Facts about debt restructuring and the proposed $66 million referendum for Champaign schools:
– Debt restructuring costs included more than $128,000 to bond underwriter Stifel Nicolaus: $59,000 for issuance and $47,000 for insurance that raises the district's rating to AAA and generates interest savings.
But Chief Financial Officer Gene Logas and Mary Kane of Stifel Nicolaus say it will save the district a lot of money at the front end. Savings will amount to an estimated $700,000 to $900,000 a year in debt service for five years. That money ideally is to be invested because at the back end of the bonds, beginning in 2012, debt service costs go up from about $1.2 million a year to about $2.7 million a year for six years.
– Contracts for Stifel Nicolaus and BLDD Architects were both let on speculation after the district asked for requests for proposals from firms recommended by other school districts. That means they don't get paid if the ballot measure doesn't pass. BLDD estimates the cost of its pre-referendum services at about $50,000.
The architects' contract says if the referendum doesn't pass and the district builds two strands north of University Avenue, as required by the consent decree, the firm will be paid $50,000 for 'programming costs' for the new construction.
Stifel Nicolaus, which is helping the district promote the referendum, is making about $129,000 underwriting working cash and refinancing bonds just approved by the board but won't get additional money if voters don't approve it.
– The building referendum would increase the tax rate for schools by 4.7 cents, which would cost the owner of a $150,000 house about $2 a month, Logas said.
He projects that the rate, which is set by the county clerk, will drop about 6 cents next year because of increases in assessed valuation and will decrease another 5.6 cents because the district refinanced outstanding debt, down a total of about 11 cents. Issuing working cash bonds increases it 8.2 cents for a net decrease of 3.3 cents. Issuing building bonds would increase it 8 cents for a net increase of 4.7 cents.
– But in reality, assessment increases, which the school district can't control, are the biggest factor determining tax bills – and they keep increasing. For example, the 1997 referendum to build Stratton and Barkstall was billed as revenue-neutral, a replacement tax for retiring debt. In reality, a home in southwest Champaign with an assessed value of $30,240 that year was billed $1,320 for schools.
But assessed value for 1998 taxes was increased to $36,950, and taxes paid for schools shot up almost $300 to $1,590 even though the rate dropped slightly and has continued to drop every year. The tax bill for schools for the 2004 assessment, $46,000, payable in 2005, was $1,806.