HIGHLIGHTS: Construction Update (6:46); Over-Borrowing and Use of Surplus Bond Funds (7:00); Decrease in Enrollment (7:16); Superintendent Search Update (7:22); Health Clinic for Staff (7:25)
6:31 Karpick called the meeting to order. He called for a vote to approve the revised agenda and then to approve the minutes from the September meeting.
Voted 7 out of 7
An update about the superintendent search was added to the agenda and posted to the school’s website at the last minute. Ideally, the school board would have an email list of interested people in the community who would receive meeting reminders, the agenda, and the packet of documents to be discussed. When last-minute changes are made to the agenda, the email list could be used to update everyone.
6:32 Karpick said no one from the community signed up to speak at the meeting. I wonder if the uninviting instructions on the meeting agenda discourage community members from speaking up: “the school board will not entertain questions during a board meeting. All questions should be referred to the superintendent’s office during normal business hours.” There is nothing like this on the school board agendas at neighboring school districts like TSC and LSC. I’ve written a post with my thoughts about how the school board actively tries to discourage community involvement.
6:33 – Shelby Johnson, Assistant Principal at the Jr/Sr HS and Director of Special Education, invited the principal from each school (WLES, WLIS, Jr/Sr HS) to recognize students with the “Red Devil Pride Way to Go Award” for being great citizens. Two students from each school came to the front individually while the school administrator shared why this student was chosen and then each student was given a certificate. I love starting off our meetings with recognition of our great students!
6:42 Ohlhaut asked for approval of the budget with 5 resolutions:
- Appropriation tax rates as advertised
- 2022-2026 bus replacement plan
- Superintendent authorized to reduce appropriations if needed
- Authorizes transfers between the referendum, education, operations, debt service, and rainy day funds
- If property taxes were not paid and tax warrants were to become necessary, this resolution allows the school corporation to issue tax warrants to collect the revenue
Yin asked if these resolutions include anything about CARE or ESSER funds. Ohlaut said, no – just the tax revenue. I appreciated Yin bringing up the question about the school district’s use of the federal Covid money. Teachers and community members would like to know how our school district is using these funds, but little has been shared so far. Details about the school budget were discussed at the August budget work session.
Voted 7 out of 7
6:46 Sloat asked Tim Slauter, Project Manager at Jr/Sr HS (previously the Associate Principal) to share an update on the construction projects. Slauter shared that we are 44 months into the 4 phases of the projects at the Jr/Sr HS and we have 2 months to go. The 1st and 2nd phases are complete and have been in use: the aquatics center, LGI room, and food court. Phase 3 is the James R. Guy Education Wing which included moving the library from the 2nd to 1st floor, adding new science labs and English classrooms, renovating old science labs, and creating a new entrance at the NE corner of Leslie. He said the library and technology lab have been in use since spring 2021. Slauter said the lecture stairs in the library are popular with students before and after school as well as at lunch. The main delay is waiting on parts for the NW stairs off Leslie and he anticipates that these stairs will be in use by January. The 4th phase is the Bob Kelly Performing Arts Center and is 98% complete. The music department uses it daily and the additional graphics and other remaining items should be complete soon. Slauter said that the music practice rooms have been used. The auditorium has new lighting, sound, acoustics, and new chairs.
Karpick asked about the postponement of the grand opening ceremonies. Slauter said that Covid restrictions and a few issues with the Kelly Family not being able to arrive caused the delay, but reported that they plan to hold the grand openings in Spring 2022. Witt said that she had heard from people who were concerned about the air quality and circulation in the Jr/Sr HS and referenced Covid as the reason for the concerns. Slauter said that he has not heard of any concerns. I have been in the remodeled auditorium a couple of times this year for choir and orchestra concerts and I love the new sound shell.
6:57 Sloat asked Slauter to give some background on the pool as it was being discussed later on the agenda. Slauter said the pool has had lots of issues but the company is paying to repair them. The main issue is standing water on the new tile. The company that put in the tile punctured the drain pipe in 3 places. Kettlehut Construction has taken responsibility and will bring in a company in November to drain and dry the pipe and then coat it with epoxy. They will come back in 5 years and do it again to make sure the fix lasts.
