2026, net assessed values, remember what I talked about before, 00:44:38.466 --> 00:44:46.489 - You have your gross assessed value and then your net. Well, what brings our gross down to our net are 00:44:46.489 --> 00:44:54.669 - deductions. Deductions are state statute driven deductions, okay? The net assessed value is our taxable 00:44:54.669 --> 00:45:02.770 - value. What Senate Bill 1 does is it takes the deductions starting in 26 and it grows them every year, 00:45:02.770 --> 00:45:04.894 - okay? So think about that. 00:45:05.442 --> 00:45:12.808 - The gross assessed value is going to trend with the market just like it has. That doesn't change. But 00:45:12.808 --> 00:45:20.031 - the deductions are going to get bigger and 26, bigger deductions. 27, bigger deductions. 28, bigger 00:45:20.031 --> 00:45:27.686 - deductions. So as the deductions get bigger, it could start to drive down the net or the taxable assessed 00:45:27.686 --> 00:45:32.958 - value of the home. Okay? Does that make sense how that's going to trend? 00:45:33.186 --> 00:45:41.464 - It's a six-year phase. So right now, as of 2025, let me go back, as of 2025, because of the deductions, 00:45:41.464 --> 00:45:49.582 - our net assessed value was about two-thirds of the gross assessed value because of the 25, because of 00:45:49.582 --> 00:45:57.701 - deductions that were placed in 25. That means our taxable value was about two-thirds of the gross. As 00:45:57.701 --> 00:46:02.238 - Senate bill starts to get implemented, the end result is 00:46:02.402 --> 00:46:09.373 - that our net assessed values go down to one-third of our gross. So that means now we're only paying 00:46:09.373 --> 00:46:16.344 - taxes on one-third of the gross assessed value, whereas in 25 we were paying taxes on two-thirds of 00:46:16.344 --> 00:46:23.524 - the value. See what I mean? And so the deductions get bigger by about two to three percent every year. 00:46:23.524 --> 00:46:29.310 - And at the end of the six years, it adds up to about 33 percent in new deductions. 00:46:30.658 --> 00:46:38.724 - So that could, over the years, start to drive down your net assessed value. Where you've seen growth 00:46:38.724 --> 00:46:46.710 - in the past, we could start to see a decline. So go back to my slide about tax rate. Tax rate could 00:46:46.710 --> 00:46:54.935 - have to go up to just net the same amount of revenue. We also have our 2% properties. I call those the 00:46:54.935 --> 00:47:00.126 - non-homestead and farmland properties. The non-homestead are our 00:47:00.258 --> 00:47:08.200 - rental properties. They fall into the 2% bucket. They have a 2% cap on their AV. And then farm ground 00:47:08.200 --> 00:47:16.453 - has a 2% property tax cap. Well, what's interesting with these two classification or these two properties 00:47:16.453 --> 00:47:24.316 - is that in the past, they didn't have deductions. Their gross assessed value was equal to their net. 00:47:24.316 --> 00:47:27.742 - Okay, so farmers and rental property owners 00:47:28.226 --> 00:47:36.832 - their taxable value was the same as the gross. Net and gross the same. Senate Bill 1, what it does for 00:47:36.832 --> 00:47:45.187 - them, puts deductions in place. So starting in 2026, our farmers and our rental property owners get 00:47:45.187 --> 00:47:53.541 - a deduction. So now they have a net assessed value. At the end of the six-year implementation, they 00:47:53.541 --> 00:47:57.886 - go from their taxable value being 100% of the gross 00:47:58.466 --> 00:48:05.703 - to two-thirds of the gross. So they're gonna get a one-third or a 33% increase in deductions over the 00:48:05.703 --> 00:48:12.939 - next six years. That's gonna bring down your net assessed value, okay? The next piece of property are 00:48:12.939 --> 00:48:20.176 - the commercial property. Impacts commercial property a little bit differently, I'm just gonna quickly 00:48:20.176 --> 00:48:26.206 - summarize it. Part of your net assessed value when it comes to a commercial property 00:48:26.402 --> 