The Knox School Board continues making financial arrangements for the school corporation’s $5 million facility improvement project.
Last week, the school board passed a series of three resolutions allowing school officials to issue bonds to pay for the work. Those bonds are issued by a legally-separate entity called the Knox Middle School Building Corporation. It technically owns certain school buildings and then leases them to the school corporation.
As part of the process, the Knox School Board voted to execute a second amendment to the lease agreement. “This second amendment is the agreement whereby the school corporation will levy the required property tax to pay the lease payments,” explained Superintendent Dr. William Reichhart. “The lease payments will be paid to the building corporation and used to pay the bond holders. Without the lease, bond holders will have no assurance that the building corporation will repay the bonds. The second amendment is the mechanism by which the property tax collections can get to the bond holders.”
Board members also adopted a resolution assigning construction contracts to the building corporation. Reichhart explained that the school corporation will award construction bids and contracts. But since the building corporation will technically be the one paying for the work with the bond proceeds, those bids and contracts need to be assigned to the building corporation. In the third resolution approved by the school board, the school corporation agrees to provide required information to the Securities and Exchange Commission.
No comments were offered during a public hearing on the lease amendment. The Knox Middle School Building Corporation Committee then convened its own meeting and voted to issue the bonds.
With those legal arrangements in place, school officials will now be able to focus on things like fixing leaky roofs. Reichhart explained that several garbage cans were being used to collect water around Knox High School.
