The average homeowner in Naperville Unit District 203 will not be refunded about $95 in property taxes this year, giving the district about $3 million it will use to pay back a loan early, board members decided Monday night.
Six of seven board members supported the move to keep the tax revenue in an attempt to provide long-term savings for taxpayers.
Keeping the funding and putting it toward early repayment of a $10 million loan that's set to cost the district a total of $17.29 million by 2028 could save nearly $5 million in interest, Chief Financial Officer Brad Cauffman said.
Voters in 2008 authorized the district to levy annually for the $3 million to help support loans of $10 million and $33 million for facilities work at several schools. Four of the past five years, the district has returned the tax to property owners, amounting to roughly $95 for the owner of a $375,000 home, which is the average in the district.
But all board members except Donna Wandke voted in favor of retaining the funding this year when it is collected with property taxes payable in June and September.
"This way we're putting some money in the bank to be able to put toward paying off the bonds and not having to tap so much of our reserves," board member Terry Fielden said.
Superintendent Dan Bridges said the $3 million in tax revenue will be earmarked specifically to help pay back the $10 million loan early to save on interest payments.
"I think it's a very sound fiscal decision to let that levy be collected this year for the sole purposes of repaying the debt," board President Jackie Romberg said.
At one point, administrators proposed keeping the tax revenue and using it either for paying off the loan or for facilities improvements at schools if an early repayment plan could not be reached.
But Bridges and Cauffman, who discussed the district's proposal to keep the tax last week with the legislative committee of the Naperville Area Chamber of Commerce, revised the plan to dedicate the funding solely toward reducing the debt.
The chamber endorsed the district's decision in a letter Monday from President and CEO Nicki Anderson.
"We commend the district for proactively looking to reduce interest payments and reduce outstanding debt levels," Anderson said in the letter. "Every dollar that can be saved in interest payments is another dollar that can be invested in our students or returned to the taxpayers."