Tax neutrality assured with South Putnam GO bond

While it was briefed generally last month, school leaders have been assured that a new general obligation (GO) bond to be issued for repairs throughout South Putnam is to be tax-neutral.

The next steps in the process of setting out the bond, the South Putnam School Board held a hearing on those repairs, as well as passed several resolutions approving the issuance, at its regular meeting Wednesday evening.

A hearing as such is required if a school corporation is planning to spend more than $1 million on a repair project. The proceedings Wednesday were aimed toward the expected financial terms.

A GO bond is one backed by an entity’s credit and taxing ability, rather than relying on potential revenue brought in by a given project.

Supt. Corey Smith said the project is to focus in infrastructure. “High-priority” improvements will include the gravel parking lot at Central Elementary and traffic flow on the main campus overall, as well as security measures, the boilers and chillers at South Putnam Middle/High School and vehicle replacement.

While Stacy Barclay of Sutherlin, Zeiner & Barclay walked the board through the approvals, Matt Schumaker of Stifel Financial Corp. briefly overviewed the impact of the estimated $1.6-$1.8 million project.

Schumaker reiterated that South Putnam is to have considerable outstanding debt fall off by 2024. This is as payments are to increase marginally between 2022 and 2023.

“When talking about new projects, that’s exactly what we want to see,” Schumaker said. “That means we can add in new payments from new bonds without impacting the tax rate.”

Tax rates are comprised of a corporation’s Operations, Debt and Pension funds. While he noted that the rate fell slightly between 2021 and 2022, Schumaker said this leaves room for the new GO bond. This has to do with recent growth in assessed value.

With the goal being to retain the 2021 tax rate of $1.32, one payment — and then a smaller one — in 2023 and then a larger payment in 2024 would be made. The actual project and interest rate amounts would not be finalized until the bond is sold.

He emphasized that the estimated tax rate impact of almost 32 cents is based on a statutory formula, and does not account for current debt dropping off. As such, there is to be no impact with the 2021 rate.

After Schumaker’s presentation and with no comments from the audience, the board closed the hearing and passed a resolution to appropriate funds, as well as two others to adopt the project and the bond’s terms.

In other business:

• The board approved an agreement with Crane Credit Union to participate in its affinity debit card program. Those interested can use debit cards with South Putnam’s logo, while the corporation receives a small percentage from each transaction made with them.

Smith said there would be no cost to the corporation, and that Crane would make a monthly $250-minimum donation.

• The board adopted South Putnam’s expected budget for 2023, as well as a planned bus replacement plan and a capital projects plan. These were outlined in coverage of the board’s regular meeting held on Aug. 10.

The board also adopted three related resolutions concerning appropriations and the tax rate, as well as one on routine transfers altogether not exceeding 15 percent from the Education Fund to the Operations Fund in 2023. One resolution authorizes a reduction in 2022 appropriations to maintain the maximum levies in each fund, while the other allows for inter-fund transfers by year’s end.

• The board approved the ratification of a tentative collective bargaining agreement for 2022-23 between the corporation and the South Putnam Classroom Teachers Association. A public hearing on the agreement was held on Oct. 5.

Smith stated that negotiations were productive with a goal of attracting and retaining teachers while being fiscally responsible.

• The board approved accepting a donation of 16 engines by Kohler toward South Putnam’s new agriculture mechanics program.

The board also recognized South Putnam’s Students of the Month in Emma Minor (Central Elementary), Benson Roberts (Fillmore Elementary), Emalyn Tomaw (South Putnam Middle School) and Lincoln Hochstetler (South Putnam High School). Hochstetler was not in attendance.

The board also approved the following personnel report:

­• Resignation: Brian Gardner – girls’ golf coach;

• New hires: Victoria Land – Fillmore Elementary instructional assistant (part time); Jill Newton – girls’ golf coach; and Brad Hudson – boys’ golf coach.

Smith and the entire board were joined by Corporation Treasurer Hilarie Logan and Business Operations Coordinator Terri Beasley for the meeting.

The next regular meeting of the South Putnam School Board is set for Wednesday, Nov. 9 at 7 p.m. in the music room at Central Elementary.