00:48:34.053 - is what we call business personal property. To use a simplistic example, I own a factory and inside 00:48:34.053 --> 00:48:41.856 - that factory is a forklift and a bunch of conveyor belts and machines and desks and chairs and all of 00:48:41.856 --> 00:48:49.584 - that. That's all business personal property. If I'm a business owner and I buy a forklift or a front 00:48:49.584 --> 00:48:54.174 - end loader, when I buy that, there's a IRS tax table that I 00:48:54.466 --> 00:49:04.440 - that I reduce the taxable value of. I depreciate is the term that we use. That business personal property, 00:49:04.440 --> 00:49:14.600 - they pay property tax on. And that's part of your net assessed value. Moving forward, any piece of equipment 00:49:14.600 --> 00:49:22.430 - purchased that is $2 million or less, they don't pay any property tax on it at all. 00:49:24.354 --> 00:49:32.529 - Okay. The other thing that happens is we used to depreciate property down to a 30% of its original purchase 00:49:32.529 --> 00:49:40.174 - price. That goes away and now we can depreciate it down to zero. So what that means is if I've got a 00:49:40.174 --> 00:49:47.744 - piece of equipment that I've had in place for five or six years, I've been deducting it. And before 00:49:47.744 --> 00:49:53.118 - SEA-1, once it got down to 30%, I continued to pay property tax on 30% 00:49:53.314 --> 00:49:59.634 - of the original purchase value. Starting in January 1 of 26, if I buy that piece of equipment, I get 00:49:59.634 --> 00:50:05.955 - rid of the old one and I buy a brand new one, I depreciate it down to zero and I pay no property tax 00:50:05.955 --> 00:50:12.463 - on it. That's going to drive down your net assessed values. So that's how every one of these properties 00:50:12.463 --> 00:50:18.971 - are getting these deductions in place that are going to start to drive down their taxable values, which 00:50:18.971 --> 00:50:21.662 - drives down your net assessed value, okay? 00:50:22.402 --> 00:50:30.155 - And again, I just want to go back to you recalling tax rate, tax levy, net assessed value. This slide 00:50:30.155 --> 00:50:37.984 - kind of like the one I had before. So in that bottom line, where this, in this example, the AV dropped 00:50:37.984 --> 00:50:45.965 - from a billion down to 900,000, that's a potential result of SEA 1 moving forward. Your AV grew by 1.25% 00:50:45.965 --> 00:50:51.742 - in 27, but the last several years, it's grown substantially more than that. 00:50:52.034 --> 00:50:58.427 - And so I think we starting to see, by it only growing a little over percent this year, the impact of 00:50:58.427 --> 00:51:04.819 - Senate Bill 1. We have several schools that had declining AV in 26. We had several schools that grew 00:51:04.819 --> 00:51:11.402 - by seven or 8%. But I think as these new deductions start to get into place, we're gonna have to really 00:51:11.402 --> 00:51:17.984 - keep an eye on your AV as we move forward, okay? Declining AV, I wanna drive this point home. Declining 00:51:17.984 --> 00:51:21.022 - AV does not necessarily mean declining revenue. 00:51:22.018 --> 00:51:29.320 - It doesn't mean your revenue is going down because a visa. It's the tax rate and the tax levy that we 00:51:29.320 --> 00:51:36.479 - have to play with. Okay. Um, so this is just kind of a prime example. I'm showing you an example of 00:51:36.479 --> 00:51:43.709 - if I've got a gross assessed value home in 2025, the standard deduction was 48,000 brings me down to 00:51:43.709 --> 00:51:50.581 - my net, but I also got a supplemental deduction of 37%. So my net assessed value on my $250,000 00:51:50.581 --> 00:51:51.870 - home was 126,000. 00:51:52.130 --> 00:51:59.511 - I paid taxes in 25 on the 126. That was on your net assessed value. Same gross assessed value. Let's 00:51:59.511 --> 00:52:07.111 - say the gross assessed value doesn't change. Here's what the two middle columns are SEA 1. The standard 00:52:07.111 --> 00:52:14.638 - deduction starts to phase out. Well, the standard deduction was $1. It was $48,000, $48,000 this year. 00:52:14.638 --> 00:52:21.726 - But then in 2031, the standard deduction goes down to nothing. It's gone. It's still in statute. 