Notice is hereby given pursuant to Indiana Code § 6-1.1-20-3.5 that the Board of School Trustees (the "Board") of Tippecanoe Valley School Corporation (the "School Corporation") did, on November 7, 2022, originally make a preliminary determination to issue bonds and enter into a lease agreement (the "Lease") for the 2022 Modernization, Improvement and Renovation Projects which include renovation of and improvements to the Tippecanoe Valley High School including site improvements and the purchase of equipment and technology (the "Projects"). On May 24, 2021, the Board held a second preliminary determination hearing and made a preliminary determination to fund the Projects with a maximum term of 21 years with a maximum annual Lease rental of $1,783,000. That maximum annual Lease rental had been estimated based upon an estimated principal amount of bonds of $16,210,000, estimated interest rates ranging from 2.50% to 4.75%, and total estimated interest costs of $8,958,269. The bonds to fund the Projects as authorized at the hearing on May 24, 2021 were issued on February 24, 2022. Construction bids were received and exceed the original estimated authorization.
The Board has held two additional hearings and increased the original financial terms as discussed at these hearings as provided in this notice. The Lease will be for a maximum term of 19 years from the execution of the amendment to lease with a maximum increase to the annual Lease rental of $1,358,000. The maximum annual Lease rental has been estimated based upon an estimated principal amount of additional bonds of $10,000,000, estimated interest rate of 5.00%, and total estimated additional interest costs of $6,839,333.
As required by Indiana Code § 6-1.1-20-3.5(b)(1), the following information was available to the public at the public hearings on the preliminary determination: (i) the School Corporation's current and projected annual debt service payments divided by the net assessed value of taxable property within the School Corporation, which is 6.64%; and (ii) the sum of the School Corporation's outstanding long term debt plus the outstanding long term debt of other taxing units that include any other territory of the School Corporation divided by the net assessed value of taxable property within the School Corporation, which is 7.36%.
The School Corporation's current debt service levy is $2,512,095 and the current rate is $0.4337. After the School Corporation enters into the proposed amendment to Lease and the supplemental bonds are issued, the debt service levy will increase by a maximum of an additional $1,358,000 and the debt service rate will increase by a maximum of $0.1855. However, as existing obligations mature, the anticipated increase to the Debt Service Fund tax rate for both the original bonds and these additional bonds is expected to be $0.0000.
The estimated amount of the School Corporation's debt service levy and rate that will result during the following 10 years if the School Corporation enters into the lease and issues the bonds, after considering any changes that will occur to the debt service levy and rate during that period on account of any outstanding bonds or lease obligations (including the original bonds issued for the Projects) that will mature or terminate during that period:
Year Estimated Total Estimated Total
Debt Service Levy Debt Service Rate
2023 $3,130,304 $0.4500
2024 3,130,304 0.4500
2025 3,130,304 0.4500
2026 3,130,304 0.4500
2027 3,130,304 0.4500
2028 3,130,304 0.4500
2029 3,130,304 0.4500
2030 3,130,304 0.4500
2031 3,130,304 0.4500
2032 3,044,742 0.4377
The purpose of the Amendment to Lease is to provide for balance of the cost of the Projects.
If a valid petition pursuant to Indiana Code § 6-1.1-20-3.5 is received within 30 days from the publication of this notice, the proposed additional debt service or additional Lease payments must be approved in an election on a local public question held under Indiana Code § 6-1.1-20-3.6. Such petition will not affect the authorization of the original financing as provided on May 24, 2021.
