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School District 65 can currently issue up to $10 million in bonds under the District’s Debt Service Extension Base (DSEB), Mary Brown, chief financial officer, told the Board’s Finance Committee on June 10. In addition, the District’s bond financial advisors estimate the bonding capacity under its DSEB will increase about $2.5 million in each future levy year, she said.
Thus, during the summers 2014 through 2017, District 65 will have capacity to issue a total of approximately $20 million in bonds for capital projects.
Dr. Brown also presented a draft schedule of capital projects for the next four summers, which proposed capital expenditures in the amount of $6.5 million for technology; $5.2 million for roofing/masonry projects; $1.6 million for safe entrances to the schools and an annex link at Dawes; $1.3 million for other capital projects; and $1.2 million for supervision/staffing and bonding fees. After paying for these capital projects, the District would have about $4.2 million available under its DSEB.
In earlier discussions, the Board indicated it would be prudent to have bonding capacity of about $5 million available under its DSEB in case of an emergency.
Dr. Brown said the draft schedule “covers only a small scope of the District’s identified projects, due to the limited amount of estimated DSEB.” She added, “Continuing to reduce the District’s capital projects due to the DSEB limit means that certain projects will be delayed and others may never be completed.”
As examples, Dr. Brown said that there is $23.9 million in roofing and masonry work that is spread out over 18 years to reduce the impact on the DSEB in any one year. “If any of those areas deteriorate faster than anticipated, more of the DSEB will be needed to address this work earlier than planned.” In addition, she said, “There is over $16 million of remaining projects that were identified in the last ten-year life safety survey, conducted in FY ’06. The next ten-year life safety survey will be needed in FY’16, which is likely to result in additional identified projects.”
A report called the “standardization report” identifies many additional capital projects.
“The projects on [Dr. Brown’s four-year schedule] are some of the projects we know we need to invest in,” said Finance Committee Chair Richard Rykhus. “Yet it would be good to look at some of these other projects. There are tens of millions of dollars of other projects that we know we need to look at and start to think which ones may fit into this plan and ‘What are the possibilities of funding those?’ and what that means in terms of timing.”
It appears that the only way to obtain funds to pay for additional capital projects is through a referendum in which voters approve the expenditures. Dr. Brown’s memo says, “A successful referendum would enable the District to address projects that otherwise may not be contemplated.”
The School Board has not discussed a referendum.