00:52:22.242 --> 00:52:31.259 - But it's down to zero. But look what happened to the supplemental deduction. It goes up 33%. Well, let's 00:52:31.259 --> 00:52:39.933 - think about the math in this. Now that my deductions are based on a percentage, what does that mean? 00:52:39.933 --> 00:52:48.778 - If my home is a $600,000 home, now I'm getting a 66% deduction off of $600,000. My deduction's a whole 00:52:48.778 --> 00:52:50.238 - lot bigger on my 00:52:51.938 --> 00:53:01.792 - than if I have a 250,000 home property. So what we're starting to see is our areas that have higher 00:53:01.792 --> 00:53:12.041 - priced homes on average, those homes are getting a much larger deduction, bringing their taxable values 00:53:12.041 --> 00:53:20.318 - down much lower. So we're shifting from a dollar to a percentage in all deductions. 00:53:23.330 --> 00:53:32.714 - Debt service tax rate. Starting in, this is part of SCA 1, starting in 2026, any school district with 00:53:32.714 --> 00:53:42.190 - a property, a debt service only property tax rate over 70 cents, any bond issue they do moving forward 00:53:42.190 --> 00:53:48.446 - must go on the ballot. There's no option. I'm gonna say that again. 00:53:54.306 --> 00:54:02.999 - It doesn't matter if it's a $100,000 bond issue or a $75 million bond issue. You can't issue the debt 00:54:02.999 --> 00:54:11.607 - without it going on the map. In 2026, your debt service tax rate was 0.6522. Moving forward, this is 00:54:11.607 --> 00:54:20.301 - going to have to be a guideline and a conversation for your school district. And remember what I said 00:54:20.301 --> 00:54:23.710 - before, AB goes down, tax rate goes up. 00:54:38.338 --> 00:54:45.403 - Starting in 2026, this is the other biggie for you guys. Starting in 2026, every homeowner is receiving 00:54:45.403 --> 00:54:52.265 - a dollar for dollar credit on their tax bill. So you can go in the night and take a look at your tax 00:54:52.265 --> 00:54:59.262 - bill. There's a new line on our tax bill that says homestead credit. Here's what this is. This is only 00:54:59.262 --> 00:55:06.260 - for our 1% residential properties. You get a dollar for dollar credit that is the lesser of 10% of the 00:55:06.260 --> 00:55:08.094 - total tax bill up to $300. 00:55:08.962 --> 00:55:17.041 - So let's go back to my original example. I have a 2,000. My property tax bill is $2,000. I fall into 00:55:17.041 --> 00:55:25.440 - the 10% category. My tax bill is 2,000. I'm going to get a 10% credit off of that. Now I only pay 1,800. 00:55:25.440 --> 00:55:33.599 - It caps out of the $300 credit. Now remember, originally my tax bill was 2,500, but I only paid 2,000 00:55:33.599 --> 00:55:37.918 - because of the property tax cap. Well guess now what? 00:55:38.146 --> 00:55:45.849 - Now I get another $200 off. That is basically mathematically increased circuit breaker loss. It's not 00:55:45.849 --> 00:55:53.628 - circuit breaker, but it's, hypothetically, it's increased circuit breaker loss for a governmental list 00:55:53.628 --> 00:56:01.784 - because now I only pay each month. You're losing on that $200, you're leasing more money in your operations 00:56:01.784 --> 00:56:05.182 - fund because of this homestead credit, okay? 00:56:05.570 --> 00:56:15.705 - 2026, the DLGF estimate for you is 741,435. When we add up all the $200, your revenue, your, so go back 00:56:15.705 --> 00:56:25.548 - to that maximum levy in the operations fund, you're not collecting the 111,000 from Circuit Breaker, 00:56:25.548 --> 00:56:33.150 - but then you're probably also not collecting 741,435 from the new home state. 00:56:35.394 --> 00:56:44.517 - So now we're up to, what, almost a million dollars that you're not collecting of the maximum lending. 