The District 200 school board is considering an unethical funding scenario to circumvent voters and push through the $100 million-plus Project 2.
The board’s Community Finance Committee may make a funding recommendation at its next meeting. Five funding scenarios are currently under consideration for the project, which contains half of the school’s Physical Education facilities, including an aquatic center.
Scenarios 1 & 2 are straightforward. They consist of referendum bonds with different levels of cash reserve dollars. Referendum bonds are best practice in funding major capital projects, placing their funding on the ballot for voter approval and spreading out the cost of the investment over the life of the asset so that future residents who will enjoy the benefit help pay for it.
Scenarios 3, 4 & 5 include multiple borrowing tools and terms, including non-referendum bonds and debt certificates. They are included in these scenarios to circumvent taxpayers on their funding. Scenario 4 contains no referendum bonds.
While there would be no separate levy for debt certificates, D200 would have to levy more operating tax dollars than necessary each year to repay them. Taxpayers would bear this cost. Also important to underscore, scenarios 3, 4 & 5 are front loaded with borrowing which would place an unfair and greater tax burden on current residents.
Longtime residents would already be paying more for the project as millions of their overtaxed dollars in the cash reserve are being proposed to pay for this project.
D200 amassed a cash reserve of over $100 million in 2013 after nearly a decade of over-taxation, the result of an unethical board action using a loophole to take more tax dollars from an operating referendum than authorized. Ethically, the board should have returned all the unauthorized tax dollars years ago, but it didn’t, returning only a fraction.
To maintain the highest financial rating, a school district needs to keep 25% of its annual operating expenses in reserve. The purpose of a cash reserve is to cover funding delays during a given year. It is not intended to finance major capital projects.
Project 2 Proposed Funding Scenarios (page 5):