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Michigan City Area Schools holds preliminary hearing on $185.55 million bond plan
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Summary
At a preliminary determination hearing, district leaders outlined a proposed $185,550,000 bond to renovate classrooms and K–8 facilities, with presenters saying the plan is structured to avoid increasing the debt service levy above 2026 levels and will be phased over multiple bond series.
The Michigan City Area Schools Board of Trustees held a preliminary determination hearing on April 28 to review a proposed $185,550,000 bond package intended to renovate classrooms across the district and fund K–8 building improvements.
Superintendent Dr. McCollum said the proposal grew from more than three years of strategic planning and community feedback and introduced project and finance presenters. Kevin Maguire described the scope as district-wide: "Every classroom in the district will be touched," he said, noting planned consolidations affecting Lake Hills and Pine and improvements to athletic facilities and an event center already scheduled for a May 14 ribbon-cutting.
Jason Tansel, director with municipal adviser Baker Tilly, reviewed the financing framework. He said the board would establish maximums the district cannot exceed: a borrowing cap of $185,550,000, repayment terms not to exceed 20 years for each series, and a maximum interest rate of 7 percent. Tansel said estimated interest costs are "roughly $112,000,000" under a 5 percent assumption and described a possible three-series issuance — roughly $80 million in 2026, another $80 million in 2027 and about $25.55 million in 2028 — designed to align bond sales with construction cash needs. He added the district is positioned to issue the bonds "without increasing its debt service levy above 2026 levels," and that the maximum annual payment would be capped at $15,806,000.
A board member framed the proposal as tax-neutral, praising the board's historical stewardship and noting neighboring districts run considerably higher debt service rates. A staff speaker clarified that bond proceeds cannot be used for operating expenses such as salaries.
The preliminary hearing does not authorize borrowing; it is the first formal step in a process that will include additional public hearings and legal notices before any bond sale. Board members and presenters said additional meetings and technical steps are required before the board could adopt final parameters or sell bonds.
The board closed the preliminary determination hearing and moved into its regular meeting; presenters and staff said more public engagement and subsequent hearings will follow before any borrowing occurs.
