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District finance staff outline borrowing plan, fund structure and summer projects tied to referendum
Summary
Finance staff described how the district plans to structure referendum proceeds in two funds, timing of borrowings, bond-rating outreach and summer capital work including Jefferson repairs and Lincoln roof replacement.
District finance staff briefed the Finance & Facilities Committee on how referendum proceeds will be handled and on near-term summer projects the district expects to start.
Ken, a district finance staff member, described two funds the district will use: Fund 49 (Capital Projects Fund) to hold proceeds and pay construction costs, and Fund 39 (Debt Service Fund) to record payments of principal and interest. He said the district is spending from Fund 49 even before proceeds arrive and explained that borrowing allows projects to begin sooner while preserving tax levy timing for debt service.
Ken outlined a borrowing plan presented in the packet: an initial borrowing in the early summer followed by an additional borrowing the following year; presentation materials cited roughly $14.5 million in a first-year borrowing and about $10.5 million in a second-year borrowing as examples. He said bonds and notes of more than $15 million must be spent within two years; smaller borrowings have a three-year spending window. He also explained that current interest-rate conditions could yield interest earnings on proceeds that exceed interest costs (arbitrage) and that arbitrage rules require payments to the IRS if spending windows are extended beyond allowable periods.
Ken said the district will seek a bond rating from Moody's and a municipal underwriter to secure competitive rates; he noted Manitowoc has not borrowed for many years and a formal rating process will inform market reception.
On summer project specifics, facilities staff reported a wish to complete work at Jefferson this summer (the presentation listed an original estimate of $430,000). Lincoln High School roofing work was shown on the summer list, with a presentation figure of roughly $1 million for the 2025 roofing project; staff said about 60% of the Lincoln roof will be replaced this year. Staff also noted difficulty finding tuckpointing contractors for other buildings and that contractor availability may change the summer project list.
Staff emphasized a conservative approach on projects where the long-term use of a building may change as part of the master-planning process: the district will avoid committing major dollars to buildings that could be repurposed or closed as options are developed.
No board action was taken on the borrowing plan at the committee meeting; the presentation is intended to inform next steps and to support forthcoming board decisions on issuance and project sequencing.
