District 158 weighs options to refinance debt

Refunding the bonds that paid for the expansion of Marlowe Middle School could cost Huntley Unit District 158 an additional $2.5 million, according to a consultant's analysis - but officials stress taxpayers would not be on the hook for the added debt.

District officials plan to refinance the debt because the developer fees that were supposed to cover the payments have plummeted along with the housing market.

"We've got a $1.9 million payment due this year, and the impact and transition fees aren't going to be enough to cover that," District 158 Comptroller Mark Altmayer said.

District 158's bond consultant presented the school board with two refinancing options this month. Both would allow the district to reduce its annual payments but would end up costing the district significantly more in the long run.

"No doubt about it, it's going to cost more," said Eric Anderson, the district's bond consultant.

If the district continued with its planned debt repayment - which officials say is no longer feasible - it would cost almost $3.9 million to pay off all the Marlowe bonds. Anderson's estimates show refinancing could raise the overall cost of repaying the bonds to between $6.1 million and $6.4 million.

But officials said even if the district refinances, as is likely, they still intend to cover the payments with developer fees - not taxpayer dollars.

"The intent is to continue to abate those bonds with impact fees and transition fees," Altmayer said.

The more costly refinancing option would reduce the district's annual payments to a manageable $347,500. The cheaper option would have the district pay mostly interest for six years, then make annual payments of $675,000. The additional revenue would come from new property taxes the district expects to receive when a special taxing district in Huntley expires.

Board members will also have to address how the district will cover a $2.1 million payment due in 2012 on a debt certificate that also financed the Marlowe expansion. Anderson and Altmayer have recommended the board tackle the bond repayment first.

The board will review the refinancing proposal in more detail at a future committee meeting.