D86 Board Finalizes Sale of Nearly $18 Million in New Bonds
A portion of the much-discussed dollars will likely go towards the installation of air conditioning at both Hinsdale Central and Hinsdale South high schools.
It appears Hinsdale Central and Hinsdale South classrooms will indeed get a bit cooler after a major step towards air conditioning the schools was taken Monday night.
The Hinsdale Township High School District 86 Board of Education voted 5-1 with one abstention to approve the issuance of general obligation bonds not to exceed $17.96 million to increase working cash in the district. The administration has made clear its intention to use the new dollars for capital improvements, including the air conditioning that would allow the district to implement a more convenient schedule for students.
Board President Dennis Brennan voted in favor of the resolution along with board members Kay Gallo, DeeDee Gorgol, Michael Kuhn and Jennifer Planson. Richard Skoda voted against the resolution and Dianne Barrett abstained, saying she thought the resolution was deceptive to taxpayers.
On Dec. 12 the board voted 5-2 in favor of the intent to sell bonds to be used for the installation of air conditioning and other capital expenses. Barrett and Skoda voted against that resolution.
Bill Hofherr of George K. Baum said during the meeting at Hinsdale South that the firm arranged the sale of the district’s bonds earlier Monday in a market that was more receptive than expected. The 3.17 percent true interest rate George K. Baum received was lower than the 3.49 percent rate the firm discussed with the board in November.
The lower rate will mean the district’s debt service obligation will be about $1.33 million less than expected, allowing it to reduce the payback period by one year. The bonds will be paid off in 18 years instead of 19, like the district had anticipated.
“The bonds were very well received,” Hofherr said. “There was very strong demand for the bonds in the marketplace today.”
Taxpayers will be on the hook for paying the new debt, which will result in a property tax bump of approximately $30 the first year, $36 the second year, and a lesser amount in the third year, Hofherr said. In the fourth year of the bond, taxpayers will be paying the same debt service amount they’re currently paying as a result of other bonds coming off the books.
Barrett said she thinks it is illegal that the resolution states the bond money is going towards the working cash fund when it’s been said it’ll go towards capital projects.
“The working cash funds are going to be used for air conditioning—that’s deceiving to taxpayers,” Barrett said.
Brennan said the intended use of the bonds for capital projects has been made clear throughout the board's discussion, regardless of the resolution’s language.
Barrett also said the district’s attorneys should have looked over the bond documents drafted by Chapman and Cutler, the law firm that represents the bond buyers, before any votes were cast.
Hofherr said George K. Baum’s attorneys have looked over Chapman and Cutler’s documents and found the bond purchase and use of the resulting revenue to be “completely legal.”
Skoda has said during past discussions he is against borrowing nearly $18 million on the taxpayers' dime when the district already has $7 million available in the working cash fund.
The board member didn't say much about the bond issue Monday, but in November said he supported going to referendum in November to get the blessing of the community.
“My suggestion is for the board to figure out what they really need and go to the voters in this economy and say, ‘We really need this and we have a lot of very energetic people that believe in this,’” Skoda said at the board's Nov. 21 meeting.
If air conditioning is installed, the start of the school year could be moved to an earlier date—when temperatures are high—so that finals could be completed before winter break.
Superintendent Dr. Nicholas Wahl said the air conditioning bonds needed to be secured before any changes are made to next year’s school calendar, which will be discussed in March and finalized in April.