U-46 won't take out $50 million in loans for capital projects
Elgin Area School District U-46 officials have dropped the idea of taking out $50 million in loans to fund capital projects.
The U-46 school board Monday night was expected to consider applying for the ability to issue $50 million in Qualified School Construction Bonds to fund potentially three building additions, and a number of rehabilitation projects and repairs.
Superintendent Tony Sanders said he decided to pull the application from Monday's agenda based on feedback from several school board members opposed to pursuing the loans.
The state anticipates distributing more than $495 million in bonding authority to school districts through the Qualified School Construction Bond program - created under the American Recovery and Reinvestment Act of 2009.
Districts have until Friday to apply with the Illinois State Board of Education for the ability to issue the low- to no-interest rate bonds to pay for construction projects, repairs, renovations and other building needs. The maximum a district can request is $50 million.
Since bond proceeds can be used for building rehabilitation and repair, districts will be able to issue these bonds in lieu of fire prevention (health, life and safety) bonds that would be at a higher interest rate.
U-46 took out $40 million in loans just last March to fund much needed maintenance work. So far, the district has spent $15 million out of the total, and the remainder will be spent over the next two-and-a-half years, Sanders said.
Wayne resident Rick Newton questioned how long U-46 could afford to increase its debt and overburden taxpayers.
The district has roughly $314.9 million in outstanding debt.
"The issue is not a single bond issue," Newton said. "Rather, it is a never-ending onslaught of one new bond issue after another. The problem is even broader than U-46's addiction to debt. The state has a bigger problem ... we're the only state in the Midwest that is experiencing a net loss of population and a net loss of tax revenue."
Even without the bonds, U-46 officials plan to move ahead with several construction projects this year.
The district has requested bids for the proposed addition of 10 classrooms each at Coleman and Highland elementary schools, and six classrooms at Laurel Hill elementary school.
"We still have to bring the additions back to the board for approval in February," Sanders said. "Without the additions we can't do the boundary changes."
The U-46 school board approved the boundary changes in December affecting 566 students in 13 of the district's 40 elementary schools next school year. The changes are meant to alleviate overcrowding at several schools and accommodate full-day kindergarten districtwide next year.