Pay off the loan early, use the money to fund needed repairs around the Naperville School District 203, or return the money to taxpayers. Those are the three options facing members School Board.
Superintendent Dan Bridges recommends forgoing the abatement option this year in favor of either paying off school building bonds or applying the money to much-needed capital improvement projects.
“The desired and preferred use of the money would be the payoff of the bonds,” Bridges said.
District 203 Chief Financial Officer Brad Cauffman said after voter approval in 2008, the Board of Education issued general obligation bonds in the amount of $10 million in 2008 and $33 million in 2009. The bonds are repaid annually through a debt service tax levy, which in 2013 is $3.1 million. For the average taxpayer with a $375,000 home, the debt levy portion equates to roughly $95.
District 203 is at a point paying off the debt where the bonds have interest-only payments. Cauffman said from now until the bonds are retired in 2028, the required interest payments on these bonds exceed $5 million. So the board last month authorized administrators to look into the purchase and cancellation of the 2008 bonds using $3.1 million levy money, with an eye on saving the district money in the long term.
Cauffman likened the savings to that of homeowners who pay off their home mortgage early.
School Board President Jackie Romberg said payoff would be a permanent abatement of those funds. “That’s the best use of the resources for our community,” Romberg added.
In the meantime, district facilities are in need of maintenance and upgrades. Bridges recommends the district use the $3.1 million for improvements if the district is unable to work out a debt repayment plan.
Bridges said the district is collaborating with its architect to complete a facilities master plan.
He said based on input from the Future Focus 203 process, the district identified several projects, including improving building access and entry, providing opportunities for flexible and innovative learning spaces with the schools, and addressing the addition of all-day kindergarten at its elementary schools.
“We look at 22 buildings with potential projects at each of those buildings. It’s fair to say that the impact of the overall facility master plan would be above $3 million,” Bridges said.
School Board member Terry Fielden said he is a proponent of putting money back into facilities. He said it’s important to make sure buildings are “maintained properly because that just pays dividends in long term.”
A final decision on the tax abatement will be made March 17. The deadline to file an abatement with DuPage and Will Counties is March 31.