U46 bond issue: residents protest, district explains

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Updated: March 8, 2012 8:11AM

ELGIN — A handful of School District U46 residents questioned the district’s intent to issue up to $20 million in working cash fund bonds and called for a referendum during a public hearing Monday night.

That bond issue would be the district’s second in as many years.

And, former Elgin City Councilman Terry Gavin said, “If you haven’t noticed, we’re in a recession. In fact, we’re worse off than almost every other state.

“Families cannot afford more taxes.”

The new bond issuance would follow a $25 million working cash fund bond issuance in March 2011. And those back-to-back issues would come after the Elgin school district previously had not borrowed money since 2003.

Gavin said he was “outraged” the district would do that without first going to voters within the district for a referendum.

“I would ask you to consider, before you pass this, at the very least consider this as a referendum to see if the people, the taxpayers, support it,” he said.

Rick Newton of Wayne also asked what the bond proceeds would be used for, and a third woman, who stood at her seat in the audience, inquired what the interest on the bonds would be. There were no other public comments.

The money is available for “life safety work,” meaning “the proceeds are to be used for the maintenance of your very extensive facilities,”

said Linda Bobert of Robert W. Baird & Co., the district’s financial advisers.

That includes roofing and paving projects, chillers, boilers, elevators, lighting and energy management systems for those district buildings, the district has said. The funds likely would last the School District four to five years.

Bobert said she can’t say what the interest rate for the bonds will be until they are sold, but “we are in an incredibly low interest climate.”

“This is a routine kind of issuance for every district in Illinois that has a routine debt extension base,” she said. “It is the type of financing that is done by virtually every school district.

It does not require a referendum, she said.

The U46 Board of Education is scheduled to vote on the bond issuance at its next regular meeting, 7 p.m. Monday, Feb. 27, at the U46 Educational Services Center, 355 E. Chicago St.

If passed, Bobert said she could have “dollars in the hands of the district by May 15.” And U46 Chief Operations Officer Jeff King said he would report back to the School Board in the fall about the district’s progress on those maintenance projects and their actual costs, compared to the anticipated costs.