During a recent government meeting, officials discussed the financial strategies available to local school districts for funding capital projects, emphasizing the importance of proper fund allocation and the implications of various bond types.

A notable case was highlighted where a nearby school district faced legal challenges after leaving funds in the Operations and Maintenance (O&M) fund instead of transferring them to the Capital Projects fund. This situation arose when an attorney encouraged businesses to file a property tax objection, leading to a lawsuit against the district for what was deemed a prudent financial decision.

The discussion also touched on the limited prospects for state grants, which have not been funded in over two decades, leaving districts to rely on alternative funding sources. These include donations, impact fees, and land fees, which can contribute to capital projects. When these sources fall short, districts may turn to financing options, including various types of bonds.

The meeting outlined several bond categories, including non-referendum bonds, which can be issued without voter approval unless a petition is filed. Working cash fund bonds were described as the most flexible borrowing tool, allowing funds to be used for any purpose, but requiring a public notice and a petition process if contested.

Life safety bonds, designated for specific safety projects approved by the Illinois State Board of Education (ISBE), were also discussed. These bonds do not require the same petition process due to their mandated nature, although a public hearing is still necessary.

Alternate revenue bonds, secured by sales tax revenue, were explained as a viable option, with a built-in cushion to account for revenue variability. These bonds are less likely to face community opposition since they do not impact property tax levies.

Finally, the meeting concluded with a discussion on referendum bonds, which, if approved by voters, bypass the petition and public hearing requirements, allowing for greater flexibility in project funding.

The officials projected that as early as 2025, the district could issue bonds totaling approximately $59 million for various projects, including life safety improvements, based on assessments from their architect. This strategic planning aims to ensure that the district can effectively manage its financial resources while addressing critical infrastructure needs.