Mandated critical safety capital improvement projects like replacing the roof at the Brookside campus of Waukegan High School are mounting for Waukegan Community Unit School District 60 and officials say the sale of bonds is the solution.
Able to use federal pandemic relief (ESSER) funds to overhaul or replace HVAC systems to make schools’ air cleaner the last few years, Gwen Polk, the district’s associate superintendent of business and financial services, said the source would not last forever.
“Over the past couple of years, I’ve said there would be a point where we would come to a cliff,” Polk said. “We no longer have ESSER money. There are still life safety projects (and) we have to pay for them but we still have to operate as an organization.”
The District 60 Board of Education voted 6-0 with an abstention Tuesday at the Lincoln Center administration in Waukegan to start the process of selling bonds in the amount of $30 million to fund necessary capital improvement projects in the next three years.
Along with starting the process for the bond issue, the board unanimously approved the two social service agencies that will occupy the Wraparound Center at the new administration building in downtown Waukegan.
With between 71% and 80% of the District’s operating budget paying for employees’ salaries, wages, and benefits, board President Brandon Ewing said reducing expenses to pay for things like a $10 million roof on a building does not work.
“We know the District is not only at a cliff, but the State of Illinois is at a cliff,” Ewing said. “In basic terms it’s unsustainable if we don’t take this action. The alternative is to cut our way to $30 million. There is not a lot to give.”
Elizabeth Hennessy, the District’s financial advisor with Raymond James, said in a video presentation at the meeting that these are working capital bonds that must be used for the capital improvements the District intends.
Under Illinois law, Hennessy said the District can borrow approximately $154 million for working capital bonds. With just under $5 million already outstanding, the sale is far below the limit. Existing debt will be retired in six years and the new ones in 11 years.
“It takes the pressure off the operating fund,” Hennessy said.
With a forecasted interest rate of 4.1% by the time the bonds are sold in July and at 3.6% now, Hennessy said it is an advantageous time to borrow. The money must be spent on capital projects within three years. Property taxes will increase by approximately $48.64 for the owner of a $250,000 home.
With the preliminary approval set, the board will hold a public hearing at 7 p.m. on May 28 at Lincoln Center and take a final vote when it meets on June 25. If the board approves the bond sale then, it’s scheduled to begin the following day.
Finding projects for the $30 million is not an issue. Ewing said it is a question of prioritizing the needs of the District like the Brookside High School campus roof. The wish list is long.
“We’re not guessing how we’re going to spend this $30 million,” Ewing said. “We already know these are things we legally have to take care of. We have to make difficult decisions. We’ve never had enough money to fund everything our students need.”
Board member Anita Hanna, who chose not to vote on the issue, said she could not support adding debt to the District’s balance sheet. She wants to see budget cuts that will not impact faculty pay or student programs “because we need them.”
“We’re going to be doing the bonds but we also need to be doing some spending reduction,” Hanna said. “The reduction needs to come from travel. We have to get creative.”
Wraparound Center Moves Closer to Opening
With final approval of the Wraparound Center’s two service providers — A Safe Place and Community Youth Network — set by the state, the board approved their agreements with the district. The tentative opening is in late May.
“I appreciate the hard work of our multiple teams,” Ewing said. “This has been an ongoing process since 2020. It’s been a four-year journey. We’re glad to see this take shape and come to fruition.”
