When taxpayers in Maine Township High School District 207 approved the sale of bonds to replace outdated plumbing, electrical and mechanical systems, it was anticipated and shared with voters that the borrowing rate for the bonds would be at 4.54%. With two-thirds of the bonds sold recently, the rate for those bonds was much lower at 2.92%. The remaining bonds are estimated to be sold in 2022 and the total estimated savings to the taxpayers is $46.8 million in interest costs.
The lower interest rates are a reflection of current borrowing costs, the District being seen as a sound investment and the District’s excellent bond rating.
The District sold $130,000,000 in bonds through three issuances in October and the total interest costs are 15% less than was shared with the taxpayers last fall prior to the referendum vote.
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The Board of Education was briefed on the scope of the work, the details around the projects currently being planned by administration and architects and the borrowing during a facilities committee meeting on Oct. 21.
The taxpayers provided the District the ability to sell $195 million in bonds. The District is projected to borrow the remaining $65 million in 2022 and utilize $45.7 million from reserve funds for the projects. Even with spending money from reserves, the District will maintain at least a 50% fund balance. The State of Illinois requires districts to maintain at least 25% reserves.
District 207 was assigned an Aa1 rating for these bond sales to upgrade the schools, the second highest rating available from Moody’s Investment Services. From 2002-2016 the District was assigned an Aa2 rating and in 2016 the District was assigned a Aaa rating.
Assistant Superintendent for Business Services Mary Kalou shares that the low interest rates the District received as part of the recent sales reflected the strong financial reputation of the District. “The rates reflect a feeling that District 207 is a sound financial investment,” she says.
The first round of borrowing occurred on October 8, 2019 and October 23, 2019. The district sold 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. In addition, the school district plans to refinance all of the remaining bonds from 2011 which will save the taxpayers and additional $48,000.