Lincoln Way 210 board sets hearing to consider $30 million life-safety bond for HVAC work

The Lincoln Way 210 Board of Education moved on Feb. 20 to schedule a public hearing on a proposed life-safety bond that would fund HVAC and other life-safety projects the Illinois State Board of Education approved. The district’s administrative team and its financial advisor presented a financing plan that would issue roughly $30–31 million in life-safety bonds, with a projected interest cost and payback bringing the district’s net outlay to the mid‑$40 million range.

District staff said the State-authorized life-safety list totals $30,420,000 and includes air handlers, chillers, boilers and building controls identified in a recent facility assessment. “These are not units in our home,” a district administrator said in describing the high capital and repair cost of school HVAC equipment. The district’s financial adviser, Bob Lewis of PMA Securities, told the board the recent change in state law allows every district to access life‑safety borrowing even if it lacks a prior debt service extension base, calling the reform “a level playing field” for districts required to file life‑safety submittals with ISBE.

Why it matters: the district faces recurring repair costs on aging HVAC equipment and estimates annual repair spending of $350,000–$400,000 on very old units. Bond financing would replace aging systems more quickly, capture bid economies of scale and free operating funds for non‑life‑safety capital needs. The board heard two financing scenarios: borrowing now and completing work across one or two construction seasons versus phasing projects over a decade. The district estimated the net cost if bonds are sold now at about $44 million (including interest) and estimated approximately $41.4 million if work is chunked over 10 years; staff emphasized the operational and budget flexibility that comes from financing now.

How the financing would affect taxpayers: PMA’s preliminary example uses a roughly 4.25% assumed interest rate and a bond levy that would add about $1.5 million a year to debt service for nine years. That increase equates to an estimated $37 per year on a $400,000 home under the example shown. The district said it could instead abate the levy using operating funds, producing no tax increase for taxpayers in that scenario.

Process and next steps: the board agreed to sign an order calling for a Bond Issue Notification Act (BINA) hearing to be held on March 20, followed by a resolution authorizing sale if the board decides to proceed in April. A rating update from a rating agency (staff suggested Standard & Poor’s) would occur before a planned May 5 bond sale; funds would be received in early June. The district noted tax-exempt bond rules require a “reasonable expectation” of spending 85% of proceeds within three years; staff believe the district could meet that test.

Quoted: Bob Lewis, financial advisor, summarized the legislative change that expanded access to life‑safety borrowing: “It now makes this available for all school districts,” and he described the two basic choices as “present‑day cost versus future cost, economies of scale in the bids.”

Board direction and conditions: board members asked about the impact of future growth on individual taxpayer shares, bond call provisions, the district’s credit ratings and possible use of existing debt service funds to cover an early interest payment. Staff said the district currently has funds in its debt service fund to cover the first interest payment (about $782,000 in the example) and that any annual abatement would require a board resolution each year. The board indicated general support for moving to a public hearing; specific authorization to sell bonds would come later if the board approves the resolution.

Ending: If the board approves the resolution in April and market conditions remain similar to the example presented, the district would lock a bond rate at sale (targeted May 5) and proceed with design and contractor bidding for construction starting in 2026.