Knox Clerk-Treasurer Jeff Houston told city council members of a potential impact Knox Community School’s bond pursuance may have on the city’s budget.
At Tuesday’s meeting, Houston told members he was under the impression the school’s bond may affect the city’s circuit breaker tax caps but he wasn’t sure about how much of an impact it would have.
He explained that the Knox School Corporation has recently been going through a process similar to what the city did when they took on community center renovations where a bond is set up through a separate building corporation that then leases the building back to the entity.
He spoke with the city’s field representative with the Department of Local Government Finance, the County Auditor and Knox’s financial advisor at Umbaugh and Associates to see what kind of potential impact the nearly $5 million bond would have on the city’s circuit breaker tax caps. At the meeting, he hadn’t received any feedback about his inquiries.
Since the meeting, Houston has spoken with John Julian from Umbaugh and Associates who told him the school’s bond will not have as much of an impact as he was anticipating.
Julian explained that this is because they will simply be replacing a bond that will soon be paid off with this new one, meaning there will be little change to what the city receives or what their tax cap limits would be.
However, Houston said that Julian did mention the city’s budget may see an impact in 2020 due to the school corporation’s plans to consolidate several funds into one, which will result in some of their accounts shifting from fixed to floating.