00:56:44.517 --> 00:56:53.461 - So I think this is a piece of legislation we have to keep our eye on because the 10% or $300, in my 00:56:53.461 --> 00:57:02.942 - conspiracy theory, could be tweaked. Statutorily, it could be raised to $500. It could be raised to $700. 00:57:04.450 --> 00:57:13.383 - And if that happens, that makes that 741 bigger, but it gives property tax relief. That's the biggie 00:57:13.383 --> 00:57:22.404 - for you guys. We have to decide moving forward, as does every school, can our current operations fund 00:57:22.404 --> 00:57:31.602 - budget handle losing another $742,000 in revenue? If not, that's where we've got to start making budget 00:57:31.602 --> 00:57:34.078 - adjustments, because again, 00:57:34.850 --> 00:57:41.413 - get this expenses back in line with the record. So I think what we have to do is, in my opinion, our 00:57:41.413 --> 00:57:48.172 - December tax collection, when we get that, what we have to do is we have to take our max, our levy that 00:57:48.172 --> 00:57:54.800 - we levy, and we've got to look at what did we not collect in the whole calendar year to see how close 00:57:54.800 --> 00:58:01.429 - we are to this $741,000. That's the state estimate for you is $741,000. It could be more, it could be 00:58:01.429 --> 00:58:04.158 - less. And I think that's our new baseline 00:58:10.210 --> 00:58:20.265 - That's already been factored in. Well, yes, the $741,000 is a revenue loss. So yes, as the levy goes 00:58:20.265 --> 00:58:30.718 - up 6%, you're going to lose the $740,000 of that. That number's somewhat fixed, Brad. The $740,000 isn't 00:58:30.718 --> 00:58:38.782 - going to vary much over the years unless we have some new subdivisions going on. 00:58:39.810 --> 00:58:46.967 - new subdivisions mean new homes, which mean new credits. So I know you guys have some subdivisions going 00:58:46.967 --> 00:58:53.919 - in. At some point when those are fully assessed, they're going to start getting a 10% or $300 credit. 00:58:53.919 --> 00:59:01.008 - And what's crazy about this, every county in the state, it all depends on the assessor. Honestly. Yeah. 00:59:01.008 --> 00:59:05.438 - I mean, there's no checks and balances between county to county. 00:59:19.490 --> 00:59:26.730 - Not yet. They are only state funded for education funds, so they are only getting the per pupil. What 00:59:26.730 --> 00:59:34.467 - do they do for operations fund? So a couple different things. I'm not sure that you guys meet the threshold, 00:59:34.467 --> 00:59:41.778 - but there is a threshold in place that if you're losing X amount of your kids to the charter, then you 00:59:41.778 --> 00:59:47.102 - have to actually start giving some of your operations fund to the charter. 00:59:47.970 --> 00:59:56.295 - I don't think you guys, I'll double check that tomorrow. I don't think you guys are in that bucket. 00:59:56.295 --> 01:00:04.702 - We're close. We're close, aren't we? I'll connect with Jerry and Debbie and Paul. We'll do some math 01:00:04.702 --> 01:00:13.526 - on that just to make sure. Maybe you guys are getting there. So starting in 2029 or 2030, the new statute 01:00:13.526 --> 01:00:15.774 - kicks in that I think it's 01:00:16.226 --> 01:00:23.176 - the lesser of 100 kids or a certain percentage of your ADM, if they're attending a charter school in 01:00:23.176 --> 01:00:30.127 - 29 or 30, you have to start sharing your operations fund levy with the charter. So where do they, if 01:00:30.127 --> 01:00:37.077 - they don't have that till 20, 29, where, what extra bucket do they have? They have to pay for it out 01:00:37.077 --> 01:00:44.097 - of their state tuition support. They can't, as of today, a charter school, public charter cannot levy 01:00:44.097 --> 01:00:45.886 - property tax as of today. 01:00:47.490 --> 01:00:54.187 - Does that answer your question? Yeah. Yeah. Yeah. As of today? And as of today, if we went above 0.7 01:00:54.187 --> 01:01:00.884 - on the debt service and we get a vote, that vote doesn't apply to the charter school, right? No. OK. 01:01:00.884 --> 01:01:07.648 - That's just us. But operate referendums would. Yes. OK. Same. Yes. If you're above the charter school 01:01:07.648 --> 01:01:14.544 - threshold, that threshold again, you have to share operating referendum dollars with the charter school 01:01:14.544 --> 01:01:15.870 - as well. All right. 