During a regular meeting on Jan. 7, the District 97 Board of Education voted unanimously to issue the remaining $27.5 million of the $57.5 million in referendum bonds for building repairs that voters approved in April 2017. The district issued the first $30 million in bond proceeds last February.
The referendum bonds were issued to pay for life safety upgrades and critical building repair and maintenance at eight of the district’s 10 buildings, and expansions at Lincoln, Holmes and Longfellow schools.
The board approved a parameters resolution, which means that the final interest rates aren’t currently known. As long as they’re not more than a certain level, the board president has the authority to sign off on the transaction, said Rob Grossi, the district’s financial adviser.
“That is a very normal way for school districts to issue debt,” Grossi said.
The district selected Raymond James & Associates, Inc. to underwrite the $27.5 million bonds. They also selected the firm, which has two offices in Oak Park, to underwrite the $30 million issuance last year — a move that garnered some criticism from community members who felt that the board should have gone out for bid with other banks, board members said.
Elizabeth Hennessy, a managing director with Raymond James, told board members that the lack of a competitive bidding process did not mean that the district paid a higher price for the bonds than they would have if they’d went to bid.
“Last year, when this question came up, we looked at comparable prices,” Hennessy said at the Jan. 7 meeting, adding that D97’s bond yields were “lower or equal to” those of East Maine, a district that had gone out to bid for underwriters.
“That’s the kind of proof in the pudding we presented last year,” Hennessy said. “We’ll look for more negotiated and competitive deals this year, when we go into the market.”
Grossi vouchsafed for Raymond James, lauding the firm’s and Hennessy’s “stellar reputation” and the fact that the company has offices in Oak Park.
“In terms of a two-stage borrowing process, it’s very common to use the same underwriter in the second phase as you would in the first phase,” Grossi said. “From past experiences, their firm has always done an excellent job of selling where the bond should be sold … In some ways, having two Raymond James offices in the community is kind of like, ‘We know where you live’ mentality. There’s an added incentive for you to do a good job.”