District 158 gets high marks for finances

Five years ago, Huntley Unit District 158's finances were in such disarray that the school board later launched a special audit to investigate possible fraud and mismanagement of district funds.

A recent development shows how far District 158 has come.

This month, Standard & Poor's, a firm that evaluates the creditworthiness of organizations, gave District 158 a AA credit rating.

The rating "differs from the highest-rated (investments) only to a small degree" and indicates District 158's ability to meet its financial obligations "is very strong," according to Standard & Poor's.

District leaders and a financial consultant said the rating indicates of how much finances have improved.

"We would not have seen anywhere near this four, five years ago," said Eric Anderson, District 158's bond counsel. "This represents the hard work that this board, prior boards (and the) administration have done in providing good management tools."

The high rating will mean cheaper borrowing for District 158 - and ultimately, taxpayers. Anderson estimated the rating will save the district about $190,000 when it refinances $3.9 million in bonds next month.

The bonds, which paid for the Marlowe Middle School addition that opened in 2007, originally were to be repaid with fees collected each year from local homebuilders. But because of the sharp downturn in the local housing market, those fees have declined dramatically, leaving District 158 unable to keep up with its aggressive repayment schedule.

The refinancing will enable the district to lower its annual payments while extending the payback and raising the cost of interest.

Under the plan the school board approved last week, District 158 - using developer fees, not taxpayer dollars - will pay about $165,000 annually for the first nine years and $740,000 for six years after that.

The longer repayment schedule could cost the district more than $2 million in additional interest, but district officials say they hope to repay the debt in six to eight years. Paying off the debt in six years could save the district $1.1 million in interest over waiting the full 15 years, Anderson estimates.

"The intent is to pay these off just as soon as the market turns around and we collect enough impact fees to pay it off," District 158 Comptroller Mark Altmayer said.