School board hears plan to use capital funds, line of credit to bridge school construction and FY25 budget gap

The Brevard Public Schools board on Aug. 12 heard a facilities funding briefing in which staff proposed moving eligible FY2025 salaries into the capital fund to improve the district’s FY25 financial position and described a likely short-term borrowing need to cover construction draws on several classroom‑addition projects.

The proposal matters because district staff said the one‑time transfer would shore up the general fund balance for FY25 and allow a more complete FY26 capital program. “We looked at a couple different options and that seemed to be the best option in that it shores up the general fund balance in FY 25 and it also allows us to have a relatively complete, program of capital projects in FY 26,” Sue Han, facilities staff member, told the board.

Han said the plan is treated as a one‑time solution and staff do not propose continuing the salary transfers into FY26; the FY26 capital program shown to the board excludes transferring salaries for bus drivers, bus mechanics and ET (educational technology) technicians, though it does continue maintenance salaries that the district has traditionally funded with capital.

Most immediately, staff described four capacity projects tied to impact‑fee revenue and capital funding: a separate day school at the Kennedy Middle School campus, a Westside Elementary classroom addition (on the board agenda that night), a classroom addition at Bayside High, and a Sunrise Elementary K–8 conversion with classroom additions. Han said the district has about $7 million in North‑area educational impact fees saved for the separate day school. The estimated construction cost for that school is roughly $22 million and “we do think in this case, we will need some short term financing,” Han said.

Financing consultant John Ford of Ford & Associates told the board a new line of credit, executed under a lease‑purchase structure as the district used in 2022, is the “logical solution” when impact‑fee receipts lag construction payouts. He estimated the separate day school may require about $10 million to $12 million of short‑term borrowing and that repayment could occur within about three to four years depending on impact‑fee collections and other funding choices. Ford summarized prior practice: in 2022 the district opened a line of credit and did not have to draw more than closing costs; staff subsequently closed the line before maturity.

Board members asked several clarifying questions about timing and repayment. School board member Miss Campbell pressed staff on the separate day school’s slow impact‑fee receipts in the North area, asking whether repayment might extend well beyond three to four years if quarterly collections remain low; Han replied that the three‑to‑four‑year estimate “included the time during construction where we’re also accumulating impact fee revenue,” and that earlier payoff could be achieved if the board chose to direct other district revenue to the project.

Multiple board members praised the breadth of the FY26 capital program while cautioning that the proposal relies on conservative revenue estimates and that the district should avoid recurring use of capital to cover operating costs. Miss Wright said she supported the backward‑looking transfer to shore up the FY25 fund ratio but said it should not become a recurring practice. Several board members thanked facilities and finance staff for coordinating assumptions; Han said finance staff Cindy Lesinski and others had vetted the numbers.

Staff also reviewed recurring capital program items: fleet and white‑fleet renewal, classroom and restroom renewal, ADA and playground surfacing conversions, HVAC/elevator/boiler renewal, stadium lighting conversions, athletics FF&E and support for career and technical education programs. Han noted a series of smaller, one‑time projects proposed for FY26 (for example, therapy‑pool decommissioning at Creel and Oak Park and completion of Titusville High baseball work) and said her department planned to leave an estimated $3 million unprogrammed in FY25 to mitigate uncertainty.

On next steps, staff said they will: open an RFQ to banks for a line of credit in the coming week; coordinate procurement and legal review; and aim to bring authorizing resolutions for financing to the board in October. Han and Ford emphasized the RFQ will be posted to the open market and procurement will solicit interest from multiple lenders.

Discussion vs. direction vs. formal action: the board discussion on Aug. 12 was principally informational; staff described proposals and budgeting options and the board provided feedback. No formal borrowing authorization or binding vote was taken that day. Staff said they would return with specific financing documents and any required resolutions once the RFQ and underwriting work are complete.

Clarifying details recorded in the meeting included: about $7,000,000 saved in North‑area educational impact fees for the separate day school; the separate day school estimated construction cost of about $22,000,000; short‑term financing estimated at $10,000,000–$12,000,000 for that project; an estimated 14‑month construction schedule for the separate day school; a district estimate of roughly $115,000,000 in capital revenue for planning purposes (96% collection assumption); and a planned FY26 capital program that excludes transferring bus drivers, bus mechanics and ET technicians’ salaries into capital.

The facilities office asked the board for any substantive feedback and said staff will incorporate board direction into the FY26 capital plan and the RFQ for short‑term financing.