On Aug. 16, School Board decided by a 5-0 vote to adopt a Resolution of Intent to issue an additional $25 million in bonds “to pay claims constituting the costs of school building additions, roof replacements, site improvements, school fire prevention, life safety, security, air quality, internal communication, technology, software, special needs accessibility and related projects of the District authorized and allowed for proper school district purposes,” referred to as the “2010 Projects.”
The Resolution adopted by the Board states that the 2010 Projects “are hereby found, determined and declared to be presently outstanding and unpaid, were authorized and allowed for proper school district purposes and constitute valid and binding obligations of the District.”
In a memo to the Board, Mary Brown, chief financial officer, said, “Additional bond sales are needed to fund the next phase of life safety/building projects, building additions; renovations and technology.” Her memo refers to life safety/building work tentatively scheduled for the summer of 2011, options for addressing space capacity concerns at Dewey and Willard schools which are being discussed, and life safety/building projects tentatively scheduled for the summers 2012-15.
No bids have been submitted for the proposed work and no contracts have been entered into for the work.
The Resolution of Intent does not authorize the issuance of bonds, but a resolution of intent is the first step required to sell bonds without a referendum. Dr. Brown said the administration would ask the Board to approve the sale of bonds in stages. According to a proposed bond schedule, the District tentatively plans to sell $13 million of bonds in October, $8 million in 2011 and $4 million in 2012.
Dr. Brown’s memo says the District has funded building projects and technology since the 2006-07 school year through the issuance of $40 million in bonds, $26.5 million of which have been allocated for life/safety /building projects and $13.5 million for technology projects.
Currently the District has $47.2 million in outstanding bonds, which includes $11.8 million of referendum bonds and $35.4 million in non-referendum bonds. After the 2010 tax-levy year, all referendum bonds will be paid off. The District’s annual debt service on all bonds, including the proposed new bonds, would then be cut from about $10.5 to $5 million.
Issuing the Bonds
Without A Referendum
The Resolution of Intent states it is being issued pursuant to Section 19-18 of the Illinois School Code. Sections 19-8 and 19-9 of the School Code authorize a school district to issue bonds for “the payment of claims against any such district” if certain conditions are met.
First, the School Board must adopt a resolution setting forth and describing the claims in detail, declaring that the claims were authorized for proper school purposes, establishing the validity of the claims, and stating the district’s intent to issue bonds to pay such claims.
Second, the District must publish a notice of its intent to issue the bonds in a newspaper of general circulation, and advise that if 10 percent of the registered voters in the district sign a petition requesting that the matter be voted upon in a referendum, then the matter will be submitted to the voters in a referendum. If no such petition is signed, the district may issue the bonds without a referendum.
District 65’s proposed notice says that in order to trigger a referendum vote on whether to issue the bonds, a petition would have to be signed by not less than 4,700 voters (10 percent of the registered voters) in the District within 30 days of the publication of the notice.