GENEVA – Although not exactly borrowing from Peter to pay Paul, Geneva School District 304 officials are pondering strategies of how best to contain its future debt payments.
The problem is the increased annual debt payments on the district’s various building bond issues. The district’s payment for 2013 was $18.7 million, but it is scheduled to go up to $20.3 million for 2014, $22 million in 2015, $23.6 million in 2016, up to nearly $25 million in 2018.
Elizabeth Hennessy of William Blair and Company, the district’s bond underwriter, presented various scenarios at the school board meeting Monday of how to “flatten” the debt payment to a more manageable $19 million.
The district’s debt is about $310 million covering bonds or loans going back to 1998, records show.
Options to try to mitigate those high payment years include using abatements from surplus cash, refunding and “defeasance,” where the district would set aside cash to pay off the bonds, as well as extending the debt service another three years.
Hennessy’s presentation included pros and cons of each scenario.
Board president Mark Grosso said the district’s debt service was “laddered” to spread out the payments and depended on new housing and additional residents to help pay for it.
“In 2007, the economy went down and housing stopped in Geneva,” Grosso said. “We want to flatten that [debt] out to mitigate the increases during the spike years when it’s really going to go up.”
Board member Bill Wilson said when the economy started tanking in 2007, taxpayers began seeing large increases in their tax bills of $500, $600 and more.
People told officials they could budget for small increases, but not the big increases every year, said Wilson, so the district made efforts to help reduce their impact.
Officials said the finance committee would be looking at the scenarios to figure out which ones might work best.