Palatine Dist. 15 looks at issuing bonds to pay for building repairs

Palatine Township Elementary District 15 began discussion Monday on how they will pay for an estimated $119 million in building repairs that must be completed in the next five years to meet safety requirements.

Recommendations for repairs come out of a life safety study conducted every 10 years.

The two main funding options presented Monday by Michael Adamczyk, chief school business official, include using district funds to pay for the $119 million of repairs or issuing life safety bonds with repayment periods of 10 or 20 years.

Life safety bonds can be used to renovate school buildings when they need to be repaired; a local architect and the state board of education must approve the plans.

If life safety bonds are issued, district residents would pay more in property taxes to the school district each year the district is paying off the debt.

A taxpayer in a $250,000 home, for example, if the district took 10 years to pay off the bond would be $17 for tax year 2015, and $18 in tax year 2016, with an increase each year the district takes to pay off the debt. The impact on the same home if the district took 20 years to pay off the bond would also start at a $17 increase for the 2015 tax year, and increase every year for the 20 years it takes the district to pay off the debt.

Board member Manjula Sriram questioned some items on the district's life safety list and suggested it might be better to pay for at least some of the projects with the district's reserve funds.

"There's a lot of items that are there that are repairs that should technically be maintenance-kind of items, and maybe the list is larger than we've written off in the past," Sriram said.

And with that in mind, she said, the board could consider paying for the initial projects with the district reserve money, and then evaluating whether issuing bonds or paying for more projects with the district's cash would be the best option.

But District 15 Superintendent Scott Thompson said at a time when budget uncertainty looms over the state, he thinks the district should keep the funds they have for emergency situations.

"There are many unknown aspects of the district's finances," Thompson said. "And if the legislature drastically affects our funding, fund balances are required to absorb those financial shocks and preserve the educational program for our children."

It still remains unclear what the exact cost of the mandatory safety projects will be, as the plans still have to be approved by the state.

Adamczyk said a more accurate number will most likely be presented at the board's November meeting.

And after that number is set, Thompson said, the district hopes to put the work out for bidding.