St. Charles schools will make upgrades, save money

St. Charles Community Unit School District 303 officials reaped unexpected savings in the borrowing needed to complete several significant infrastructure upgrades, including $50 million in middle school improvements.

Eight different financial institutions logged 44 total bids in an eBay-style reverse auction bond sale by the district earlier this month.

The district borrowed nearly $20 million to complete upgrades to Wredling and Thompson middle schools, remodel the Norris Recreation Center and put a new artificial turf field in place at St. Charles North High School.

The district already has unspent grant money, reserve funds and future cost savings that will account for the remaining $50 million needed.

Bank of America placed the winning bid on the working cash bond sale. The district received an interest rate of 3.6 percent. Going into the auction, district officials hoped for an interest rate of no more than 4.36 percent. The lower interest rate means the district can borrow the money at a total cost that's $2.8 million less than expected. The total interest cost for the bonds will be $9.82 million.

"Overall, it was a very successful bond sale for us," said Seth Chapman, the district's chief financial officer.

The borrowing will see the district's total general obligation bond debt rise to $22.41 million for the current fiscal year. That number drops in the 2018 fiscal year to $22.08 million before plummeting all the way to $6.15 million in fiscal year 2019. The reduction reflects the retirement of a major portion of the district's outstanding debt. It will result in an average savings of $600 for the owner of a $300,000 home in the district.

Even with the savings, the bonds will hamper the district's ability to borrow any significant amount of money without voters approving it by referendum until 2024.

District taxpayers will begin seeing the fruits of the borrowed money this summer as upgrades start at Wredling Middle School and the new turf goes into place at St. Charles North High School.