Geneva D304 discusses using reserves to pay some debt
Facing growing payments on money borrowed to build and remodel schools, the Geneva school board heard options Monday night for keeping debt payments level, refinancing to save on interest and possibly using $10 million from reserves to help pay for it.
The board received a report from financial analysts William Blair and Co.
District 304 owes $162 million in principal, on a variety of bond issues. The biggest was the $85.8 million it borrowed in 2007 to build two new elementary schools and remodel and repair several other schools.
Overall, it expects to have to pay $325.7 million, with the interest.
The money taxpayers need to fork over to cover the payments is expected to rise from nearly $14.6 million now to almost $25 million for tax bills being paid in spring 2020. Debt service levies are not subject to the state’s property-tax increase cap. If the district does nothing, it will take through 2027 to pay off the current debt.
One option that might make debt taxes level a few more years, and save some money in interest, would be to use $10 million in reserves to pay some of the debt for five years, while abating or returning $10 million in taxes. That could save about $3 million in interest, according to the report. It is an option the board’s finance committee seemed most interested in, said Elizabeth Hennessy, the representative from William Blair.
”We tried to take a really good look at how we could use those reserves we built up,” because we told taxpayers we would, said Trustee Kelly Nowak, a member of the committee. “We are open to looking at any other options.”
“It is not a desirable position. We’re just trying to do the best for the long term.”
The district will post the presentation on its website, and several board members urged the public to submit comments and questions. But when resident George Jackowiec tried to ask questions of Hennessy during a later public comment portion of the meeting, board President Tim Moran refused to allow them.
Moran said the public comment part of the agenda is for people to make comments to the board and that questions should be submitted in writing for the board to “synthesize” and answer at a later date. The Geneva school board’s policy, like that of several other local districts, is to accept, but not respond immediately, to public comment at meetings.
The exchange became heated, as Jackowiec said it would be more efficient and save time to have Hennessy answer the question right then, since she was still at the meeting.
Geneva TaxFACTS organizer Bob McQuillan, a former school board candidate and critic of the district, said: “Everybody has to realize the board of education is not what got us in to this mess. It was the voters, maybe a minority of voters, who voted for these buildings.”
He suggested the board discuss the report at forums at all the district schools, just like those held when the board was making the case to voters for the tax increases.