CHAPTER 3. BORROWING; INDIANAPOLIS PUBLIC SCHOOLS
IC 20-48-3
Chapter 3. Borrowing; Indianapolis Public Schools
IC 20-48-3-1
Application
Sec. 1. This chapter applies only to a school city to whichIC 20-25 applies.
As added by P.L.2-2006, SEC.171.
IC 20-48-3-2
"Board"
Sec. 2. As used in this chapter, "board" has the meaning set forthin IC 20-25-2-5.
As added by P.L.2-2006, SEC.171.
IC 20-48-3-3
"School city"
Sec. 3. As used in this chapter, "school city" has the meaning setforth in IC 20-25-2-12.
As added by P.L.2-2006, SEC.171.
IC 20-48-3-4
Powers; bonds; real property; improvements to real property
Sec. 4. (a) The board may periodically, as the need arises, borrowmoney and issue school building bonds to supply the school city withfunds:
(1) to buy real estate;
(2) to erect buildings for school or administrative purposes;
(3) to enlarge, remodel, and repair school buildings; or
(4) for one (1) or more of the purposes described insubdivisions (1) through (3).
The proceeds of the sale of bonds under this subsection may not beused for a purpose other than a purpose described in subdivisions (1)through (4).
(b) The board may periodically, as the need arises, issue schoolfunding bonds to take up and retire the principal and accrued interestof any outstanding bonds of the school city. School funding bondsmay be issued only if the board determines it is to the advantage ofthe school city to refund the outstanding bonds of the school city. Aschool funding bond may not be issued and the proceeds of a schoolfunding bond may not be used for a purpose other than to refund ortake up and discharge outstanding bonds of the school city. Anypreexisting bonds for which the school city is liable underIC 20-25-4, this chapter, or a predecessor law are outstanding bondsof the school city under this subsection.
(c) Before school building bonds may be issued under subsection(a), the board shall, by a resolution entered into the record in theboard's corporate minutes, demonstrate a particular need for themoney and the inability of the school city to supply the money fromany other applicable fund under the control of the board. Before
school funding bonds may be issued under subsection (b), the boardshall, by a resolution entered into the record of the board's corporateminutes, provide a description of the bonds to be taken up, includingthe kind, date, date of maturity, and amount of the bonds.
(d) Bonds issued under this section must:
(1) be serial bonds;
(2) bear interest at a rate payable semiannually; and
(3) mature at a time or times fixed in the resolution of theboard.
(e) A bond to be issued under this section may not be delivereduntil the price of the bond is paid to the treasurer of the school cityin:
(1) money for school building bonds; or
(2) money or bonds to be refunded for school funding bonds.
A bond issued under this section may not accrue interest before itsdelivery.
(f) A bond issued under this section must be payable to bearer andbe of the general form usual in municipal bonds.
(g) Before offering bonds authorized by this section for sale, theboard must give three (3) weeks notice of the date fixed for the saleof the bonds. The notice must include a description of the bonds andinvite bids for the bonds. The notice shall be given by three (3)advertisements, one (1) time each week for the three (3) consecutiveweeks immediately preceding the day of sale in a newspaperpublished and with a general circulation in Indianapolis. Notice mayalso be required in other advertisements if ordered by the board.
(h) The board shall sell the bonds to the highest and best bidderand has the right to reject any bid. The proceeds arising from the saleshall be used only for the purpose declared in the resolution of theboard.
As added by P.L.2-2006, SEC.171.
IC 20-48-3-5
Temporary loans
Sec. 5. (a) The board may, if the board's general fund is exhaustedor in the board's judgment is in danger of exhaustion, maketemporary loans for the use of the board's general fund to be paid outof the proceeds of taxes levied by the school city for the board'sgeneral fund. The amount borrowed for the general fund must bepaid into the board's general fund and may be used for any purposefor which the board's general fund lawfully may be used. Atemporary loan must:
(1) be evidenced by the promissory note or notes of the schoolcity;
(2) bear interest that is payable, according to the note or notes,periodically or at the maturity of the note or notes and at notmore than seven percent (7%) per annum; and
(3) mature at a time or times determined by the board, but notlater than one (1) year after the date of the note or notes.
Loans made in a calendar year may not be for a sum greater than the
amount estimated by the board as proceeds to be received by theboard from the levy of taxes made by the school city for the board'sgeneral fund. Successive loans may be made to aid the general fundin a calendar year, but the total amount of successive loansoutstanding at any time may not exceed the estimated proceeds oftaxes levied for the board's general fund.
(b) A loan under this section may not be made until notice askingfor bids is given by newspaper publication. Notice must be made one(1) time in a newspaper published in the school city at least seven (7)days before the time the bids for the loans will be opened. A biddershall name the amount of interest the bidder agrees to accept, notexceeding seven percent (7%) per annum. The loan shall be made tothe bidder or bidders bidding the lowest rate of interest. The note,notes, or warrants may not be delivered until the full price of the faceof the loan is paid to the treasurer of the school city, and interest doesnot accrue on the loan until delivery.
