An Executive Committee meeting of the Ball State University Board of Trustees on Saturday passed a resolution that could save the university up to $500,000.
The committee passed with a unanimous vote a resolution that will turn $30 million of Series O bonds from "tax exempt" to "bank qualified." This change in status will allow financial institutions to deduct their interest expense on the bonds and make them more attractive to potential buyers, creating increased demand and potentially lower interest rates.
The result is a savings of $130,000 to $500,000 for Ball State this year.
The $30 million from the bonds will allow the university to proceed with building the new Student Recreation and Wellness Facility. The project will also be funded by $10 million in additional gifts.
The signing of the American Recovery and Reimbursement Act by President Barack Obama Feb. 17 allowed Saturday's meeting to occur. The act allowed the university to raise the amount of bank qualified bonds from $10 million to $30 million.
Randy Howard, associate vice president of finance and assistant treasurer, said he was not surprised with the result of the meeting.
"There is no downside to this," Howard said.
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