Riverside-Brookfield High School sold nearly $24 million in bonds last week. The bulk of the bond proceeds, nearly $20 million, are being used to refinance bonds issued in 2007 for the addition and renovation of RBHS.
Three million dollars in working cash bonds were also sold to give the district added financial flexibility as district officials try to work out a deal with the Brookfield Zoo and Cook County Forest Preserve District to give RBHS exclusive use of the ball fields just north of the school.
Selling the working cash bonds bolsters the district’s already healthy reserves and also gives the school district flexibility to deal with uncertainties regarding state funding.
In addition, the school district sold $1.86 million in life-safety bonds to finance state-mandated maintenance and repair work at RBHS.
The bonds were sold at blended interest rate of 2.46 percent said Elizabeth Hennessey, an investment banker for Raymond James Financial, the underwriter of the bond offerings.
Hennessey said refinancing the 2007 bonds will save taxpayers about $2.8 million, because interest rates are lower than they were the original bonds were sold.
However, because the district sold the working cash bonds, taxpayers will pay more in taxes to District 208 for the next seven years.
The school board voted 6 to 1 on Oct. 24 to issue seven-year working cash bonds instead of 10-year bonds to save on overall interest costs.
The owner of a home worth $350,000 should see their property tax bill increase by about $57 annually for the next four years as a result of issuing the new bonds at the same time as refinancing the existing bonds.
For three years after that, the owner of a $350,000 home should see the property tax bill increase by $54 over current levels. After the working cash bonds are paid off seven years from now, the RBHS portion of the property tax bill for a home worth $350,000 will decrease by $38 for the following three years.
The bonds were sold on Oct. 31. The district decided to wait nearly a week to sell its bonds because the state of Illinois was selling about $6 billion in bonds during the previous week.
“We had a better market to go into and aggressive pricing,” Hennessey said. “All the bonds were sold and we had more demand than we had bonds, so that’s always a good thing.”
William Smithing was the only board member who favored selling 10-year working cash bonds instead of the seven-year bonds. Selling 10-year bonds would have resulted in lower annual tax increases but in a greater overall cost to taxpayers, since it would have taken three years longer to pay off the bonds. The overall savings of issuing seven-year bonds instead 10-year bonds was about $270,000.
The District 208 bonds were rated AA+ by Standard and Poor’s, its second highest rating, illustrating the strong financial position of the district.
Superintendent Kevin Skinkis said Monday that he has not yet begun discussions with zoo and county officials about gaining exclusive use of the ball fields.
“I was waiting for the bond sale to be finalized, which just occurred last week,” Skinkis said in an email.
The subject had been discussed a few years ago, but the school and county officials did not reach an agreement.
Board members have said that if no deal is reached, the school board might abate the bond payments and use the proceeds to pay off the bonds, resulting in a lower tax bill for property owners.