District finance presentation outlines refinancing, 1% sales‑tax capacity and cash reserves

At a special meeting, a Bernardi Securities representative walked the board through the district’s outstanding bond structure and presented options to refinance two bonds currently paid from the county school facility 1% sales tax and to add new borrowing of $8 million, $9 million or $10 million. The presenter described how refinancing could consolidate alternate‑revenue bonds and generate net proceeds for projects while keeping the combined annual payment around a target figure the board discussed.

John Vizzetti of Bernardi Securities told trustees the district has several outstanding series payable from two revenue streams: property‑tax‑based general obligation bonds and alternate‑revenue bonds payable from the county 1% school facility sales tax. He said the district currently receives a little over $1.7 million annually from the 1% sales tax and that total annual debt service on the 2018 and 2019 sales‑tax bonds is about $988,000 per year. “We took advantage of interest rates … saving the district nearly $1,400,000 in interest,” Vizzetti said, summarizing prior refinancings.

Vizzetti presented an option to refinance the 2018 and 2019 sales‑tax bonds and to add new money that would net the district roughly $8–$10 million in project proceeds. Under one example he provided, the district could increase the combined annual alternate‑revenue bond payment from about $985,000 to roughly $1.6 million, amortized over about 19 years with an estimated true interest cost of approximately 4.42 percent. Vizzetti estimated that refinancing the two bonds now could produce net interest savings in the hundreds of thousands of dollars over the life of the bonds while providing new money for capital work.

Board members and staff clarified the scope of what would and would not be included: the bonds payable from the property tax levy (general obligation debt) would not be touched by the sales‑tax refinancing, Vizzetti said. The presenter also described typical issuance costs (bond counsel, underwriting and rating agency fees) and estimated those fees at roughly 1–2 percent of the issue, with exact figures to be developed once the final par amount is known.

District staff also presented financial context. A district staff member summarized how the Illinois State Board of Education (ISBE) financial designation uses days of cash on hand as one input. Using FY25 numbers, staff reported daily operating costs of about $73,404 and calculated an estimated FY25 days‑cash‑on‑hand figure near 436 days across the education, operations & maintenance, transportation and working cash funds. Staff said ISBE’s highest designation looks for a minimum of 180 days cash on hand; the district’s reported reserve levels are well above that threshold.

Board members discussed whether the district should rely on sales‑tax capacity, use existing operating reserves for some project costs, or combine both approaches. Finance discussion included a target debt‑service assumption of $1.45–$1.6 million per year on alternate‑revenue bonds, a 10 percent revenue buffer approach and the potential to draw on operating fund balances without dropping below ISBE targets (staff estimated that drawing the cash balance down to a 220‑day level would free about $16 million while remaining above the state’s top threshold).

No financing vote was taken. Trustees instructed staff to continue refining financing scenarios and to return with final figures and options that would be available for public hearings and, if directed, for bond‑issuance steps in the schedule discussed by Bernardi Securities.