The Board of Education intends to issue up to $10 million in new Working Cash Fund Bonds to complete anticipated, critical facilities projects. Similar to taking out a home equity line for home improvements, the Board of Education intends to utilize up to $10 million for capital improvements this summer. At the January 22nd Board of Education Meeting, the Board voted to approve a resolution to issue the bonds. For the next thirty (30) days, community members have the opportunity to weigh-in on the Board’s intent to issue new Working Cash Fund Bonds.
Over the last several months, the Board’s Facilities Committee has met with representatives from the District’s architecture firm, Legat Architects, along with Performance Services, a performance contracting firm, to identify critical capital and energy efficiency projects at 18 of our 22 facilities that require immediate attention. Anticipated summer projects include new asphalt, major mechanical system upgrades, roof replacements, as well as several other lighting, boiler and HVAC updates across the district. To view the January 22nd capital improvements presentation, please click here.
Additionally, the Board Finance Committee has met with representatives of PMA Securities, the District’s financial advisors, to review financing options to pay for the capital and energy efficiency projects. To view the financing options presentation, please click here.
Issuing working cash bonds for capital projects is incorporated into a longer term plan to level out and refinance existing debt payments over the remaining term of existing bonds. It is anticipated that the District will pay back $13 million for the $10 million it anticipates borrowing.
District 200 has debt that extends through levy year 2023. When the Board of Education completes the phases of the refinancing plan, the debt service would be extended two additional years to levy year 2025, reducing the annual debt payment from a peak of $29.1 million to $21 million. Even though the debt payments are extended by two years, it is anticipated it will be at a lower rate, potentially saving taxpayers up to $4.9 million based on current market rates. Refinancing existing debt with historically low interest rates is a financially prudent decision.
This is not the first time in recent history that the Board of Education restructured existing debt to save valuable taxpayer dollars. In 2012, the Board of Education used proceeds from the sale of the Hubble property to restructure and pay down high-interest debt and ultimately eliminated nearly $7 million in debt service.