Digital Access

Digital Access
Access from all your digital devices and receive breaking news and updates from around the area.

Home Delivery

Home Delivery
Want to make sure you receive the latest local news? We’ve got you covered! Get the best in local news, sports, community events, with focus on what’s coming up for the weekend. Weekly mail subscription offers

Text Alerts

Text Alerts
Choose your news! Select the text alerts you want to receive: breaking news, prep sports, weather, and more. Text alerts are a free service from Kane County Chronicle, but text rates may apply.

Email Newsletters

Email Newsletters
Sign up for free email alerts. We'll deliver news & updates to your inbox.

Geneva resident offers debt-reduction plan to District 304

GENEVA – As Geneva District 304 ponders how best to tame its future debt payments, a district resident with expertise in municipal bonds has offered a different scenario.

Dan Garrett, who lost a recent bid for the school board, met with district officials this week to discuss his proposal. Garrett said he plans to present his debt-reduction strategy at the next Finance Committee meeting and school board meeting, both on Monday.

The finance meeting is at 5:30 p.m. and school board at 7 p.m., both at Williamsburg Elementary School, 1812 Williamsburg Ave., Geneva.

The district’s challenge is how to contain increased annual debt payments on its 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.

Instead of supporting any scenarios presented recently by the district’s bond underwriter, William Blair, Garrett recommended the district use a portion of its cash reserves to buy back some of its bonds.

“Using your own money to call bonds, that should be one of the options,” Garrett said.

In a nine-minute online video at, Garrett explains his proposal.

“Take $30 million from $60 million we have in reserves and invest in our bonds, and make interest on it. In 2017, it is the first time we can pay debt back early,” Garrett said. “Every time we call some bonds, we save interest on that amount. So after three or four years, we’re saving $1 million every year by having paid that off early.”

Following the debt payment schedule over the next 11 years, Garrett said the district not only would save $11 million – $1 million per year – it would save $15 million in interest.

“It’s a pretty good return to avoid all that interest,” Garrett said. “The problem with the William Blair plan is, it does not pay anything off early, it just shifts payments around. And as long as we do not issue new debt, we would avoid all the fees.”

Garrett said his plan would smooth the payments and eliminate the spike in debt payments.

“There is no risk,” Garrett said. “We still have $30 million invested and $30 million in the bank.”

Garrett met with Superintendent Kent Mutchler and Assistant Superintendent for Business Services Donna Oberg this week to discuss his proposal.

“It is always an option to look for bonds on the market that we can purchase,” Oberg said. “Those come very rarely and sparsely. [William] Blair looks for them, and we need resolutions from the board to move forward on it.”

But Oberg said Garrett is mistaken that the district has $60 million in reserve. 

“That is the fund balance at the end of June. That has early tax dollars in there,” Oberg said. “Those dollars have to pay for the whole year before we get more tax dollars in there.”

Oberg said the only reserves are $14 million in a working cash fund used for in-district cash-flow loans.

“It’s not our savings account – it’s the fund balance,” Oberg said. “When we say reserves, that is what we have left after we bring in all our revenues and expenses. But that changes at any point in time, from month to month, we have revenue coming in, expenses going out. It’s a moving target.”

Garrett disagreed.

“Call it whatever she wants. Nine [fund] balances are adding up to $82 million,” Garrett said. “The district still has got a lot of money to enact a debt repayment plan.”

Loading more