In a move aimed at lowering reserves and cutting taxes, members of the Winnetka Public Schools District 36 board have agreed to pay off bonds issued 10 years ago earlier than scheduled, a move district officials said amounted to paying taxpayers back $30 million.
The board unanimously approved repaying the bonds when it met March 21. The bonds are “callable,” which means they can be repaid earlier than originally scheduled. They were originally issued in 2007.
A March 22 press release from the district stated that by doing so, Winnetka homeowners can expect to see an annual estimated savings of about $320 per $10,000 tax bill, starting this year.
When the board passed its 2016-2017 budget last September, Greg Kurr, the district’s chief financial officer, said the then-expected bond repayment was part of a long-term effort to cut high district reserves. The budget itself cut existing fund balances by almost $340,000 and included plans to abate roughly $1.2 million in taxes, Kurr said at the time.
“Longer term, we want to maintain our fund balances at 50 to 60 percent of our annual expenses,” Kurr said then.
Betsy Owens, a member of the board’s finance committee, said March 23 that lowering both the reserves and homeowners’ tax bills is “an extraordinary step to take,” but said it was one way the board could engender a sense of trust between the community and the district.
The district’s reserves are high enough to withstand any legislative changes that might be enacted in Springfield to freeze property taxes or add pension payment burdens to school district budgets, she said.
“Even with what’s going on in Springfield (our reserves) felt excessive. We saw that even if we paid our bonds early, we’ll still have sufficient reserves to deal with what may or may not happen,” she said.
Owens thanked Kurr and William Blair, the district’s bond underwriting firm, for working through the mechanics of the early bond call.
Owens said the board worked on the financial plan for a long time, beginning as far back as 2013, when the board developed a financial philosophy stating that the district wouldn’t keep any money that wasn’t immediately needed.
“In turn, when we do have needs, we trust that the community will step up and support the schools,” she said, noting that the district is now studying its aging school facilities to determine their needs and craft a master plan for meeting them.
Twitter: @pioneer_kathy
