Vigo County presenters outline $160 million illustrative financing to keep levy steady

Kristen McLeod, bond counsel at Ice Miller, told the Vigo County oversight board that school corporations have two primary funds for capital work: the operations fund (now consolidated and under pressure) and the debt‑service fund, which is supported by property‑tax levies and is the only fund schools may use for borrowing.

"The only way they can borrow is through the debt service fund, which are property tax levies," McLeod said, emphasizing that unlike counties or cities, schools generally cannot pledge future non‑property tax revenues to secure bonds.

That legal constraint helped frame an illustrative financing model presented by Jason Ganzler, a school financial adviser with Fayette Utility. Ganzler described a three‑year program with issuances of roughly $40 million in year one, $80 million in year two and $40 million in year three—totaling an illustrative $160 million—structured with terms that would not exceed 20 years for any single issue. Using an illustrative market assumption of about 4.63 percent, the presentation showed total interest costs in the neighborhood of $91.3 million under that scenario.

Ganzler said the scenario was designed specifically to keep the district’s annual debt‑service levy amount essentially unchanged from current levy requests. "We would not be estimating the increase to that levy amount," he said, noting the slides showed the levy request near $13,000,000.

Board members pressed for details on issuance costs, fee treatment and structural features that affect pricing. Presenters said estimated issuance costs would include underwriter discounts, municipal advisory fees and rating fees and that all hard and soft project costs plus issuance costs must be included in the total approved borrowing amount.

Legal and administrative limits were emphasized: McLeod described changes introduced by 2023 legislation and Senate Enrolled Act 1 that can force a capital project onto a referendum ballot if a district’s debt‑service tax rate exceeds the legislated threshold (changed from 80¢ to 70¢). Presenters noted Vigo County Schools’ current debt‑service rate is below that threshold and that referendum language is tightly prescribed by statute and must be certified by the Department of Local Government Finance and the county election board; ballots are now limited to November general elections in even‑numbered years under recent changes.

Presenters also described how the timing of issuance affects when tax bills reflect new debt: an issue sold in 2026 typically shows on tax rolls in 2027. They said the board could seek county participation (for example, Local Income Tax‑backed financing) or private pledges to increase total capacity while keeping the school corporation’s levy stable. Presenters cautioned that any borrowing above the illustrative program would require increasing the levy and therefore could trigger a referendum.

The oversight team concluded by promising a consolidated summary tying enrollment, facility needs, budget realities and the financing model into a single document for a future meeting. The board agreed to schedule further review and additional financial presentations.