Warsaw School Board on Monday approved obtaining up to $3 million in general obligation bonds for capital projects.
Last year, Warsaw Community Schools asked for general obligation bonds of $8 million, said Chief Financial Officer April Fitterling said. This year, WCS will be requesting bonds for a maximum of $3 million for capital projects at Lakeview Middle School and the high school.
A general obligation bond is a type of municipal bond in which the bond repayments (interest and principal) are guaranteed by the total revenue generated by the relevant government entity or agency. In other words, the repayment is guaranteed by both tax revenue and operating revenue generated by various projects. General obligation bonds are primarily used to subsidize the development of public projects, according to corporatefinanceinstitute.com.
Fitterling said a school district of WCS’ size has to constantly be on top of construction projects and “we will be moving forward instead of staying still. For a long time, I think we were staying a little too still and now we’re playing catch up, especially at the high school.”
Fitterling said there is no expiration date or end date on the general obligation bonds, but WCS will try to plan the projects the bonds will go toward in the next year or two.
“Tonight, we’re just asking to move forward with the GO bonds,” Fitterling said. Next month, the school board will have a project hearing where more details will be given about the projects.
WCS has been putting together a 10-year plan, Fitterling said. Last year, the school board decided to continue with its 10-year plan.
Fitterling said on bonds, there is zero impact on the tax rate because of the assessed rates. “Because you have your assessed rates come in higher, your tax rates come in lower.”
In 2019, the assessed rate was 90 cents and for 2020, the assess rate dropped to 87 cents.
The school board also approved to reimburse expenditures made on the projects paid for prior to obtaining the bonds.
“It’s just a legality issue. So if you were to start a project before we had the cash, you would just need to pay the GO bonds back” to operations for any projects, Fitterling said.
The school board also approved to advertise for the 2020-21 school budget.
“It’s just a notice to tax payers where our public hearing is to be held and that is projected to be on Sept. 21,” Fitterling said.
The school board also approved two grants. The first is a $1,000 grant from Johnson & Johnson to help with WCS’ COVID expenses. The second grant is from K21 to fully funding additional water bottle fillers at the schools.