7:00 Sloat gave a presentation about the recent school district borrowing and handed out several documents to show how the school corporation used the $95.2 million it raised from issuing the 4 recent bonds:
- 2017 bond ($54,610,029) – construction of WLIS, renovation of WLES, renovation of Jr/Sr HS Cafeteria & LGI room, other Jr/Sr HS improvements, and renovation of Happy Hollow
- 2018 bond ($17,384,505) – construction of Jr/Sr HS aquatics center and other improvements to Jr/Sr HS
- 2019 bond ($15,576,911) – construction of Jr/Sr HS Guy Education Wing and Kelly Performing Arts Center and other improvements to Jr/Sr HS
- 2020 bond ($7,628,074) – same purposes as the 2019 bond
The face value (par value) of the bonds is $83.9 million, but the school corporation provided generous interest rates which allowed the bonds (particularly the 2017 and 2018 bonds) to sell at a premium and raise $11.3 million more than the face value. Sloat explained that the bonds were sold at a premium because of potential cost increases associated with the construction projects and said that he was following the advice of the bond counsel (Ice Miller) and financial advisors (Umbaugh and Baker Tilly). Baker Tilly recently told Sloat that 90% of the municipal bonds they are involved with have been offered at a premium.
I am impressed with the powerpoint and handouts for the audience with recent information from Sloat. He appears to really be trying to inform the community. I wish the school board would follow his example and provide us with the packet of documents they are discussing at the meeting. With respect to the recent school district borrowing, it is a large amount of debt for a school district of our size. The total scheduled bond payments over the life of these 4 bonds comes to $131 million. In a ranking of every school district in Indiana, WLCSC comes in second place in the state for most debt per student.
The information Sloat provided shows that the fees for the underwriter, bond issuance, financial advisors, legal, consulting, and trustees for these 4 bonds came to: $1.4 million. Sloat did not explain how much of the $593,000 in legal and consulting fees went to Ice Miller and how much went to the school corporation attorney, Bob Reiling.
The school corporation was still making large debt payments on the 2008 bond when these new bonds were issued and so they structured $3.5 million in new debt payments to come directly from the new bond proceeds (bond interest expenses). Sloat noted that there was some “intermingling of expenses” across the 4 bonds. The table below summarizes the use of the bond funds as of August 31, 2021.
Table 1: Use of Bond Funds
| Total | 2017 Bond | 2018 Bond | 2019 Bond | 2020 Bond | |
|---|---|---|---|---|---|
| Underwriters Discount | 212,557 | 102,289 | 39,062 | 71,206 | 0 |
| Bond Issuance Expenses | 378,429 | 75,016 | 55,950 | 157,695 | 89,768 |
| Bond Interest Expenses | 3,452,660 | 1,858,487 | 1,205,336 | 256,229 | 132,608 |
| Financial Advisor/Trustee Fees | 215,627 | 77,629 | 116,911 | 15,810 | 5,277 |
| Legal Fees | 538,422 | 252,309 | 157,462 | 55,790 | 72,861 |
| Consulting Fees | 55,000 | 55,000 | 0 | 0 | 0 |
| Architect – Master Plan | 263,750 | 263,750 | 0 | 0 | 0 |
| Jr/Sr HS Chiller | 1,070,459 | 1,070,459 | 0 | 0 | 0 |
| Jr/Sr HS Orchestra Pit Lift | 257,663 | 257,663 | 0 | 0 | 0 |
| Jr/Sr HS Athletic Building | 6,760 | 6,760 | 0 | 0 | 0 |
| Jr/Sr HS Renovation | 1,205,813 | 139,613 | 467,902 | 575,085 | 23,213 |
| Jr/Sr HS Aquatics Center | 15,447,183 | 711,386 | 14,399,675 | 261,517 | 74,605 |
| Jr/Sr HS Café Renovation | 3,773,105 | 3,773,105 | 0 | 0 | 0 |
| Jr/Sr HS Education Wing | 10,048,915 | 0 | 0 | 9,826,036 | 222,879 |
| JR/Sr HS Performing Arts Center | 5,699,494 | 0 | 0 | 4,560,291 | 1,139,203 |
| Happy Hollow Renovation | 191,702 | 189,250 | 0 | 2,452 | 0 |
| WLES Renovation | 16,275,492 | 16,184,026 | 91,466 | 0 | 0 |
| WLIS Construction | 26,623,680 | 26,623,680 | 0 | 0 | 0 |
| Transfers to Debt Payments | 300,000 | 300,000 | 0 | 0 | 0 |
| Total Expenditure | 86,016,711 | 51,940,422 | 16,533,764 | 15,782,111 | 1,760,414 |
Sloat explained that unspent bond funds are invested and have earned $1.6 million in interest so far. That brings the total amount available to spend to $96.8 million. $86.0 million has been spent, as of August 2021, leaving a bond balance of $10.8 million. Some construction is still ongoing and Sloat anticipates that $4.3 million in additional construction costs will be incurred over the next several months. This will leave $6.5 million in projected surplus bond funds.
