If you live in Brookfield these days, the word referendum has gotten mighty familiar. And the reaction to it is also familiar.
“How much is this going to raise my taxes?”
With that in mind, Brookfield-LaGrange Park Elementary School District 95’s Board of Education is trying to figure out just how it might be able to soften the blow of constructing a new school building on the campus of S.E. Gross Middle School, which officials have initially estimated at a cost of $30 million.
“A $30 million bond referendum, what it does to the tax rate of the local taxpayer is probably is not realistic in terms of what the increase would be,” said District 95 Superintendent Mark Kuzniewski in a recent interview with the Landmark.
According to Kuzniewski, if the district simply went out for that kind of bond issue, the owner of a $300,000 home in Brookfield would pay roughly $760 annually in additional property taxes.
“So the question is, how do you approach that $30 million or whatever that amount is in a doable manner, so that each party has some skin in the game as well?” Kuzniewski said.
At the school board’s committee of the whole meeting on July 21, school board members got an idea of just how they might be able to that during a presentation by financial advisor Elizabeth Hennessy of William Blair.
Aside from the problem of selling a $30 million lump sum bond issue to voters, District 95 has another problem. State law caps the school district’s debt capacity at about $15.6 million based on the equalized assessed value of property within the school district, which serves the Proviso Township portion of Brookfield and LaGrange Park east of Kemman Avenue.
With a little less than $6 million in debt already on the books, that means District 95 can issue about $9.9 million in new debt without going over its debt ceiling. There are two ways for the district to hurdle that roadblock.
One is to convince the Illinois General Assembly to pass legislation allowing the school district to exceed its limit. The Brookfield Public Library was able to do this in advance of its referendum in November to fund a new library. The legislation still awaits the governor’s signature.
Or, the school district could exceed its debt limit by up to 15 percent if a successful referendum passes by more than 66.7 percent of votes cast.
The second scenario is risky, if not unlikely. The first has its issues as well. First, said Kuzniewski, legislation to allow the school district to exceed its debt limit would need to be attached to an existing bill. Second, it’s unclear how long the district might have to wait to find a sponsor to do that and how quickly the General Assembly would take to act on it.
“We see it as an unnecessary time frame for securing the funds,” Kuzniewski said.
The school district has identified the April 4, 2017 Consolidated Election as its preferred referendum date. That means it needs to have a question and an amount ready, realistically, by the end of 2016.
What appears to be likely, based on the presentation made to the school board in July, is that District 95 would try to avoid the debt limit problem by combining non-referendum funding sources with a bond issue that needs to be approved by voters.
If the cost for the construction of a new school building and significant renovations to existing buildings ends up being in the $30 million range, Kuzniewski said that the district could opt to use $5 million in cash reserves and issue $15 million in alternate revenue bonds, with the debt service paid by existing revenue sources, such as general state aid or any other existing funding source.
While such a strategy would force the school board to consider how to allocate remaining funds to deliver education services, it would allow the district to keep its referendum-based bond issue to right around $10 million.
The impact of a $10 million referendum on the owner of a $300,000 home in Brookfield would be about $250 annually.
“I believe while it would be tight, it’s doable,” said Kuzniewski. “But there will have to be some combination [of funding sources].”
The alternative to a new building in the district, said Kuzniewski, was bigger class sizes or more mobile classroom units.
“If the answer is still no, then the community will have sent a message about what they want their schools to look like,” Kuzniewski said.
The school board ought to have a clearer picture of exactly what cost estimates are for a new building and renovations to existing buildings this month, Kuzniewski said. The board’s buildings and ground committee was supposed to have gotten preliminary costs and plans on July 26, but that meeting was canceled. It has not been rescheduled as of yet.
It’s also unclear exactly when the school board is going to roll out the plan to the community, but Kuzniewski said that process has to start soon.
“There’s going to have to dialogue started with the community one way or another by mid-August, beginning of September, because we’re going to have to come together with a referendum question and design by … December sometime,” Kuzniewski said.