The Riverside-Brookfield High School District 208 Board of Education on Sept. 12 likely will decide whether to issue $5 million in new bonds.
Superintendent Kevin Skinkis has recommended that the board sell $2 million in life-safety bonds to fund physical plant upgrades at the school over the next seven years and to also consider whether to sell $3 million in working cash bonds to take advantage of low interest rates.
The school board may also choose to take advantage of low interest rates to refinance bonds issued for the 2006 building renovation/expansion project.
Because of the savings for refinancing the existing bonds, the cost for issuing the working cash bonds would be minimal compared to what taxpayers are paying now, officials said.
On Aug. 8, the school district’s financial advisor presented a variety of alternatives for the board to consider.
If the district refinanced the 2006 bonds without issuing any new bonds, the owner of a home worth $350,000 would save about $36 annually in property tax payments over the next seven years, according the financial projections presented at the board meeting.
If the district refinanced the 2006 bonds and issued $2 million in life-safety bonds, the owner of a home worth $350,000 would pay an additional $2 in property taxes for the next seven years, before experiencing a savings of $36 per year for three years.
If the district issued $3 million in 10-year tax-exempt working cash bonds along with $2 million in life-safety bonds, the owner of a home worth $350,000 would pay an additional $34 a year in property taxes for the next 10 years.
The proceeds of tax-exempt working cash bonds can only be used for capital expenses. The school board could instead issue taxable working cash bonds, the proceeds of which can be used for any purpose, instead of tax exempt bonds. Taxable bonds carry a higher interest rate to attract investors and would cost taxpayers more to pay off.
Any plan to issue working cash bonds would be subject to a so called back-door referendum. If 10 percent of the registered voters in District 208, or about 2,000, signed petitions, they could force a referendum at the next election to vote on whether the working cash bonds should be issued.
If the necessary number of signatures are not gathered, the bond issue would go forward without a referendum.
Although District 208 currently has healthy reserves of about 45 percent of annual operating expenditures, Skinkis said that selling working cash bonds would give the district more financial flexibility to the take advantage of any opportunities for land acquisition that might arise and to deal with uncertainties about state funding.