Council reviews Nappanee Public Library bond proposal; advisers estimate about $4.7M in bonds and a roughly 5¢ tax-rate impact

The Elkhart County Council held a binding review of the Nappanee Public Library’s proposed 2026 budget after advisers told the council the library’s levy would exceed the state’s 4% growth quotient because the library plans to issue bonds totaling about $4.7 million.

Paige Sansone, municipal advisor with Baker Tilly Municipal Advisors, told the council that under state law a library whose budget exceeds the levy growth quotient must come before the county for a binding review because library boards are not elected. Sansone said the projected growth quotient for 2026 is 4% and that issuing bonds would raise the library’s budget from a typical level of about $2.5 million to roughly $3.0 million.

Lisa Huntington of Baker Tilly, who assisted with the library’s financing information, estimated an approximate tax-rate increase of about 5¢ for debt service. Huntington said the bonds are expected to be property-tax supported and that while increases in circuit-breaker and homestead tax credits can reduce levies, the library may use an allowed 15% cash reserve to absorb larger circuit-breaker losses.

Sarah Carrell, bond counsel with Ice Miller, explained the statutory basis for which local body conducts the binding review: the statute uses parcel counts, not total assessed value, to determine jurisdiction. Carrell said the library’s service area includes parcels in Kosciusko County and Union Township; the transcript records 607 parcels in unincorporated Kosciusko County and 1,648 parcels in unincorporated Union Township, so the town’s council would normally handle a review if it were the major parcel holder, but because of the parcel distribution the county council serves as the major county and is conducting the binding review.

Carrell also described a statutory consequence of withholding approval: "You could choose to not approve the budget," she said, and noted that the library could still be authorized to issue bonds. "In theory, they could issue the bonds and just let the money sit there because the bonds are approved. They can issue them. They just can't spend them," Carrell said, characterizing that outcome as an inefficient statutory process.

Council members asked questions about cash-flow projections and how SB 1, circuit-breaker credits and homestead credits might affect levy calculations; Baker Tilly representatives said they had performed projections and expected sufficient revenue to cover debt service but acknowledged that tax-credit changes could affect levy pressure. The council closed the public hearing by voice vote and agreed to consider the Nappanee Public Library budget during the council’s planned first- and second-reading and adoption process.