Chesterton Tribune

 

 

Fractional property tax rate hike after Board OKs debt payment transfer

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By KEVIN NEVERS

Duneland School Corporation (DSC) property-taxpayers will see a fractional increase in their bills, beginning in 2019, following the School Board’s action at its meeting Monday night to transfer payments on an outstanding $4.22 million lease-purchase agreement--currently being made through the Capital Projects Fund--to the Debt Service Fund.

That move is projected to increase a taxpayer’s dedicated debt-service rate by a maximum of $0.024, declining to $0.0139 by the final year, in 2024.

Thus, in 2019, the owner of a home with an assessed value of $100,000--after standard, supplemental homestead, and mortgage deductions--will pay about $7.86 more per year; the owner of a home with an AV of $150,000, about $15.66 more; and the owner of a home with an AV of $250,000, about $31.26 more.

By 2024, the owner of a home with an assessed value of $100,000 will pay about $4.55 more per year; the owner of a home with an AV of $150,00, about $9.07 more; and the owner of a home with an AV of $250,000, about $18.10 more.

The original lease-purchase agreement dates to 2009, when DSC undertook a package of district-wide energy-efficiency projects. The total cost of the package: $9,304,254, to be re-paid over 15 years at an annual interest rate of 1.6 percent. As Superintendent Ginger Bolinger noted at Monday’s meeting, “This financing arrangement was attractive to investors (at the time) because it came with an annual federal tax credit savings to the investor,” made possible through a federal program “put in place with the intent to revitalize and help jump-start the U.S. economy.”

Re-payment on the package began in 2010 and since then those re-payments have been made through the Capital Projects Fund, not the Debt Service Fund, which was still paying down on the $13.9 million in emergency loans secured by DSC in the wake of the Bethlehem Steel Corporation bankruptcy in 2002. Those loans were necessary, Bolinger said, because the bankruptcy “immediately affected Duneland’s receipt of property-tax revenue without a viable replacement for it and no opportunity to instantaneously reduce, limit, or adjust expenditures as a result.”

Those emergency loans were retired in 2013 and since that time, Bolinger said, some other debt has been retired as well: Pension Severance Bonds and Liberty Elementary Additional General Obligation Bond. Those debt-service retirements prompted DSC to “consider converting the remaining $4.2 million” on the lease-purchase agreement through the Debt Service Fund through the balance of the term, 2019-24.

“The payment conversion is not absolutely tax-rate neutral,” Bolinger noted. “However, it is relatively minimal at an estimated maximum impact of $0.024. As the existing debt matures, the estimated impact also declines to approximately $0.0139.”

The School Board voted unanimously to approve the payment conversion recommended by Bolinger.

 

Posted 9/18/2018

 
 
 
 

 

 

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