School board preliminarily approves parameters for up to $6.6 million bond; outlines budget timeline

The McCutcheon School Corporation Board on Tuesday unanimously approved a resolution preliminarily authorizing financial parameters for a potential bond issue of up to $6,600,000 and reviewed a five‑month budget adoption timeline leading to formal adoption in October.

The board voted 7-0 to pass the preliminary resolution. Doctor Penrod, presenting the district’s budget schedule and the bond proposal, said the resolution establishes the financing parameters now and that a public hearing will be held at the August meeting before any final decision.

The timeline outlined by Penrod calls for a high‑level budget workshop in August, public advertising and a public hearing on capital projects, bus replacement and the operating budget at the September meeting, and formal adoption of the 2026 budget, a 2026–2028 capital projects plan and a 2026–2030 bus replacement plan at the October meeting. Penrod said the board will also be asked in October to adopt three routine resolutions: one to permit transfers from the education fund to the operations fund (if needed), one to authorize intra‑fund appropriation adjustments, and one to allow certain year‑end adjustments tied to the district’s December 31 cash balance.

On the bond proposal, Penrod presented projected repayment scenarios prepared by municipal advisers and noted that issuing first‑mortgage bonds would be required if the district exceeds state statutory capacity for general obligation debt. He summarized advisers’ numbers: the maximum borrowing amount shown was $6,600,000; estimated cost of issuance about $185,000, leaving roughly $6,400,000 available for projects; and two short repayment scenarios of roughly 6 years and 2 months and a longer scenario of about 12 years and 2 months. Penrod said the advisers’ analysis estimated the district’s existing certified debt service levy at 0.2332 and that adding one of these issues would raise the levy to about 0.3112, 0.3423, or 0.3082 depending on the scenario chosen.

Penrod and advisers also explained how recent and upcoming changes to state property tax rules (referred to in the presentation as "Senate Rule Act 1") and reductions in net assessed values affect the district’s debt capacity and levy calculations. He said the district’s operations fund faces particular pressure in coming years and that bus acquisition is also constrained by long vendor lead times and rising prices.

Stephanie Grama of Barnes & Thornburg, appearing as counsel for the bond matter, told the board the resolution before them "really just goes over the high part of the $6.6" and that the board would be approving financial parameters on a preliminary basis and holding a public hearing in August. The board then moved and passed the resolution.

Board members and staff did not select final bond structure or repayment scenario at the meeting; Penrod said those decisions, and more detailed explanations, will return to the board in August and September. No binding issuance occurred Tuesday; the vote approved preliminary parameters that let staff and advisers proceed with public notice and a hearing.

Looking ahead, Penrod cautioned that the district will have 10 days to respond after the state reviews the budget and returns it with any changes — a window that rarely aligns with scheduled meetings and can require off‑cycle adjustments.

Ending: The board scheduled a public hearing on the bond at its August meeting and will return in August and September with more detailed budget documents and recommended bond structure if staff recommends moving forward.