BOT Frequently Asked Questions

Common questions from Indiana mayors, town managers, council members, and superintendents about Build-Operate-Transfer.

Does BOT require a referendum?

Generally no. BOT agreements are structured as service or lease agreements — not bonded debt. Under Indiana law, most BOT structures don't trigger the referendum requirements that apply to general obligation bonds. The specifics depend on the agreement structure and the municipality's existing obligations. JBK works with municipal counsel to ensure the structure is compliant.

How does the municipality pay for a BOT project?

Through an annual service or lease payment over the operating period — typically 15 to 20 years. The payment structure is fixed in the BOT Agreement and is sized to fit within the municipality's existing revenue streams, typically without requiring new taxes or levies.

What happens if we can't make a payment?

The BOT Agreement includes provisions for payment default, including cure periods and remedies. This is a negotiated term — municipalities should have their own counsel review the agreement. JBK is transparent about default provisions and structures agreements to be workable, not punitive.

Who owns the building during the operating period?

JBK (or the project entity) holds ownership during the operating period. The municipality has full use and occupancy rights. At the end of the operating period, ownership transfers to the municipality.

Can we end the agreement early if we want to?

BOT agreements typically include buyout provisions that allow the municipality to purchase the facility before the end of the operating period. The buyout price reflects the outstanding obligation. This is a negotiated term.

What if the building needs major repairs during the operating period?

JBK is responsible for maintenance and capital upkeep during the operating period under the terms of the BOT Agreement. The agreement specifies maintenance standards and typically includes a capital reserve mechanism to fund major repairs without surprise costs to the municipality.

How is BOT different from a lease-purchase or lease-to-own?

BOT is authorized under Indiana IC § 5-23, which provides a specific statutory framework for the procurement and operation process. Lease-purchase arrangements are governed by different statutes and have different procurement requirements. BOT's key distinctions are the RFQ-based selection process and the developer's operational responsibility during the operating period.

Does the municipality have to use BOT just because they start the process?

No. The municipality can walk away at any stage before executing the BOT Agreement. There is no commitment until the agreement is signed. JBK structures the process to give the municipality full information — including the GMP — before any binding commitment is made.

Can BOT be used for school facilities?

Yes. Indiana IC § 5-23 applies to governmental bodies broadly, which includes school corporations. BOT for schools requires additional consideration of school finance statutes and may involve coordination with the Department of Local Government Finance. JBK has researched this lane extensively and works with school counsel on structure.

How do we know JBK is qualified to do this?

JBK has structured and delivered BOT agreements across Indiana and Southern Michigan. Our principal, Keith Plummer, is an Indiana-licensed attorney who drafts the BOT agreements directly — no outside legal markup on the developer side. Our construction affiliate, R. Yoder Construction, has an active portfolio of over $130M in public and commercial construction.