It was just last year that the school board approved the 2020 bond and they knew that they wouldn’t need the money for construction when they issued it. A year later, the discussion is all about trying to undo that mistake: how to pay off the principal early or refinance this debt. I think it was irresponsible for the school board to borrow so much money that they couldn’t afford the payments and it’s even worse that their solution was to borrow more to have cash on hand to make the payments for the next few years. I agree with the analogy Troy Janes, a parent and accounting professor, shared at the September 2021 school board meeting: “It’s like taking a cash advance on a credit card in order to make the monthly credit card payment. The result is that we pay a lot of extra interest.”
Sloat explained that the $6.5 million in projected surplus bond funds can be used for other remodeling projects that are related to the bonds’ original purposes. Sloat said that recent maintenance costs that would normally be paid out of the school corporation operations fund have been paid out of the bond funds instead. He mentioned the need for a new roof at the Jr/Sr High School that would likely cost $300,000 as well as other projects and suggested they could be paid out of the surplus bond funds.
The other option is to use the surplus bond funds to make debt payments. Sloat said that the 2017, 2018, and 2019 bonds “were not issued for the purpose of surplus funds to pay debt; that was not done. We did realize, however, when we sold the 2020 bond that we were stretching ourselves.” He explained that offering the 2020 bond “falls in line with the statute that says surplus funds can be used to make debt payments.” The school board could decide not to do any additional projects and instead use the surplus bond funds to help make debt payments.
The West Lafayette Schools Education Foundation has $2.6 million in donated funds, most of which was earmarked for the construction projects and could be put towards debt payments. Sloat said that the bond counsel told him the other day that the school corporation should use the donated funds first, before using the surplus bond funds to make debt payment. Reiling jumped in and corrected Sloat saying, “you’ve got that backwards.” Sloat responded, “last time I talked to them they told me to use the donated funds first, which was confusing, so we may need to clarify that, but either way we’ve got to use the bond surplus money toward debt reduction.”
Rather than just using surplus bond funds to help make the scheduled payments, why not pay off some of the principal directly? This was discussed at the September 2021 meeting. Sloat reported that the bond counsel explained that it is not possible to pay off principal on tax exempt bonds before the call date, 10 years from the date the bond was issued. There is a process called defeasance where the school corporation could take advantage of lower interest rates by issuing new taxable bonds at the lower rate and using those proceeds to set up an escrow account to make the original bond payments until the call date. Sloat said that Reiling knew more about this option than he did and asked him to explain it. Reiling said, “we take that money and we buy US treasuries, and those US treasuries back up the bonds that are outstanding . . . It is not like refinancing your car or your house.” Sloat then presented a table showing the projected savings from refinancing the bond debt using the defeasance process.
