Eastern to spend $2.5 million to continue athletic complex project
Sep. 27—GREENTOWN — Eastern will take out about $2.5 million in general obligation bonds, with the intention of putting that money toward developing its off-campus athletic complex.
Construction is ongoing at the complex along South 850 East, just south of the town limits. Crews are working on completing a new support building which will include locker rooms, concessions and storage space. The first phase of the project also includes more parking and new tennis courts.
Tennis will move from its current location to the off-campus site when that phase of construction is complete. The 40-acre site hosts only soccer, for now.
The first phase of the $20-million project also includes a new fieldhouse at the high school. It will connect to the pool, which is undergoing an overhaul. These facets are under construction.
Eastern officials are still determining the scope of the $2.5 million.
"The plan, as of today, is to continue with progress out there," said business manager Travis Hueston. "We're trying to decide what's best from a common-sense approach."
It's the first time in years Eastern has issued general obligation bonds, commonly referred to as GO bonds.
The school corporation is in a financial position to take on the bonds without raising the tax rate, which is why Eastern is doing it now.
A GO bond is a financing mechanism schools use to afford projects. They are more streamlined than lease bonds, which is how Eastern is financing the bulk of its athletic complex project.
With the latter, a third-party entity called a building corporation takes on the debt, but the school district pays it off. It is essentially a legal workaround, a pass through of sorts, that allows a school corporation to finance high-dollar projects, despite being limited on how much debt it can have on its books.
A GO bond is much simpler. The school corporation itself assumes the debt of a GO bond. They are also less time consuming (preparation, process) than lease bonds.
Schools are limited on how much in general obligation bond debt they can take on. That threshold is the either 1% of gross assessed value within a school district or the max levy growth quotient, a figure determined by the Department of Local Government Finance, which ever one is lower.
Eastern's $2.5 million is under the threshold, according to Hueston.
If Eastern chose not to take on the GO bonds, the tax rate would fall. Most school corporations tend to take on debt in this instance to keep a stable tax rate.
The philosophy held by many school officials is that keeping the tax rate stable is preferred over letting the rate drop then asking taxpayers for more money in the future.
"I don't like the tax rate to be bouncing around," Hueston said. "It's just trying to be consistent, more than anything."
Spencer Durham can be reached at 765-454-8598, by email at spencer.durham@kokomotribune.com or on Twitter at @Durham_KT.
