OPRF Financial Advisors Reject Use of Debt to Finance Projects

0

Members of the District 200 Community Finance Advisory Committee have turned down the opportunity to take on debt to fund countless capital maintenance projects over the next decade at Oak Park and River Forest High School. Committee members met Feb. 3 via Zoom and discussed debt financing options that the school board and district administration have been mulling over in recent months.

During this period, school board members and administrators have fought over the issue of incurring debt to pay for district renovation projects, which include roof repairs, field restorations and upgrades, among other things. updated bathrooms and plumbing and drainage systems. Some of this work can be combined with the five phases of the district’s Imagine OPRF capital improvement projects. Phase 1 of Imagine OPRF, which aimed to renovate the high school’s south cafeteria, student resource center, visitor center and library, began in June 2020 and is expected to be completed by 2023. The first phase, which cost approximately $36.1 million, was funded from the district’s cash reserves. The district school board has yet to finalize or approve plans for Phase 2, where the project will center on the high school’s aging athletic facilities.

As district administrators looked to the next 10 years, they presented the board with a list of financing options, one of which included debt. This meant that the district could choose to issue a debt certificate or a debt service extension basis (DSEB) to fund future project costs. Debt certificates often rely on general school district operating funds to repay borrowed money, while DSEB bonds rely on tax levies, which impact residents. According to school documents, DSEB bonds can be issued without a taxpayer referendum to help fund capital projects.

At the Feb. 3 meeting, committee members cited the district’s healthy cash reserves of approximately $96 million and agreed on the need to prioritize, inventory, and find out more about the needs of the school building. The committee originally met on Jan. 18, but violated the open meeting law because the agenda was not posted on the district’s website. The district released a brief explanation, saying it made a mistake and didn’t catch it in time for the Jan. 18 meeting. The meeting, however, was still taped and can be found on the district’s website. Youtube channel.

In an interview with the Wednesday Journal, D200 School Board member Tom Cofsky, who sits on the advisory committee, said the district’s fund balance policy was among the reasons the committee advises against considering debt. . A key part of the policy states that the district should aim for an overall fund balance between 25% and 75% of operating cash flow, and currently the district is “north or above” those goals, a said Cofsky.

“To take on more debt at this time is not consistent with this policy,” Cofsky told the Journal, adding that the committee also discussed revising the fund balance policy, particularly with regard to the debt management. Cofsky said the policy as it stands focuses only on fund balances and provides little guidance on dealing with debt.

Cofsky told the Journal that in some ways, the conversations surrounding funding for major school district maintenance plans are leaning somewhat toward a “cart ahead of the horses” situation. Board member Kebreab Henry, who also sits on the advisory committee, told committee members and trustees at the Feb. 3 meeting that he would have a better understanding of the district’s finances once he understood exactly what funds are tied to the projects, including any changes. to Phase 1 as it nears completion next year.

“At the moment it’s not clear,” he said. “That’s a lot of guesswork for me.”

The school board was due to vote on the debt options at a Feb. 24 meeting, but Cofsky said that could now change depending on the advisory committee’s position.

“The [committee’s] The recommendation needs to come back to the board, and then the board needs to consider it to determine if action is required,” he said.

From Cofsky’s perspective, there needs to be more conversation before a decision can be made.

“What needs to happen going forward – and I’m not exactly sure when – is that we need to have a clear, forward-looking view of our needs,” he said. “We have to match that with our resources and say, ‘OK, we have to spend so much money for so much time doing this kind of work for our students.’

“And then we have this money available that we can allocate to that, and then we have to say, ‘What’s the gap?’ And how should we involve our community? I take it one step at a time, and I know people like to move forward, but that’s the process I see.

Share.

Comments are closed.