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On Nov. 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.)
The Board’s resolution says the proceeds of the bonds will be used to pay for building additions, building improvements, masonry improvements, roof replacements, site improvements, security, air quality, internal communication, technology, software, special needs accessibility, furniture, equipment and related projects of the District.
Mary Brown, assistant superintendent of business services, said the Board will be asked in February to approve the issuance of approximately $5 million in bonds to fund projects during the summer of 2015. The projects include technology ($1.9 million), roofing at Oakton school ($1.1 million), and addressing the storm water retention area at Lincoln school ($593,024).
Under State law, the District’s bonding capacity is limited by its Debt Service Extension Base (DSEB). Dr. Brown said Speer Financial, the District’s bond representative, estimates that the District has approximately $8 million available under its DSEB and that an additional $2.5 million will become available under the DSEB for capital expenditures in each future year.
If $5 million is spent on capital projects in the summer of 2015, it will leave about $3 million for potential funding under the DSEB, Dr. Brown said. That will increase to about $5.5 million by the summer of 2016.
The resolution of intent to sell $10 million in bonds is only a stopgap measure. At the Sept. 15 School Board meeting, administrators presented a list of capital projects that they were recommending, including for buildings and technology, with a total estimated cost of approximately $89 million.
In order to move forward with all those projects, the community would need to increase the District’s bonding authority in a referendum.
On Sept. 15, School Board members decided to defer moving forward with a referendum until after the District has completed developing its strategic plan, so that any capital spending plans would align with the District’s strategic goals and so they would have a clearer picture of how pending legislation would impact the District’s budget.
Issuing Bonds Without a Referendum
Sections 19-8 and 19-9 of the School Code provide a process for school districts to issue bonds to pay claims against the district without a referendum. After adopting and publishing notice of intent to issue such bonds, the district may sell the bonds unless a petition is filed within 30 days. The petition must be signed by 10% of the registered voters in the district requesting that the issue be submitted to a referendum.