Scott County School District 1 holds preliminary hearing on $2.6 million bond plan

The Scott County School District 1 school board held a preliminary determination hearing to outline a proposed $2.6 million lease-financing package that district officials said would replace existing debt and fund HVAC repairs, middle/high roof work, replacement lockers, outdoor facilities projects, parking-lot improvements and elementary-school improvements.

Superintendent Jones described the plan as "basically tax neutral" and said the district would reimburse itself after using bond proceeds for the projects. Dennis Sutton, introduced as a representative of the law firm Bose McKinney, told the board that the financing requires a two-hearing legal timetable and advertised notice periods that could trigger a petition (remonstrance) if roughly 5% of registered voters file a challenge. "Before we issue these bonds, there's a couple of public hearings that the school board has to hold, and those have been advertised," Sutton said.

A finance representative identified only as Mike outlined the bond parameters the board set for the preliminary hearing: a maximum issue of $2.6 million, a maximum term of 20 years (officials said repayment is likely to be under 10 years and estimated around eight years), and a maximum interest rate of 6 percent, though Mike said the district hopes to secure rates closer to 4–4.5 percent. He said the district set a maximum annual payment of $500,000 and estimated that, on the district's current assessed valuation, that level of annual debt service would equate to about $0.25 on the nonexempt debt service levy; he added officials expect the levy to decline organically in coming years.

Board members sought clarification about whether the measure would raise local taxes. Mike reiterated that "your levy will not increase" and noted that recent state changes (referred to in the meeting as "senate enrolled act number 1") make exact projections harder but do not change the district's expectation that the levy will not increase.

Officials said they plan to have resolutions for adoption at the board's July 21 meeting; if those resolutions are adopted, additional notices and a remonstrance period will follow before the district can close on the financing—currently projected in late September if market conditions permit. Mike also explained the district expects to use a school building corporation to issue the bonds so the issue will not count against the school corporation's general obligation bonding capacity.

No formal vote on the financing occurred at the hearing; the board was briefed on terms and next steps, with staff scheduled to return to the board for the July 21 resolutions and related public notices.