The discussion and ultimate approval by the Waukegan School District 60 board of $6 million in new debt to address pressing capital improvement needs was interrupted by a short power outage Tuesday afternoon.
“I think we need the money,” board President Michael Rodriguez said to a round of laughter.
The board gave its final approval to the loan proposal in a 5-1 vote with member Brandon Ewing the sole no vote and member Miguel Rivera absent due to a family obligation.
Ewing said he voted no because he thought the board should have shown “in good faith to the community exactly how we’ve been saving” money and what specific projects would be paid for using this loan.
“I just don’t feel like it’s the best decision right now,” he said. “I’m not saying ‘don’t.’ I don’t want to be misquoted. Our schools definitely need to be updated, but I would have liked to see it as a referendum with more community buy-in.”
A petition effort to force the issue to go to referendum garnered at least 1,500 signatures, less than the 3,777 needed, said Lisa Papandreou, a longtime Waukegan resident who had three children, now grown, go through the district.
Papandreou, who said she helped facilitate the effort but wasn’t the main force behind it, said referendum proponents plan on speaking to an attorney to see what the options are. She questioned why Tuesday’s vote was held during a specially called meeting that was held before a board committee, instead of during the regularly scheduled board meeting next week.
“That right there is shady,” she said. “I don’t think we can get it overturned, but we want them to be held accountable.”
It is not uncommon for the board to hold special meetings for “pressing issues” ahead of committee meetings, district spokesman Nick Alajakis said.
“By voting [Tuesday] we expect to be in receipt of bond proceeds in mid-June,” Alajakis said in an email. “Waiting a week would have pushed it back to late June. We have many capital needs that we hope to address over the summer, and a vote a week earlier will allow us to begin sooner, rather than a later.”
The vote was the final step in a three-part process that included a contentious, nearly hour-long public hearing where several board members raised concerns about the impact on taxpayers.
Those concerns appeared to be alleviated Tuesday evening as board members asked their bond counsel and financial adviser about how Waukegan compared to other area school districts.
“Our district is really not overextending like a lot of school districts in order to do capital improvements,” board Vice President Rick Riddle said. “We have a lot of leeway. We have a lot of money that we could take out or we could take it out for longer periods of time, and we’re not doing that. We’re very conservative.”
Board member Anita Hanna also pointed to nearby towns that, “have no problems investing in their children’s education.”
“I think we have to have a change of heart for our schools, for our children,” she said. “Everybody wants the children educated, and so we have to do the things that we need to do in order for that to happen. One of those things is investment in our schools here in Waukegan.”
Waukegan District 60 residents pay $9.41 per $100 of assessed value to the district, which was the 10th highest rate when compared to the 52 other Lake County unit school districts and combined elementary and high school rates, according to county data.
Rates range from a combined tax rate of 14.11 for Zion District 6 and Zion-Benton Township High School District 126 to 2.70 for Lake Forest District 67 and Lake Forest High School District 115, the data showed.
The two residents who spoke at Tuesday’s meeting about the bond proposal disagreed on whether Waukegan taxpayers could afford the proposal.
Resident John Frew pointed to the amount of unpaid registration fees in questioning whether Waukegan residents who can’t afford such fees could afford the plan while the other speaker, Mehdie Vakili, said the conversation shouldn’t be about cost, but instead investment.
“There is no better investment anywhere in the world – none,” Vakili said. “I defy any single person [on] this board, in this room that is going to stand up and tell me that it is a cost, that will show me an investment that will give me a rate of return that is higher than that of a school.”
The impact on taxpayers would be “very small,” said Elizabeth Hennessy, a managing director with investment firm William Blair.
The loan would be paid off using property taxes, according to district documents. Those payments would equate to about $5 a year for the owner of a $100,000 home for the first nine years, $63 in the 10th year and $151 in the final two years.
Because the district is set to pay off some its existing debts, taxpayers would still see the portion of their property tax bill going to school district debt fall over this time, but instead of that line item zeroing out in 2027, they would see the amount they paid in 2026 continue for an additional two years.
“Our kids are worth $5,” board member Jeff McBride said. “They were worth $5 when I was in school here. (Some) of the schools that we’re talking about that need infrastructure — those are the schools that I went to 60 years ago, and nothing has really improved.”
Under the proposed debt plan, the district would pay an estimated $276,000 each of the first 10 years and then pay off the loan’s principal in the final two years, according to district documents.
That means, assuming an interest rate of about 4 percent, the loan would ultimately end up costing $2.9 million in interest, because the district would be paying mostly interest until the final two years.
In order to open up some space under the district’s debt ceiling – the maximum the district can pay each year in debt payments without going to voters – so that it can pay the interest on the new loan, the district will also pay off some existing debt using another loan, said the district’s bond counsel, Kyle Harding of Chapman and Cutler.
That loan is estimated to run between $2 million and $2.5 million, said Hennessy, who also noted that the district has not borrowed out as many years as it is legally allowed to.
While there are other options to finance the projects, this avenue would be the “most cost effective way,” Harding said.
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