U-46 considering tax levy increase, restructuring debt

Elgin Area School District U-46 officials are considering a 1.5 percent increase based on the Consumer Price Index for the 2014 property tax levy.

But taxes won't go up, if the district restructures existing bonded debt, Chief Operations Officer Jeff King told the school board Monday night.

"We're getting to a point (where) a lot of that (debt) is going to start coming due," King said. "The bond and interest portion of the levy is going to increase by 40 percent over the next seven years."

Restructuring would extend the debt another 20 years, reduce the burden on current taxpayers and "offset the 1.5 percent CPI levy that we are requesting for this school year," King said.

It would allow the district to sell roughly $40 million in working cash bonds to finance capital projects without increasing the yearly bond and interest rate, he added.

The district is seeking to levy roughly $264 million in property taxes for 2014 - a 2.54 percent increase from the previous year's extension, including the proposed 1.5 percent CPI increase.

If approved, the district will collect an additional $6.5 million in property taxes for 2014.

The school board is expected to adopt the proposed tax levy by Dec. 15.

Dale Burnidge, U-46 finance director, said the district was requesting larger levy increases five years ago. In 2010 and 2012, the tax levy increased more than 5 percent.

Officials are projecting a roughly 3 percent decline in property values - Kane County estimates a 2.5 percent decrease, while decreases for DuPage and Cook counties are yet unknown, Burnidge said.

The value of new properties being added to the tax rolls could total an estimated $25 million. Last year's actual value of new properties was $15 million, officials said.

"We have had very little new construction coming on in the past few years," Burnidge said.

School districts must levy for the new growth in the first year or lose those additional dollars forever.

School board member Traci O'Neal Ellis questioned what would happen if the district decided to forgo the 1.5 percent CPI increase.

King said the district would have to delay purchasing new school buses and computers.

"We have almost 70 to 90 (buses) that are going to be on their 14th year of operation," King said, added that some of the older buses are starting to rust.