MSD Wabash holds preliminary hearing on proposed $55 million bond for Southwood, Southwoods projects

The MSD Wabash County Schools Board of Trustees held a preliminary public hearing on a proposed $55,000,000 bond authorization to fund renovations, additions and system upgrades at Southwoods Junior–Senior High School and Southwood Elementary School. The hearing, required under state law, included a presentation on project scope and a detailed financing overview from the district’s advisers.

The hearing matters because the proposed borrowing would authorize the district to finance building upgrades and deferred maintenance that district leaders say are needed for instructional space and HVAC improvements; the size and timing of any bond issue would affect future debt service levies and local property taxpayers.

Board leadership and district staff told the public the proposal is the opening step in a multi-stage legal process under Indiana law and that no board action was required or taken at the hearing. Dr. Toon, a district official, summarized the history and planning that led to the current proposal, saying facility studies and a strategic plan beginning in 2017 identified facilities as a priority and that the district pivoted to capital projects after a prior referendum failed. He described prior work on the Northfield project and said the South-focused work would follow that timeline.

Luke Redmond, an underwriter with Stifel, presented the financing plan and parameters. Redmond said the district would seek a total project authorization of $55,000,000 but would not issue that full amount immediately; instead, the district would issue a smaller initial bond to mobilize early work. “The total project authorization would be for $55,000,000,” Redmond said, and “the goal would be to structure this in the manner to maintain the $1.10 total tax rate that in 2026 that MSD Wabash has been accustomed to over the last few years.” He described a likely first issuance of $2,000,000 this year to cover initial design and long-lead items and said the remaining authorization could be sold later as bids and final scope are set.

Key financing figures presented (all described by presenters as maximum or estimates): the total borrowing authorization would be $55,000,000; estimated issuance and underwriting costs of about $820,000; estimated proceeds available for project costs of roughly $54,180,000; illustrative interest rates shown between 2% and 6% (Redmond said current market rates would be about 4–4.25% if bonds were sold immediately); an estimated total interest cost (on the conservative scenario) of $33,399,847; a stated maximum annual payment parameter of $8,000,000; and a computed maximum tax-rate impact of 0.6997 (presenters emphasized these figures are maximums and can be reduced if the board reduces scope or if costs come in lower).

District staff and advisers explained scope items discussed in the work session and at the hearing include HVAC upgrades, construction of additional or repurposed instructional spaces where existing areas are underutilized, improvements to outdoor areas at the junior/senior high sites, and some items that could touch the Heartland Career Center. Staff cautioned that the final scope will depend on bids and that the board will not authorize more borrowing than necessary for the approved scope.

Board leadership reiterated the legal process: the hearing was held under Indiana Code 6-1.1-20-3.5, which requires public hearings before a school corporation adopts a preliminary determination to issue bonds or enter a lease for a project exceeding statutory thresholds. The board’s presiding officer stated, “Again, no board action is legally required at this hearing. Rather, this hearing is solely to hear public comment,” and noted a second public hearing and formal resolutions will be considered at the September 23 meeting.

No formal vote or resolution was taken at this meeting. The board opened and closed the hearing, received the presentations and invited public comment; the hearing concluded with the board noting it will continue to work with administration and its professionals to find efficiencies and conserve tax dollars while meeting educational needs.

The board scheduled a second, legally required public hearing for September 23 at 6:00 p.m. in the boardroom; resolutions with the numerical parameters presented will appear with the agenda for that meeting.

Sources: presentations and remarks by Dr. Toon (district official) and Luke Redmond (Stifel underwriter) during the district’s preliminary determination hearing.