Community Unit District 300 officials are weighing how to pay for a new administration building if an expected $35 million to $60 million the state owes them doesn't come through by the end of the year.
Wednesday night, the finance committee discussed the merits of using debt certificates versus borrowing the money from within the district's budget to cover the building. Debt certificates are interest-bearing bonds that do not require a referendum.
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"If we don't anticipate receiving that money by December, this is our backup plan," Chief Financial Officer Susan Harkin said of the options.
Officials have estimated they would need about $3.2 million to pay for the building, but the true cost of the project won't be finalized until Monday once the school board accepts bids for its final phase of construction. Officials have estimated the building could range between $5 million and $5.5 million.
The district already has about $2 million left over in debt certificates it issued last year to cover parking lot and mechanical projects that it could put toward the project.
On the upside, using debt certificates or money from within its own budget would not raise the tax rate, which means taxpayers wouldn't be on the hook for additional cash, Harkin said.
In both cases the district would pay the resulting debt with money from the existing budget, preferably with the money the state already owes, she said.
While borrowing money from the district's coffers wouldn't come with any interest fees, its fund balances would be lower than what officials have already outlined for the agency that rates its bonds. That factor could negatively affect the district's bond rating, Harkin said.
The second option, borrowing the money with debt certificates, comes with interest charges, but the district could call the certificates off at any time once the money from the state comes through. The fund balances would still look good to the bond rating agencies.
The district was due to receive money from a state school construction grant in 2004 for a shortage of classroom space from population growth in the 2000s. The district instead used money from a referendum to resolve those issues.
Last week, the board approved a resolution to ratchet up ongoing efforts to collect the missing cash.
Meanwhile, the new administration building near Jacobs High School in Algonquin is expected to be completed in December. Construction is already underway on its foundation, Trustee Joe Stevens said.