The Examiner U-46 News FeedU-46 ratifies tax levy, ponders more debt By Seth Hancock
At its meeting on Monday, Dec. 14, the Board of Education in School District U-46 approved a 1.89 percent tax levy increase, 1.39 percent is expected, as well as intent to abate back a portion of that increase. The district administration also presented a proposal to add $50 million in new debt.
The certificate of tax levy and a following resolution to levy were approved with 5-2 votes, Cody Holt and Jeanette Ward voting no, and the intent to abate was unanimously approved.
Including taxes levied for debt services and public building commission leases, which are $42.2 million, the total dollar amount expected is $305.7 million or a 1.63 percent increase from $300.8 million last year.
There was little discussion on the levy except for Ward reiterating her opposition to the plan stated at previous meetings.
Previously Ward said: “I’m uncomfortable with the levy and abate because there’s time that passes from when we levy and when we abate. And then we’re preserving the increases for the future while abating back on a temporary basis. So, I’m uncomfortable with that and I’m going to vote no for that reason.”
The abatement procedure would essentially keep tax rates flat if all things remained equal according to district officials. The intent to abate is nonbinding and the actual abatement resolution will not be presented until late January with final approval in February.
Holt, Ward and Phil Costello all ran on a ticket this past spring on bringing more accountability seeking better fiscal management by the district. Costello, who voted via phone, voted for the tax levy.
After the Nov. 16 meeting, Costello said “it’s too far along in the process to know what would happen” if it wasn’t increased and was more concerned with keeping rates flat, which is the expected result with the abatement, and reigning in spending.
Jeff King, U-46’s chief Operations officer, said the expected result of rates from this levy is that Kane County would see a decrease, DuPage an increase and Cook would remain relatively flat. That’s due to a correction made to make up for an error from Kane County in recent years.
The board was also presented with an application, to be voted on at the Jan. 11, 2016 meeting, seeking $50 million in Qualified School Construction Bonds, which comes about a year after the district added $40 million in working cash bonds despite wide public disapproval.
However, the administration is justifying the added debt as U-46 CEO Tony Sanders said it would come from “$50 million in zero- to low-interest bonds available only to school districts.”
Sanders said that is leftover money held by the Illinois State Board of Education from the American Recovery and Reinvestment Act, the federal government’s stimulus package from 2009. The ARRA followed a Keynesian economics model that says government intervention is needed during recessions rather than allowing the markets to naturally correct.
“We’re bringing this forward to the board as an opportunity to, yes add a little bit to our debt, or add to our debt by $50 million, and at the same time do it in a way that is a little more attractive with the zero percent interest for 20 years and then a very low interest the last five,” Sanders said.
King said that models he’s seen would mean zero interest through the 20th year, a quarter of a percent interest the last five, as the federal government would provide a rebate to the district to pay for the interest. Ward noted that the federal dollars still come from the taxpayers, just on a national scale.
The plan, if approved, would be to use the money to speed up maintenance work King said. The application is being rushed as King said the district was given 10 days to draw up an application and less than a month to get board approval, and he said the district may not receive the full amount of $50 million which is the max a district can seek.
The district’s current total debt according to its recent audit report is $565.9 million which will not be completely paid off until 2035.
Also voted on at the meeting, which was unanimously approved, was $10.7 million in itemized bills.
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