As added by P.L.2-2006, SEC.171.
IC 20-48-3-6
Temporary transfers; proceeds of bonds
Sec. 6. (a) A school city wishing to make a temporary loan for itsgeneral fund under this section may temporarily borrow money,without payment of interest, from the school city's treasury if theschool city has in its treasury money derived from the sale of bondsthat cannot or will not in the due course of the business of the schoolcity be expended in the near future. A school city shall, by its board,take the following steps required by law to obtain a temporary loanunder this section:
(1) Present to the department of local government finance andthe state board of accounts:
(A) a copy of the corporate action of the school cityconcerning the school city's desire to make a temporary loan;
(B) a petition showing the particular need for a temporaryloan;
(C) the amount and the date or dates when the general fundwill need the temporary loan or the installments of the loan;
(D) the date on which the loan and each installment of theloan will be needed;
(E) the estimated amounts from taxes to come into thegeneral fund;
(F) the dates when it is expected the proceeds of taxes willbe received by the school city for the general fund;
(G) the amount of money the school city has in each fundderived from the proceeds of the sale of bonds that cannot orwill not be expended in the near future; and
(H) a showing of when, to what extent, and why money inthe bond service fund will not be expended in the nearfuture.
(2) Request the department of local government finance and thestate board of accounts to authorize a temporary loan from the
bond service fund for the general fund.
(b) If:
(1) the department of local government finance finds and ordersthat there is need for a temporary loan and that it should bemade;
(2) the state board of accounts finds that the money proposed tobe borrowed will not be needed during the period of thetemporary loan by the fund from which it is to be borrowed; and
(3) the state board of accounts and the department of localgovernment finance approve the loan;
the business manager and treasurer of the school city shall, upon theapproval of the state board of accounts and the department of localgovernment finance, take all steps necessary to transfer the amountof the loans as a temporary loan from the fund to be borrowed fromto the general fund of the school city. The loan is a debt of the schoolcity chargeable against its constitutional debt limit.
(c) The state board of accounts and the department of localgovernment finance:
(1) may fix the total amount that may be borrowed on a petition;and
(2) shall determine:
(A) at what time or times;
(B) in what installments; and
(C) for what periods;
the money may be borrowed.
The treasurer and business manager of the school city, as money iscollected from taxes levied on behalf of the general fund, shall creditthe amount of money collected from taxes levied to the loan until theamount borrowed is fully repaid to the fund from which the loan wasmade. The treasurer and business manager of the school city shall atthe end of each calendar month report to the board the amountsapplied from taxes to the payment of the loan.
(d) The school city shall, as often as once a month, report to boththe state board of accounts and the department of local governmentfinance:
(1) the amount of money borrowed and unpaid;
(2) any anticipated similar borrowings for the current month;
(3) the amount left in the general fund; and
(4) the anticipated drafts on the bond service fund for thepurposes for which the fund was created.
(e) The state board of accounts and the department of localgovernment finance, or either acting independently:
(1) if it appears that the fund from which the loan was maderequires the repayment of all or part of the loan before maturity;or
(2) if the general fund no longer requires all or part of theproceeds of the loan;
may require the school city to repay all or part of the loan. A schoolcity shall, if necessary to repay all or part of a loan under thissubsection, exercise its power to obtain a temporary loan from others
under section 5 of this chapter to raise the money needed to repay thebond service fund the amount ordered repaid.
As added by P.L.2-2006, SEC.171.
IC 20-48-3-7
Requirements; repayment of obligations
Sec. 7. A school city shall provide for the payment and retirementof debt obligations of the school city in the manner provided underIC 20-46-7, IC 20-48-1-6, and IC 20-48-1-11.
As added by P.L.2-2006, SEC.171.
IC 20-48-3-8
Maximum obligation
Sec. 8. (a) The board may not create debt exceeding twenty-fivethousand dollars ($25,000) in total, except:
(1) as otherwise provided in IC 20-25-4 or this chapter; or
(2) for debts that exist after March 8, 1931, that are authorizedby the general school laws of Indiana, including debt incurredunder IC 21-4-20, IC 20-26-1, IC 20-26-2, IC 20-26-3,IC 20-26-4, IC 20-26-5, IC 20-26-7, and IC 20-41-1.
(b) Notwithstanding subsection (a), the board is liable for theboard's lawful contracts with persons rendering services andfurnishing materials incident to the ordinary current operations of theboard's schools if the contracts have been entered into as provided inthis chapter and in accordance with law. The obligations of the boardto persons rendering services or furnishing materials is not limited orprohibited by IC 20-25-4 or this chapter.
As added by P.L.2-2006, SEC.171.