U-46 closer to $20 million bond sale

Elgin Area School District U-46 has taken initial steps toward issuing up to $20 million in working cash bonds to cover capital improvement projects across the district.

The school board on Monday approved the scheduling of a public hearing on the proposed issuance for 7 p.m. Feb. 6 at the district offices, 355 E. Chicago Ave, Elgin.

District Chief Financial Officer Jeff King said the bonds would last the district three to four summers for projects such as roof repairs, parking lot improvements and air conditioning systems in buildings.

“By utilizing work cash versus life safety bonds, we can expand the projects we can fund to include parking lots, chillers and other items that cannot be funded by lifesaving bonds,” King said in a presentation to the board in December. “Also, using bonds will allow us to finance capital improvements and repairs without using operating funds necessary to pay salaries, benefits, services and supplies.”

Each year, the district will bring a resolution to the board to abate the amount of funds needed for the projects from the working cash fund to the operations and maintenance fund. That process will be repeated until the district has expended $20 million, King said.

The interest rate on the repayments will not be known until the bonds are sold in March, but King anticipated the new bonds would add about four years to the district’s debt repayment schedule.

The district last issued working cash bonds in early 2011 when it sold $23 million in bonds to cover its cash needs. At that time, the bonds were used to replenish the district’s working cash fund, which acts as a cash reserve to cover day-to-day operations like teacher salaries and heating bills.