New Hubble school will be cheaper
Wheaton Warrenville Unit District 200 officials appear to have defied the odds in issuing bonds to build a new school and making it cheaper than expected, despite a time of havoc in the municipal bond markets.
William Hepworth, the district's bond adviser, presented a plan Wednesday that will see the district pay off the $58 million cost of the new Hubble Middle School a year early. The actual costs of the school, because of interest on the borrowed money, is closer to $80 million.
The good news is the money borrowed for the school will come at an interest rate more than a full percentage point less than estimated.
The district will also keep the 44-cent tax rate for its bond and interest costs the same, as promised in the referendum campaign. The district will do that by refinancing some existing debt at a lower interest rate.
Of note is the district's Aa3 bond rating, which is the fourth-best possible. Better ratings translate into lower interest rates. To remedy that, the district will purchase $14.5 million in bond insurance. That effectively buys the district a Aaa rating, the best possible.
That move will save another $1 million in interest costs for taxpayers. However, nearly half that savings vanishes in all the fees and commissions charged in purchasing the bond insurance.
The net result of all that maneuvering is about $13 million in savings for District 200 taxpayers.
Hepworth said it's possible even more savings are down the road.
The eventual sale of the current Hubble school site in Wheaton, when the school moves to Warrenville, is expected to help pay off a good chunk of the costs of the new school. The city of Wheaton is then expected to usher in retail and commercial development on the old Hubble site. The tax benefits of that to the school district should also offset some of the costs of the new Hubble.