Grayslake school considers bond refinancing

Prairie Crossing Charter School in Grayslake is seeking help to refinance more than $9 million in mortgage debt as a money saving measure.

The school is looking for a municipality to act as a conduit by lending its bonding authority to the school.

“With rates as low as they are, we’re looking to refinance,” said Nigel Whittington, the school’s executive director. “We can go to the bank but the rates will be higher,” than a municipal bond rate.

“We’re hoping in the long term, we can eventually save a half-million dollars,” he added.

To to that, a municipality would have to allow the school to use its bonding authority to pay off the old debt and start anew.

So far, there have been no takers.

The most recent pitch was discussed Monday by the economic development committee in Round Lake Beach. The village says it can issue a maximum of $10 million in bank qualified debt each year. But allowing the school to use its bond authority would count against the village’s annual capacity.

That would prevent the village from refinancing its own bond debt. Under the scenario presented to Round Lake Beach, the school would pay the village a $30,000 fee.

“They’re offering to pay a small fee (but) we can actually save more money by refinancing our bonds,” said Village Administrator David Kilbane.

The village estimates it would save $20,000 a year for a total of $200,000, he added.

The school also approached Grayslake, but that village also declined in anticipation of using its bonding capacity for other purposes.

Whittington said there is about $9.3 million worth of debt remaining on the four school buildings, and a recent appraisal showed they were worth “way more” than the amount the school is trying to mortgage.

He said Prairie Crossing was looking for the best rates and would continue the search. The new budget year begins July 1.

“As far as we can tell from financials, we remain debt free. Apart from the mortgage, we have to run a balanced budget,” Whittington said.

Prairie Crossing is an environmentally focused public choice K-through-8 school. Parents of children at Woodland Elementary District 50 and Fremont Elementary District 79 may send their children to Prairie Crossing.