Effingham CUSD 40 hears $55 million facilities financing plan; board shown tax, timing options

The Effingham CUSD 40 School Board on Tuesday heard a detailed finance presentation from Anne, a representative from Stifel, on options to fund a proposed Phase 1 facilities package that the district’s architects estimate at about $55 million. The package described to the board includes a new K–2 building with a gym, renovations at South Side and Central, and paving projects.

The presentation laid out three non-referendum borrowing tools the district can use: health-life-safety bonds for state-eligible safety items, working-cash borrowing drawn from the district’s statutory capacity, and a two-step funding-bond approach that begins with short-term debt certificates. Anne said, “You are using every tool in your toolbox,” as she reviewed how the pieces could combine to cover the $55 million estimate.

Why it matters: the plan would add long-term debt and increase the district’s property-tax levy if the board sells the full amount. Anne presented two illustrative payback scenarios: a 20‑year schedule that the district’s model shows would raise the district’s bond tax rate by about 47¢ (roughly a 13% increase versus current debt levies) and a 15‑year schedule that would raise it about 62¢ (about a 17% increase). The district’s median home value was noted as about $240,000; the presentation showed example impacts for a $200,000 home.

Key facts and figures from the presentation: the district currently has roughly $18 million of outstanding bonds issued in 2019; Anne estimated statutory, non‑referendum borrowing capacity at about $73 million and identified roughly $16.3 million of that as working-cash borrowing capacity. The architects told the presenter that roughly $3 million of the proposed $55 million would qualify as health-life-safety eligible, which could be financed by that simpler mechanism. The model used bond-interest assumptions in the mid‑4% range (Anne referenced a model rate of 4.65%).

How the financing would work: for portions that are not health‑life‑safety eligible, the Stifel plan would typically issue short-term debt certificates (a bridge loan sold to banks), begin a 30‑day petition period after a published resolution of intent, hold the required public hearing, and then sell bonds if no valid petition stops the sale. The presenter outlined a compressed example timeline in which the board approves issuance of debt certificates in April, receives the debt-certificate funds in May, starts the resolution-of-intent/petition process at the May 19 board meeting, holds a public hearing in June and sells bonds in July or August.

Board discussion and context: the superintendent told the board there remains an unmet facilities need even after three failed sales-tax referendums and asked members whether they still considered the projects necessary. Several board members asked how future sales-tax revenue would interact with bonds; Anne responded that a later sales tax could be applied to bond payments for bonds already sold if the board so chooses. Board members also asked about the audit/credit effects; Anne said increased leverage would be a factor but that the district is currently “very under leveraged.”

What the board did: the meeting recorded only discussion and no binding vote to issue bonds. The superintendent asked the board to be prepared to consider taking steps to authorize borrowing; no formal resolution to issue bonds was adopted at this meeting.

Next steps: administration and the board can choose to authorize some or all of the proposed borrowing (authorizations typically remain valid for three years), to stagger sales across years, or to pursue smaller packages. The board will need to weigh tax impacts, construction timing (architects indicated the K–2 building drives sequencing), and the possibility of revisiting a sales-tax referendum later.

Ending: board members thanked Anne for the analysis and asked staff to return with any additional details the board requested on phasing, projected levy timing and credit-impact scenarios.