Geneva schools want their $17 million state construction grant
As Geneva District 304 looks for ways to make larger debt payments, officials say one thing that would help is if it were to get $17.1 million in state school construction grants to which it is entitled.
Donna Oberg, assistant superintendent for business services, made the point during a recent presentation on the district's proposed 2011 property tax levy.
The money would help pay the bills for building Geneva Middle School North in 2004. The district spent about $49 million to construct the school.
The Illinois State Board of Education reviewed the project and gave it a certificate of entitlement, Oberg said. It is now up to the state's Capital Development Board to cut the check.
But that depends on financing from the state's budget.
In 1997, the Illinois School Construction Law was adopted, setting up the Illinois School Construction Program.
Under it, the state education board reviews district's applications and determines whether they are entitled, then sends the application to the Capital Development Board.
School construction grants are limited to projects that address emergency needs, crowded classrooms and aging buildings. The top priority is given to projects necessary due to man-made or natural disasters, followed by overcrowding due to population growth or aging buildings; school district reorganization; severe and continuing health and life-safety hazards; accessibility for individuals with disabilities; and other needs unique to the facility.
This year's state budget included $1.5 billion for school construction grants. Entitled grants so far this year are designated for projects from 2002 and 2003, said Mary Fergus, spokesman for the state board of education.
Fergus said capital funding comes in large cyclical plans, such as “Build Illinois” (1985), “Illinois First” (1999) and “Illinois Jobs Now!” (2011). The state education and capital development boards have a backlog of applications for years between the large capital programs, she said. The last round of grant funding was in fiscal year 2004.
Besides the middle school grant, which is already entitled, Geneva has also applied for $28 million in construction grants for building Williamsburg and Fabyan elementary schools, and renovating other schools. Voters in April 2007 allowed the district to borrow $85 million to do that, plus make technology improvements. It will take taxpayers until 2027 to finish paying off that series, unless they are abated.
Bob McQuillan, founder of Genevans for Accountable and Controlled Tax Spending, said he was shocked to learn about the lag in the state payment to Geneva when he attended a presentation last month about the state financing of education. He has since written to state Sen. Chris Lauzen and state Rep. Kay Hatcher to ask them why the grants haven't been paid, and the status of the second request.
“We are owed that money, and we should get it,” McQuillan said.
Oberg has a call in to the Capital Development Board to check on the status of both projects.
The original program funded more than 500 grants with $3 billion in state funds for $6 billion in construction. Geneva received two grants under the original program.
“Since only the General Assembly can suspend a grant program created through statute, what we have is a backlog of applications for years between the large capital programs,” Fergus said.
And should a $17 million check show up in Geneva's mailbox, what would the district do with it?
“I would want to use those dollars to pay down debt,” she said. Oberg is unsure but believes the money would be restricted to paying the 2004AB bonds. In that case, the district might have to hold the money in escrow until some of the bonds start becoming callable in 2015. She said she would check with the district's financial advisers, William Blair and Co., to determine if the money could be used to pay off other debt that is already callable. The $19.28 million 2004AB general-obligation bonds that become callable in 2015 have interest rates of 4.83 percent to 9 percent, and an expected interest cost to taxpayers of $4.74 million.
“If we could get this money, it would be great,” Oberg said.