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Commission hears first reading for $55 million WKU conduit bonds; staff says no city obligation
Summary
The commission held a first (nonbinding) reading of an ordinance to authorize up to $55 million in conduit industrial building revenue bonds for the WKU Student Life Foundation; staff and bond counsel said the bonds are pass-through financing with no obligation by the city.
On first reading the Bowling Green City Commission considered Ordinance BG2025-30, which would authorize issuance of industrial building revenue bonds in an aggregate principal amount of $55,000,000 (with a permitted 10% upward adjustment) as conduit financing for WKU Student Life Foundation, Inc.
Bond counsel and city staff told commissioners the financing would be a conduit (pass-through) arrangement for the 501(c)(3) foundation and would not constitute debt of the city. "These are strictly a pass through. No obligation of the city whatsoever," Mark Rawlings said during his presentation. Commissioners and staff reiterated the city would not be on the hook if the foundation or underlying borrower defaulted.
Representatives said the notes are expected as a short-term construction financing instrument with a two-year final maturity and variable rate features, with the expectation of a long-term takeout before final maturity to more permanent financing or the university's announced public-private partnership options. Commissioners asked about oversight and whether the bond issuance would affect the city's ability to issue its own debt; staff said the foundation must use a conduit because it is not authorized to issue public debt itself.
The ordinance moved forward on first reading (nonbinding) and will return for second reading at a later date. City staff said more details about ultimate takeout financing and any public-private partnership arrangements would be provided as those items progress.
