District 207 plans to take advantage of current low interest rates when it sells voter-approved bonds that will be used for school repairs and enhancements. It is projected these lower than anticipated rates will reduce the taxpayer burden by approximately $44.2 million. The board took action on this approach during the Sept. 3 meeting.
When District 207 voters approved the sale of $195 million in bonds in November of 2018 to replace outdated plumbing, electrical and mechanical systems as well as increase security, it was anticipated the borrowing rate for the funds would be 4.54%. However, it is now estimated the borrowing rate will be 2.97%. The anticipated 15% reduction in total borrowing costs and 42% reduction in interest rate will result in a lower than anticipated taxpayer burden to fund the work that will begin in the spring of 2020. The scope of the work and the projects are currently being planned by administration and architects.
Original Estimated Debt Service Cost: $300,111,417
Current Estimated Deb Service Cost: $255,947,150
Original Estimated Interest Rate: 4.54%
Current Estimated Interest Rate: 2.97%
The Aaa bond rating, the highest available to school districts, results in lower interest rates when borrowing money. The district anticipates selling a portion of the referendum bonds through the Illinois Finance Authority, which will allow the bonds to be exempt from both federal and Illinois taxes and save the taxpayers money.“Interest rates for bonds are at historic lows and we want to take advantage of that to reduce the amount of taxes paid by the District 207 community,” says Assistant Superintendent for Business Mary Kalou. “While very few school districts are Aaa bond rated, it is our expectation the district will maintain its current Aaa bond rating when Moody’s conducts its review of the district’s finances.”
In addition, the school district plans to refinance all of the remaining bonds from 2011 which will save the taxpayers and additional $48,000.
The district’s plan is to sell $130 million in bonds in the coming months and another $65 million in 2022. Taxpayers will see the impact of the bond sales in the fall of 2020 as part of the second installment of the 2019 tax bill.
“We are working diligently to lower the tax burden on our community by exploring all options with relation to the bonds and existing debt,” Kalou says. “In addition, as part of the design process for the work at the schools, our discussions are centered around providing the maximum benefit for each dollar spent.”
Community members can stay up to date with the latest construction information by visiting https://maine207.org/construction/