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Franklin County school board holds preliminary hearing on up-to-$4.2 million bond for buses, site repairs
Summary
The Franklin County Community School Corporation held a preliminary determination hearing on Sept. 8 on a proposed bond issue capped at $4.2 million to fund bus replacements and site and building repairs; officials said the proposal as presented would not raise the district's current tax rate and that a second hearing is scheduled Sept. 17.
The Franklin County Community School Corporation held a preliminary determination hearing Sept. 8 on a proposed financing package that would allow the district to borrow up to $4.2 million to pay for bus replacements and site and building repairs.
The hearing, required under Indiana law before the board may adopt a preliminary resolution to issue bonds or enter a lease if project costs exceed statutory thresholds, was informational only; no board action was required or taken at the meeting. "Pursuant to Indiana code 6-1.1-20-3.1, the school corporation must hold 2 public hearings and adopt a resolution to preliminary determine to issue bonds or enter a lease for a project which has a total project cost in excess of certain thresholds," Shannon New, assistant superintendent, read during the hearing.
Kendra Franks, the district's business manager, and district advisers described the financing parameters the board would see in a future resolution if it chooses to move forward. "I am going to refer to what Matt just shared with you and that there is no increase to the tax taxpayer rate at this time. We are ask looking to ask for the 4.2 borrowing amount in which we will pay back for 1 year. We would like to use this for bus, replacement and site improvements," Franks said.
An adviser presenting financial scenarios said the resolution language would set a not-to-exceed par amount of $4,200,000, an estimated cost of issuance of $150,000, and a conservative maximum interest rate of 6 percent. The presenter said estimated proceeds available for project costs would be a little over $4,000,000 after issuance fees. "This shows, $4,200,000 borrowing, shows it being paid back in 1 year. That would keep the tax rate neutral, meaning the tax rate would not increase," the adviser said.
The adviser explained the bond parameters are intentionally conservative: a 6 percent maximum interest rate and a maximum term that could be extended if circumstances change. Using the conservative assumptions, the adviser estimated $618,625 in interest cost (assuming a five-year repayment at 6 percent) and noted a maximum annual payment could be as high as about $4.5 million if the district elected to pay the entire principal in one year. He said the district expects actual interest rates at issuance to be materially lower than the worst-case numbers presented.
No members of the public had signed up to speak at the preliminary hearing on Sept. 8. The board posted a second public hearing for the same project in the boardroom for 5:30 p.m. on Sept. 17, 2025.
The presentation and the hearing materials, advisers said, are the beginning of the legal process described in statute; any future bond issuance or resolution would return to the board for formal action after the second public hearing and required resolutions.
