As the Winamac Park Board considers various upgrades to the town’s park facilities, board members are also learning about potential funding sources. Eric Walsh with accounting firm Umbaugh and Associates met with the park board Thursday to outline the steps for issuing bonds.
He said that based on current conditions, the park board has the ability to raise about $380,000 through bonding. “So in Indiana, there’s kind of this double bonding capacity where the town has its own bonding capacity and the way you were structured under Indiana Code, you also have, basically, the exact same bonding capacity because you’re assessed value is the same as the town’s,” he explained. “So the first kind of hurdle you want to clear here is if you all issue bonds under your bonding capacity, you’re not using up the town’s bonding capacity. The still would have that intact.”
Walsh said bonds could be an important source of revenue, since there isn’t much leftover money in Winamac’s Park Fund. “If you do the bonding, the bonding creates a new tax rate, so it actually creates additional money over and above this,” he said. “It’s totally separate from the taxes you’re already getting as a park. It’s actually a new tax rate on top of what people already pay. So it’s a new revenue source to you, and that revenue source is solely to pay those bonds back. You can’t get that additional revenue source unless you have debt to pay on it.”
As for what impact a park bond would have on Winamac taxpayers, Walsh says it would likely mean a new property tax of about eight cents per $100 of assessed valuation. That’s if the park board decided to borrow the full $380,000, under current conditions. For an owner of a $100,000 home, that would probably amount to around $30 per year, according to Walsh.
However, he cautioned that issuing a bond requires planning, as there are some costs involved. “It doesn’t make sense to go do a bond issue for $50,000 because you’re going to pay attorney’s fees, bond counsel fees, financial advisory fees to go issue that money,” he said. “What I’d strongly encourage you to do is look at the next five to 10 years and say, ‘What all do we want to accomplish?’ Put all those together and then see does it make sense to actually borrow that money at one time and do them all together.”
The Winamac Park Board has been considering a bond issue as a potential way to pay for restroom upgrades in the town park, as well as other projects.