EDITOR’S NOTE: This story has been corrected to show the amount of interest BCSC would pay on the bonds.
Because of a Republic error, an article in Wednesday’s paper on BCSC’s facilities proposal gave an incorrect figure in regards to the amount of interest the school corporation is estimated to pay on $306 million in bonds based on a maximum rate of 7%. According to Stifel Public Finance, the estimated interest is $200 million.
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The Bartholomew Consolidated School Corp. board is continuing to consider a proposal to authorize up to $306 million in bonds for several facility upgrades, though some community members and at least one school board member are skeptical of the plan.
The school board had its first public hearing on the matter on Monday, with plans to hold a second public hearing and vote on a project resolution on Dec. 11.
As the school board considered the proposal, board member Jason Major expressed concern about whether BCSC is being realistic and fiscally responsible in its plans for the future. He added that he feels it would be “safer” to break the plan down into smaller steps.
“Do we approve $300 million today?” he said. “Or do we approve $75 million for these three schools, four schools, five schools and then one to two years from now, have a better understanding of our estimates for cost based off of what we’ve seen happen here?”
BCSC officials are currently considering the following projects as part of the school corporation’s “Envision 2030” plan:
- A new westside elementary school.
- Renovations to remaining elementary schools (excluding Parkside and Schmitt, where work is already underway).
- Significant renovation at Northside Middle School and tech/equipment updates at Central Middle School.
- Additions and renovations to both Columbus North and East high schools to meet career and tech education demands.
- Physical education/extracurricular expansions at the two high schools to meet demands.
- Relocation of Bright Beginnings Early Learning Center to the R.L. Johnson Building, relocation of Columbus Virtual Pathway to the McDowell Education Center, and relocation of C4 Cosmetology to expanded space at East.
The administration is proposing the school board pass a resolution to issue bonds for all of the proposed projects with a not-to-exceed amount of $306 million. They also recommend that the board not seek a capital referendum on the work.
School officials have said that BCSC plans to avoid raising tax rates by timing debt from the new projects with the roll-off of existing debt.
Assistant Superintendent of Financial Services Chad Phillips stated in a previous interview that BCSC doesn’t plan to issue all $306 million in bonds next year. Instead, they plan to meet with the board every fall to discuss assessed value, interest rates and which projects to prioritize.
While Phillips said that the project resolution would provide a “ceiling” of $306 million and allow the school corporation to borrow up to that amount, Major said he doesn’t see the estimate as a true maximum because costs are likely to change over the next decade.
According to Jim Funk with CSO Architects, the figure includes inflation assumptions, though he noted that it’s impossible to predict how things will change in the future.
“Each project will be approved individually,” he added.
Mike Schumaker with Stifel Public Finance said it’s their conservative estimate that the costs of issuance on the $306 million bonds will be $2.6 million, leaving $303.4 million for project costs. The firm also estimated that interest would add up to almost $200 million based on a maximum rate of 7%.
“Right now rates are as high as they’ve been in 15 years,” Schumaker said. “If you were to do this debt today, you’d be at about 4.5% interest rate. We’re using a 7% because who knows what happens between now and 2029, so we need to be conservative.”
Major asked if the cost of interest is on top of the $306 million, and Shumaker confirmed that it is.
Additionally, Major expressed some skepticism about whether BCSC will have the capacity to fill a new elementary school on the west side without busing students over from the east side. He also questioned whether the new school would be needed if the renovations to other elementary schools weren’t expected to result in decreased capacity.
“I’m not necessarily against a new school,” he added. “I just want us to understand the true cost and benefits from it.”
Board member Logan Schulz noted during the meeting that the amount of the tax rate that goes to debt service for projects does impact the amount the school corporation can spend on items such as classroom size reduction and staffing without raising the rate.
However, he also said that he and Major been visiting BCSC’s elementary schools, and he appreciates having the firsthand experience so that he can better explain the need for renovations to community members.
Members of the public also spoke up during the hearing. While a couple expressed support for the proposal, others questioned why BCSC plans to vote on the whole amount at once rather than handling projects one at a time.