01:01:17.250 --> 01:01:25.673 - Those are all new things that I think we all have to keep our eye on that I feel are going to get extinct. 01:01:25.673 --> 01:01:34.174 - All right. Is your $741,000 loss there, is that pretty up to date? That's off the most recent DLGF estimate 01:01:34.174 --> 01:01:42.203 - that came out about three months ago. OK, because the 1782 notice talks about 1.4 million, and that's 01:01:42.203 --> 01:01:44.958 - the number I had in the projection 01:01:45.634 --> 01:01:54.516 - But the 1.4 million does include the 100 million. It does. Yes, it does. Yes, it does. Yes. But it's 01:01:54.516 --> 01:02:03.398 - still significantly higher than the 75 million. I'm anxious to get the second this year's 78 million 01:02:03.398 --> 01:02:12.455 - to see how that plays out in the second year. That's a big number. If it's 1.4 million, we've got some 01:02:12.455 --> 01:02:14.302 - talk in front of us. 01:02:15.522 --> 01:02:25.237 - But you went in intentionally conservatively. And so if it turns out to be 741, that's good for us. 01:02:25.237 --> 01:02:34.952 - Well, I'd take that. Well, yeah. I like Chad's number better. Yeah. Tell me why yours is 1.4. Well, 01:02:34.952 --> 01:02:44.958 - the 1782 notice that you get after your budget, it's in here. It shows your projected revenue or levy. 01:02:45.314 --> 01:02:52.443 - which was about 5.8 million in operations. They take 1.4 out of it. So it really drops that number. 01:02:52.443 --> 01:03:00.142 - When we look at our cash flows, you're going to get an updated one this and that. The DOGF does an estimate 01:03:00.142 --> 01:03:07.342 - in that, the Department of Local Government Finance, and that's where that number comes from. But my 01:03:07.342 --> 01:03:09.694 - number is from the DOGF as well. 01:03:09.922 --> 01:03:17.068 - And I'm not sure of the timing of when they do these different calculations. OK. This would have been 01:03:17.068 --> 01:03:24.213 - over a century. OK. I'm holding it real tight. Yeah. We are, too. Yeah. And that includes the 6% this 01:03:24.213 --> 01:03:31.219 - year? No. 60% is for 2020. 2020. 2027, yeah. OK. Yeah, I'm not used to getting that new side before 01:03:31.219 --> 01:03:38.014 - it comes out this year. OK. Every month just gets more and more fun with finances. Uh-huh. Yeah. 01:03:38.210 --> 01:03:45.373 - I'm having you around for the birthday party every day. Thanks, I think. Reserve comment, Paul. Yeah. 01:03:45.373 --> 01:03:52.676 - Down in the last section here, license excise tax. So they've done some interesting things with license 01:03:52.676 --> 01:03:59.769 - excise tax. That's the tax that we all pay when we go buy a person's place. There's a little receipt 01:03:59.769 --> 01:04:05.246 - that you get. There's a license excise tax. The schools receive some of that. 01:04:05.890 --> 01:04:11.680 - In the past, we received a license excise tax and debt in operations. Before we go any farther, can 01:04:11.680 --> 01:04:17.469 - we take a short break? Yeah, sure, absolutely. Okay, we're gonna take a quick recess. We have about 01:04:17.469 --> 01:04:23.259 - 10 minutes before we need to. Oh, you're telling me. Yeah. Oh, okay, that's what you're telling me. 01:04:23.259 --> 01:04:29.222 - Okay, you got 10 minutes. 