The Whitman-Hanson Regional School District Transparency Project

From: "Jeffrey Szymaniak <jeffrey.szymaniak@whrsd.org>" <jeffrey.szymaniak@whrsd.org> To: George; Beth; Hillary; Frederick; Ottina.Kathleen Bcc: hillary.kniffen@whrsd.org Date: 2024-06-21 12:37 Subject: WMS building project Hi Fred and Kathleen, as chair and vice chair of the WMS building committee I wanted to keep you updated as to questions that I have to respond to. I also want to invite you to a meeting on Wednesday at 11am with MaryBeth and her team to review this information. I received these questions this morning from SC member Byers. I have responded to her along with Hillary and Beth. Can you provide an update on the status of the FY22 and FY23 audits and how the WMS ban borrowing is impacted by these? I've been told that Whitman TA Mary Beth Carter has said there is a problem with the WMS Ban. The debt of $240,000 submitted by the WHRSC for May town meeting was based on 6Mil and 4% interest, however the borrowing has actually been done for $8Mil at 5% interest, generating a debt of $431,000. This is $199K more than the approved $240K the town is authorized to raise. John answers questions specifically about the BAN and WMS project. FY22 audit is still ongoing. We have made a progress payment on the audit and the auditors have all 85 documents that they initially requested. The fixed assets are completed and the OPEB update has been done. The auditors have asked me to enter more data into the FY22 MUNIS report system and then send it back to them. I will do that today or Monday. They have also asked to meet with Gideon to go over the new safeguards we have to ward off another cyber attack. FY23 audit can't be started until FY22 is completed. We will have to create the FY23 MUNIS environment in much the same way that we had to create FY22; manually with a lot of keystrokes. It may be as time-consuming as FY22 was. The day after the FY22 audit is completed, the FY23 audit should begin. The lack of an FY22 audit at borrowing time probably raised the interest rate by an unknown "risk premium" and limited the bidders for our debt. That "risk premium" will continue on any of our debt issuances until we complete the FY22 and FY23 audits. It probably makes sense to have someone solely focused on getting these audits completed before September 30th. The $6M and 4% were estimates. Those estimates came from a December joint meeting with Whitman and that is what I presented in the FY25 budget. The District Treasurer later determined that $8M was needed to fund the project and that was what we borrowed. I believe that he and our Financial Advisor looked at the updated cash flow forecast from Colliers and adjusted the amount based on the cash flow. The additional interest (over the $240,000) is due on May 1st, 2025. The additional interest can be appropriated at a Fall Town Meeting with the funding source of "taxation" or "raise and appropriate" because this is a debt-excluded project. The $240,000 portion of the interest is payable ratably over the fiscal year in quarters. The additional interest is due when the bond anticipation note matures. Please see Articles 2 and 3 of the October 30, 2023 Whitman Special Town Meeting as to how the Town votes to fund a budget line that was insufficiently funded at the Annual Town Meeting. The Town will not have to add to the overall costs of the project due to cost overruns as occurred in Article 14 of the same Special Town Meeting. For FY26 Budgeting, perhaps the estimate given in the budget documents should be much higher than what is anticipated. That is the only way to make sure that an appropriation always covers what eventually is borrowed. For example, if everyone agrees that $20M is to be borrowed at 5%, we should put in the FY26 budget $30M at 7%. That way, the appropriation will be able to cover whatever happens at the bond auction or with the cash flow of the project. I have never done that ever, anywhere because that seems dishonest and inaccurate to me. But perhaps, that may be what is needed here in this District. Have a good weekend, Jeff Jeff Szymaniak Superintendent Whitman-Hanson RSD @WH_Super Semper Ad Maiora Whitman Hanson Regional School District (WHRSD) has a commitment to maintaining a workplace and educational environment where discrimination on the basis of race, color, national origin, languages, religion, sex, disability, age, sexual orientation, gender identity or expression, pregnancy and pregnancy-related medical conditions are not tolerated. WHRSD does not allow discrimination or harassment against students based on homelessness or limited English-speaking ability. The Secretary of the Commonwealth of Massachusetts has determined that email is a public record. 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