The Urban County Council is hearing the first reading Thursday of a proposal to issue $14.5M in bonds to fiannce Transylvania University’s new dorms.
Marc Matthews, Transylvania’s vice president for finance, says the university could go straight to a bank and have it issue the debt, but only the city is authorized to issue tax-free bonds. Still, Lexington would not be on the hook if the university fails to generate the necessary funds.
"Transylvania is 100 percent responsible for the payment of the debt. If we don't pay the debt, no one pays the debt. The city never comes into play. They're not a gaurantor," Matthews says.
Under the plan, the liberal arts school would repay the debt by way of revenue generated by the dorms.
Like the University of Kentucky, Transylvania is embarking on efforts to modernize its residence halls. Next Friday marks the official groundbreaking for the first dorm, which is set to open next fall.