It sounds like the school board authorized the 2020 bond without realizing that they could not refinance for 10 years because just a year later they are worried that state statutes don’t allow them to pay back the bonds early and are discussing defeasance as a partial fix. Even after charging extra expenses to the bond accounts that would normally have gone to the operations budget, they are still projecting a $6.5 million bond surplus in addition to donations of $2.6 million already received. So even before the school board authorized the 2020 bond, they were anticipating at least a $1.5 million surplus in construction funds and yet still went ahead with the additional borrowing. Why? Sloat suggested that they borrowed the extra money to be able to make the debt payments for the next few years. In the August 2021 budget work session, Sloat indicated that they would need more than $700,000 in additional funds each year in order to make the debt payments. The way the school board did all this borrowing leaves me feeling frustrated. In a series of town halls in 2015 and 2016, school leaders presented plans for $50 million in construction, but then the school board borrowed nearly twice that amount. They sold the land the schools are built on to a building corporation with a lease agreement as a legal loophole to get around state debt limits and borrow much more than they would have otherwise been able to, all without telling the public.
7:16 Pettibone said that the average daily membership (ADM) count on 9/17 was 2,253 students. In 2020 it was 2,258 and in 2019 it was 2,342. He said we are down 89 students since 2019. He said that the board and staff need to discuss the consequences of this drop of enrollment and potential solutions. I appreciate Pettibone’s straightforward discussion of the drop in enrollment and his position that we should be concerned and look for solutions. I hope to hear from the school board and administrators about what they are going to do to address the concerns of parents who are choosing to take their students out of our schools, either to home school or to attend another school district.
Pettibone also shared an update on Covid. He said that he talks with the 2 corporation doctors regularly and that our case numbers have been minimal. He complimented the staff and families for this success. He also said that the official WLCSC policy is to only accept Covid test results from doctors’ offices and clinics (not at-home tests) per the recommendation from the Indiana Health Department. He shared that our doctors recommend that we continue to increase vaccination rates and also shared that the vaccine from Pfizer for ages 5-11 will have a hearing on October 26th and so is nearing approval. He addressed the possibility of a national vaccine mandate for all organizations with 100 or more employees, but said that it is just a proposal and has not been finalized. He is talking with school leaders about how to proceed if it is finalized.
7:22 Springer shared a brief update on the superintendent search. She said they had the first round of interviews, which included 7 candidates, and are getting ready for the second round. She said they would not be ready by the November school board meeting to announce their hiring as originally planned but that they are still planning on having the new superintendent in place by January 2022. I still don’t understand this timeline; most superintendents start in the summer. Also, I am still shocked that the school board is evaluating candidates without the help of a hiring committee. For the prior searches for a superintendent, they appointed a hiring committee with teachers and community members to help provide them with input. I don’t understand why this school board thinks that they don’t need input. The school board not seeking input over the past few years on a variety of important school issues has caused a lot of dissatisfaction among teachers, students, and community members. The limited knowledge the 7 school board members have of what happens behind the scenes in our schools is reason enough that they should want teacher input in this major decision. It is going to have a direct impact on our teachers’ work environment and the learning environment for our students.
7:23 Sloat asked for approval to have the pool drainage pipe repaired as they discussed in the construction updates (6:57). This would come with a 10 year warranty.
Voted 7 out of 7
7:24 Ohlhaut asked for a motion to approve an addendum to the facility use agreement for the Purdue Swim Club. He said the Purdue Swim Club would use the aquatics center for practice and this addendum would include hours as well Covid restrictions. There was no discussion. Unfortunately, the school board does not share their packet of documents so the community has no way to know the details of this addendum. In a post, I discuss the school board’s misuse of confidentiality as a way to try to prevent the community from observing their actions.