10 minutes, yeah. Okay, I'm sorry, I thought that. No, no, no. Okay. License 01:04:29.222 --> 01:04:35.070 - excise tax in the past we put into debt in operations. Moving forward, you are gonna have the choice 01:04:35.650 --> 01:04:44.191 - put it into debt or operations, okay? I will tell you most of the schools I work with are choosing to 01:04:44.191 --> 01:04:53.401 - put none in debt and all in operations for obvious reasons. So in 2026, you're going to receive approximately 01:04:53.401 --> 01:05:02.444 - 967,000 of license excise tax and operations and approximately 498,000 into the debt service fund. Starting 01:05:02.444 --> 01:05:04.286 - in 27, you can choose 01:05:04.482 --> 01:05:12.438 - to take the 498,000 and put it all in debt or in operations and not in debt. However, there's always 01:05:12.438 --> 01:05:20.394 - a good and a bad, a pro and a con. Having me around is like a birthday party too. It is, I mean it's 01:05:20.394 --> 01:05:28.429 - just, it's fun all the time. Right now, when I go back up to the top and I say that your debt service 01:05:28.429 --> 01:05:32.446 - tax rate is 65 cents and the levy reflecting that, 01:05:33.666 --> 01:05:42.565 - includes the 498,000 in miscellaneous revenue. That means moving forward, if we don't put 498,000 in 01:05:42.565 --> 01:05:52.081 - licensed excise tax and debt, your property tax levy has to go up by $498,000 to replace that lost revenue. 01:05:52.081 --> 01:06:00.891 - Gets you $498,000 in the operations fund, but it puts us probably a penny or two closer to 70 cents 01:06:00.891 --> 01:06:03.006 - a day. See what I mean? 01:06:03.618 --> 01:06:09.797 - I think every year that's going to have to be a strategy. You can make the choice. I feel like for you 01:06:09.797 --> 01:06:15.916 - guys right now, the 70 cents, we've got to play with that to make sure we don't go over that. It gets 01:06:15.916 --> 01:06:21.675 - more fun all the time. Well, yeah. Sitting next to Brad is just a ball of laughs down here, so. 01:06:21.675 --> 01:06:27.735 - All right. I'm going to pause there, and I've just got a couple more slides, but it's about the debt 01:06:27.735 --> 01:06:31.454 - part. So I'm going to pause there because I'm giving you guys 01:06:42.178 --> 01:06:48.126 - Yeah, yes, yes, yes, I will send it to Jerry. Okay, so, and he can, yeah, he sure. It's not top secret 01:06:48.126 --> 01:06:54.016 - or anything. It's not top secret. No, this is very helpful. Good, yeah. And if you guys need to like, 01:06:54.016 --> 01:06:59.906 - I've had a couple boards say I need to think about this for a couple months. Hey, Chad, come back and 01:06:59.906 --> 01:07:05.681 - give us the summarized version in a couple more. Happy to do that any time. You guys know I'll help 01:07:05.681 --> 01:07:10.878 - you however you want me to help you. Okay, right now, here are your current debt payments 01:07:11.298 --> 01:07:18.654 - and the debt service levy to repay those, okay? So down at the bottom, we've got three, four, five, 01:07:18.654 --> 01:07:25.936 - six, we've got seven bonds. You have seven bond issues outstanding, all kind of color coded there. 01:07:25.936 --> 01:07:33.586 - So in 2026, that represented your debt service levy of right at around 10 million to repay all of those 01:07:33.586 --> 01:07:34.910 - debt funds, okay? 01:07:36.514 --> 01:07:43.943 - As of right now, we had a call this past week, we're probably not doing a bond issue in 26. And so your 01:07:43.943 --> 01:07:50.730 - 2027 debt service levy should be right around 10 million again in 2027 with no new debt. Okay, 01:07:50.730 --> 01:07:57.873 - no new debt. And I would probably recommend, I think that's a good call. If we can get by not doing 01:07:57.873 --> 01:08:05.374 - a bond issue this year, that's probably the right thing to do. Then you're gonna have a small drop in 28 01:08:05.666 --> 01:08:11.181 - and then a small drop in 32, and that's just because we're paying off pens, right? Remember, 01:08:11.181 --> 01:08:17.290 - not cash rate, this is the actual debt service level, okay? All right. So by 2028, the smoke will have 01:08:17.290 --> 01:08:23.220 - cleared with everything else a little bit. With all the SCA. I think every year that goes by, we're 01:08:23.220 --> 01:08:29.150 - gonna have a little more clarity on, okay, what was truly the home state credit loss? What truly is 01:08:29.150 --> 01:08:33.598 - the circuit breaker change? What are we doing with this excise tax credit? 