Dec. 17--School District U46 board members heard for the first time Monday night about a "zero interest" bond opportunity that could help the district mitigate its leaking cooling towers, calcified pipes and other seemingly endless maintenance issues found in buildings across the sprawling district.
A recently announced state bond opportunity would allow the district to issue $50 million in bonds, with zero percent interest for the first 20 years of the bonds' life, district Chief Operating Officer Jeff King told the board.
The interest rates on the bonds would stay below 1 percent for the final five years of the 25-year issuance, according to estimates, King said.
The bond money would have to go toward in-building projects, things like boilers, cooling towers and other aging equipment for which the district spends a "significant amount of money" on maintenance and repairs, King said.
If the board votes next month to approve the district's application to the Illinois Board of Education, the district would have to repay the bonds at about $2 million annually, but could do so out of its operating fund, negating any need for an additional tax levy, King told the board.
The program is a remnant of the American Recovery and Reinvestment Act, a Great Recession-era federal stimulus program, CEO Tony Sanders said.
While Chicago received $500 million of Illinois' $1 billion stimulus allotment, the remainder was only recently handed over to the state board of education, King said.
The program would offer a federal rebate for interest accrued over the first 20 years, resulting in zero interest on the bonds for that time, King said.
He noted that this opportunity came to the district on short notice.
"We basically got 10 days to put an application together, get it in front of you and then try to seek your approval in less than a month," King said.
District officials conducted a needs assessment of all the schools' mechanical systems after getting word of the bond opportunity and found more than 71 pieces of equipment that have met or exceeded their life span, King said.
This bond money will help address about a quarter of those, he said.
Addressing these issues could save the district between $1.5 million and $2.5 million annually in emergency calls, repairs and maintenance, he said.
King pointed to the cooling tower at South Elgin High School as emblematic of the district's costly maintenance issues.
The district is considering bringing in portable cooling equipment next spring due to the cooling tower failures, he said.
"We're not sure the system is going to work," King said. "It's leaking water like a trough."
While South Elgin is only about a decade old, King said the warranty on such systems is usually only 1 to 2 years.
Other issues to be addressed would include replacing the '60s-era electronics that power some district elevators, replacing leaky roof membranes and removing Elgin High School pipes heavily calcified by the local hard water, according to district documents.
Also included in the application are projects to add rooms to Coleman, Highland and Laurel Hills elementary schools, according to district plans.
The zero-interest bonds would allow the district to start tackling the maintenance issues at "an accelerated pace and expend the number of project we could start looking at," King said.
King said many of the fixes afforded by the bond issuance would address systems that everyone takes for granted until they fail.
"Nobody sees the pipe," he said. "They only notice if the water stops flowing."
geoffz@tribpub.com
