The Hinsdale Township High School District 86 Board of Education will hold a special meeting Dec. 5 to decide whether or not to borrow $18 million to pay for air conditioning and other facility improvements at Hinsdale Central and Hinsdale South.
The majority of the board members at Monday night's board meeting at Central agreed to proceed with some of the first steps of the district’s Master Facilities Plan, which was adopted in 2010. Those steps include air conditioning classrooms at both schools that are not currently air conditioned at a cost of approximately $13 million. That price includes upgrading the existing electrical infrastructure at the schools to accommodate the air conditioning, as well as other HVAC improvements.
The nearly $5 million in additional expenditures would include almost $3 million for projects designed to improve circulation at entry points at both campuses and $2 million for renovation of science labs at Central. The four science labs at Central are in an older portion of the building and have never been renovated, according to Superintendent Nicholas Wahl.
“We’ve discussed last summer and in previous years, when you look at the school calendar, possibly ending first semester prior to winter break,” Wahl said. “For us to have that discussion … we need to move up the start of the school year. To consider that, you have to consider air conditioning spaces that are currently not air conditioned.
Having semester exams shortly after returning from winter break has been a frequent complaint of students at both schools. It has been argued that the distractions of the holiday period make it difficult for students to concentrate on studying for the tests, leading to poorer results.
“We believe that there is instructional value in ending first semester prior to winter break.” Wahl said.
Cost to property owners outlined
Bill Hofherr, senior vice president with the Kansas City investment banking firm George K. Baum, provided board members with an overview of funding options for the project. He said the district was using very little of its existing debt capacity.
“Your outstanding debt is $8,250,000,” he noted. “You’re issuing about 2 percent of your maximum debt.”
Hofherr said the district could issue an additional $36.2 million in bonds without needing a referendum. He said issuing bonds to finance the school improvements would increase the tax bill for the owner of a home valued at $300,000 by just fewer than $9.67 for the next three years. The owner of a home with a fair market value of $900,000 would experience a tax increase of just more than $30.25 yearly over the same time period.
Board member Jennifer Planson asked Hofherr about the positive and negative aspects of the different funding options the board was considering.
“Right now, the cost of money is very inexpensive,” Hofherr said.
In response to a question from Wahl, Hofherr said the district’s triple-A credit rating was one of the reasons the district could borrow money for as little as 3.5 percent interest. He said the district's strong credit rating was due, at least in part, to the ample surpluses the district keeps in its various funds and suggested that taking money from those surpluses to pay for school improvements could hurt the district's financial reputation.
“You maintain the highest credit rating because of your strong financial position,” Hofherr said.
Use of reserve funds explored
Some board members believe the district could dip into its reserves to pay for all or a portion of the improvements without damaging its credit rating.
“Our working cash fund right now has $7 million in it,” board member Dianne Barrett noted. “That hasn’t been used since I’ve been on the board.”
She said the district also has $9 million in investment funds that will become available for use at the end of December, as well as $4.5 million that will become available next February.
“My first choice is a referendum,” Barrett said. “My second choice is to use existing funds. … Personally, I don’t believe in increasing debt if we don’t need to.”
Board member Richard Skoda also voiced support for a referendum.
“My suggestion is for the board to figure out what they really need and go to the voters in this economy and say, ‘We really need this and we have a lot of very energetic people that believe in this,’” Skoda said.
Other board members have expressed their opposition to a referendum on the grounds that, if approved, it would actually cost taxpayers more in the short term. It also would mean delaying the improvements for another year.
Planson, who has sought a middle ground on some issues between the majority and the minority board factions, suggested that perhaps the district could use $1.6 million earmarked for summer projects to defray a portion of the $18 million price tag for the air conditioning project. However, a majority of board members expressed their preference to borrow the full cost. The board is expected to make a final decision at the special meeting Dec. 5.