01:08:33.890 --> 01:08:40.673 - I think every year, I think the theme that I am giving the school boards and superintendents and business 01:08:40.673 --> 01:08:47.264 - majors more, we've gotta remain, we gotta remain flexible. Whereas before maybe we had some steadfast, 01:08:47.264 --> 01:08:53.855 - here's our tax rate, here's our levy, it's flexibility moving forward. And it's adapting and adjusting 01:08:53.855 --> 01:09:00.510 - as this goes. Let's put as many cards in your favor as we can and adapt and be flexible moving forward. 01:09:00.510 --> 01:09:02.430 - Understand all the strategies 01:09:02.562 --> 01:09:08.935 - So that when we come to you and say, okay, remember that one strategy we talked about, now's the time 01:09:08.935 --> 01:09:15.308 - to go with that strategy. I think that's what we're gonna have to do. Okay, Matt in my office, he was 01:09:15.308 --> 01:09:21.744 - gonna be here tonight, but he has a wife and a child with the stomach flu. So he's like, I don't think 01:09:21.744 --> 01:09:26.430 - I can make it. I said, I understand. So he ran a couple scenarios for you. 01:09:26.946 --> 01:09:34.496 - Basically what we're trying to show you here is that moving forward with your maximum capacity, if we 01:09:34.496 --> 01:09:42.046 - take your debt service levy up to 10.2 million, you can basically see that your maximum, you've heard 01:09:42.046 --> 01:09:49.448 - me talk about maximum debt capacity before, in the blue, we just kind of filled in that if you guys 01:09:49.448 --> 01:09:56.702 - moving forward want to manage your debt service levy to 10.2 million, you've got about 15 million 01:09:56.930 --> 01:10:06.137 - capacity, starting at 27 out through 46. Which, I mean, that is a pretty good one. The next illustration 01:10:06.137 --> 01:10:15.169 - is, okay, well, what if we brought your, in 20, in 2027, your actual debt service levy's gonna be 9.7, 01:10:15.169 --> 01:10:22.622 - just shy of 10. And so he just wanted you to see the difference in the max capacity. 01:10:23.074 --> 01:10:32.339 - So managing moving forward a $9.7 million debt service levy, that brings that $50 million down to $40 01:10:32.339 --> 01:10:41.877 - million. So which is still a decent number for you. I think what we have to watch is the tax rate. We've 01:10:41.877 --> 01:10:50.961 - got to watch the tax rate. Let's say AV hypothetically drops 8% next year. You're going to probably 01:10:50.961 --> 01:10:52.414 - go pretty close 01:10:57.058 --> 01:11:10.171 - We got to watch what he does. Is there a point where we should stop talking about the tax rate and talk 01:11:10.171 --> 01:11:23.285 - about our levy and say, look, you know, this board has always, right? Yeah, it always has. But I'm just 01:11:23.285 --> 01:11:24.798 - saying with 01:11:24.994 --> 01:11:32.143 - everything's gone on. You too. That is the new conversation now, Dana, is it's really moving forward, 01:11:32.143 --> 01:11:39.432 - we've got to manage the work. Now, if I'm presenting to a school board and I'm saying your debt service 01:11:39.432 --> 01:11:46.511 - tax rate today is 48 cents, then the 70 cents isn't really, that's really not a factor. But when I'm 01:11:46.511 --> 01:11:51.838 - talking to a school board and your current rate's 65, I think for you guys, 01:11:52.002 --> 01:11:58.967 - Yes, it's right, but we're not necessarily managing to the right. We need to really kind of manage that 01:11:58.967 --> 01:12:05.865 - levy. But the 70 cents is kind of our guiding factor. But I agree with you. I don't think you guys are 01:12:05.865 --> 01:12:13.232 - going to build it. In the past, we've said we want our total tax rate to be this. I think those conversations 01:12:13.232 --> 01:12:20.198 - are wrong. I was just thinking that we want to say, hey, we're not taking any more money this year than 01:12:20.198 --> 01:12:21.470 - we took last year. 01:12:22.210 --> 01:12:29.882 - And, you know, and just, I think that's more the story because I don't think we can say what as much 01:12:29.882 --> 01:12:37.782 - about the rate. So. You've got to get a term that your constituents can understand. Correct. Yeah. Last 01:12:37.782 --> 01:12:45.758 - year's taxes versus this year, the dollar amount's comparable. The rate may have gone up to get to that. 01:12:46.242 --> 01:12:52.482 - Yeah. That's where it's confusing. You were talking about the 50 and 40 million. That's 50 and 40 million 01:12:52.482 --> 01:12:58.369 - dollars that we can bond and use to do something with the school. Right. And that's if you issue it 01:12:58.369 --> 01:13:04.315 - all at once. And you guys are going to do that, right? You're not adapting anymore. But I think what 01:13:04.315 --> 01:13:10.437 - this does show you gives you a little bit of relief that, hey, if in two years we need a couple million 01:13:10.437 --> 01:13:16.030 - to do some small things around the district, we can do those things. And I'm going to give you 01:13:16.226 --> 01:13:24.177 - guys on debutate has worked out where we are with our different bond projects. And you're gonna see 01:13:24.177 --> 01:13:32.286 - that we've been, it's been very favorable in terms of the amount of funds we've been able to generate 01:13:32.286 --> 01:13:40.316 - through interest. And this may, I think this will help you to decide what we're going to do. Because 01:13:40.316 --> 01:13:42.622 - I think we have enough money 01:13:43.106 --> 01:13:52.734 - that we'll be able to take care of projects with the money we already have. Right. And we've got, as 01:13:52.734 --> 01:14:02.266 - far as school corporations done a good job of getting all the roads replaced, HVAC, the maintenance 01:14:02.266 --> 01:14:10.654 - has been kept up to date, correct? We've spent a lot of money on AC furnaces, for sure. 01:14:11.970 --> 01:14:21.399 - What's that? At some point, we'll have to buy a bus. Yeah, maybe. Yeah, maybe. When we potentially be 01:14:21.399 --> 01:14:30.643 - looking at reaching that $0.70 threshold on the taxi. How do you know? I mean, but the reason I say 01:14:30.643 --> 01:14:39.518 - that is I don't want to wait two years down the road and say, hey, we need to go ahead and bond 01:14:40.354 --> 01:14:47.034 - six, seven million here for these pieces and have to go through a referendum on a ballot in order to 01:14:47.034 --> 01:14:53.714 - get six or seven million, is there a, is there, I wanna be careful about that, that as we're getting 01:14:53.714 --> 01:15:00.328 - to that point that we potentially are reaching that, that we're having the bond conversation before 01:15:00.328 --> 01:15:06.942 - that so that we don't have to put that onto a ballot and potentially run ourselves into a situation 01:15:06.942 --> 01:15:07.934 - where it's not 01:15:13.538 --> 01:15:40.670 - To be on the ballot, yeah Right 01:15:41.474 --> 01:15:50.471 - Well and constituents then are mad and they're mad at a public school and It's just we've seen this 01:15:50.471 --> 01:15:59.559 - this is just another way To go after public schools and this is another way for Citizens to be angry 01:15:59.559 --> 01:16:08.286 - at public schools not realizing that a lot of the reason that we're in this situation Close here 01:16:09.602 --> 01:16:17.921 - So I agree. I think we need to be looking at our priority list and seeing if there are some priorities 01:16:17.921 --> 01:16:26.160 - that we really want to take care of and maybe go ahead and put them on a plate and get them on there. 01:16:26.160 --> 01:16:34.399 - But be strategic about how we bond them, what the payments are, when the payments are due to, like we 01:16:34.399 --> 01:16:39.326 - have been doing to maintain as much flexibility as possible. 01:16:39.906 --> 01:16:49.549 - We've done so well over the last several years of getting things up to stuff. But there's still some 01:16:49.549 --> 01:16:59.193 - to go. And we'll have another work session to arrange to go to that. So OK, with that being said, we 01:16:59.193 --> 01:17:04.062 - will end this work session. And this is adjourned.