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On Dec. 17, the District 65 School Board adopted a resolution of intent to issue an additional $10 million in bonds pursuant to Section 19-8 of the Illinois School Code. The resolution does not authorize the actual issuance of the bonds, but is a preliminary step that may enable the Board to issue bonds up to that amount without a referendum. (See sidebar.)
Mary Brown, chief financial officer, said the proceeds of any bonds issued pursuant to the resolution will be used to pay the costs of funding school building additions, roof and masonry work, safe entrances, technology, and related projects. Bonds up to $10 million may be issued pursuant to the resolution any time in the next three years, she said.
The administration recommended that the resolution be for $17.5 million. After extensive discussion, the Board decided, by a 4-2 vote with one abstention, to reduce the amount to $10 million.
Board President Katie Bailey said the full $17.5 million was not needed this year, and reducing the amount to $10 million would allow subsequent boards to decide the issues.
Projected Capital Projects
The School Board may currently issue up to $10.3 million in bonds without a referendum under a resolution of intent to issue bonds that was adopted by the Board in October 2011, said Dr. Brown. The Dec. 17 resolution authorizing an additional $10 million would bring the total to $20.3 million.
Last month, the School Board approved bids for work at Haven and Nichols middle schools to accommodate projected increases in student enrollment. The work includes a six-classroom addition at Nichols, a four-classroom addition at Haven, an expansion of the cafeteria space at both schools, and secure entrances at both schools at a total cost of $8.3 million.
In addition, the District is anticipating that it will incur expenses this year totaling $4.7 million for roofing and masonry work at Oakton, Dawes, Chute and Nichols ($2.3 million), technology expenses ($2 million) and various other projects.
The total estimated cost for all projects planned for this year is $13 million. Bonding capacity of $20.3 million would be enough to pay the capital costs anticipated for this year and leave a balance of about $7 million to fund capital projects next year.
At the Dec. 17 Finance Committee meeting, Dr. Brown presented schedules showing the District is anticipating roof and masonry work totaling $21 million, life-safety work totaling $17.1 million, and miscellaneous projects totaling $3.7 million under multi-year plans. Additional capital expenses are listed in a “standardization report.”
The Board has not yet prioritized those projects, but it will have to do so to remain within the bonding capacity authorized under its October 2011 and Dec. 17 resolutions.
Under State law, the District’s bonding capacity is also limited by its Debt Service Extension Base (DSEB). Dr. Brown said Speers Financial, the District’s bond financial advisor, advises that the District’s current bonding capacity is limited to about $19.5 million under its DSEB, absent a referendum approving a higher amount. She said Speers Financial estimates that an additional $2.5 million will become available for capital expenses in each of the District’s future levy years.