Voted 7 out of 7
7:25 Ohlhaut shared information about a possible Health Clinic for WLCSC staff and families. TSC and LSC provide access to health care at their clinic for free routine care and this helps to reduce their overall costs. Ohlhaut said that he is working with WLEA to get teacher input on this possibility. One option is to partner with TSC and LSC and use Proactive MD. Another option is to use Everside Health which is used by WL City employees. The goal is to bring a proposal to the November meeting. Witt asked if this will change the health plan and Ohlhaut said it would not change the health plan but would give staff the option to have free routine care without copays. He said it would cost the school more to participate in the Health Clinic but hopefully would reduce costs in the long run. Witt asked that they bring cost-benefit projections to the next meeting and Ohlhaut said he will do that. Yin asked about the doctors that would be used and Ohlhaut said that the company will indicate what type of providers (doctors or nurse practitioners) they would use. A health clinic was something teachers were interested in back when I was teaching at WLES and I am grateful that Ohlhaut is pursuing this possible option.
7:30 Pettibone asked for approval of donations from an anonymous donor to the WLIS Principal’s Discretionary Fund for $2500 and another gift of $3000 for football headsets. Yin commented that she appreciated the donations and also appreciated that the donors names were listed in last-month’s school board minutes and asked Karpick for this to be continued. Karpick acknowledged her request. Yin has been advocating for donors to be recognized and unfortunately got pushback at several meetings. I am happy that they listened to her and made this change.
Voted 7 out of 7
7:31 Karpick asked for approval of the Personnel Report. He commented that this is Mark Boyd’s last school board meeting and appreciated his 18 years of service. For the second month in a row the personnel report was posted to the school’s website the day after the meeting! This is a huge improvement. In the past, the school board considered the personnel report confidential for one month after their vote to approve it. So this is progress, but I continue to hope that they will realize that the community expects them to share what they are voting on before they vote to approve it.
Voted 6 out of 6 (Marley abstained because his wife is a school employee and was on the personnel report)
7:33 Ohlhaut asked for approval of the accounts payable. Witt apologized that she didn’t ask in advance but said she was curious about the refunds for lunch accounts and wondered if the amount would increase at graduation time. Ohlhaut said he would find out. Witt’s apology for not having asked before the meeting just demonstrates the tradition in our district for school board members to ask their questions behind closed doors. Since the recent superintendent change, we have seen more open discussion and questions at school board meetings than ever before and I hope this move towards more transparency continues. I love hearing the school board questions and discussions. The accounts payable report was also posted to the school website for the 2nd month in a row. In the past, the only way community members could see the accounts payable report was through a public access request, which I submitted every month.
Voted 7 out of 7
7:36 Board Reports
- Park Board – Springer reported that they had some class options that are available on their website.
- GLASS – Springer said that the GLASS decentralization took place in 3 phases and that 2021-2022 was a pause year for them to evaluate.
- Negotiations – Karpick said they are working on negotiations
- Redevelopment – Marley said that there are a lot of streets under construction in WL right now. Witt asked if this affected school bus routes and Sloat responded that it has not changed the bus schedules.
I was disappointed that there was no report from the communications committee. It wasn’t even listed on the agenda. Yin and Austin both advocated for increased communication with the community. The communication committee was started in February 2021 with Karpick, Yin, and Austin as members, but nothing ever happened. I hope they have not given up on trying to increase communication between the school board and the community.
7:39 Karpick adjourned the meeting and said next month they would be moving back to the Happy Hollow LGI room.
Location: West Lafayette Intermediate School
Streaming: WLCSC Board Meeting 10/04/2021 Unfortunately the sound for Karpick did not work. Boyd brought him another microphone but that also did not work.
Attendance: 7 of 7 School Board Members (Yue Yin, Alan Karpick, Karen Springer, Bradley Marley, Thomas Schott, Rachel Witt, Amy Austin); Ross Sloat, Interim CFO; Stephen Ohlhaut, Assistant to the CFO; Robert Reiling, Jr., Lawyer; Michael Pettibone, Interim Superintendent
Audience: Administrators, a few parents and teachers, WLFI with camera
Future Meetings (calendar link)
Monday, November 1st at 6:30pm at Happy Hollow LGI Room This is not the official minutes from the school board meetings. I am a parent of WLCSC students and my thoughts are given in italics. The official minutes are released after the approval of those minutes at the next school board meeting (1 month from now). Previous agendas, minutes, and audio recordings can be found at the WLCSC website.
Dacia Mumford 