Schools
Lincoln-Way D210 Restructures Bonds to Reduce Tax Rate
Restructuring $225 million in bonds is expected to save taxpayers money.
The Lincoln-Way High School District 210 Board of Education Thursday approved a bond refunding resolution to restructure the debt in a way that reduces the total tax rate by 7-to-8 cents.
"We have explored options of either generating more revenue or helping our taxpayers by reducing the bond and interest rate. Unfortunately, we cannot generate any additional revenue, but we can take advantage of probably the lowest bond rate we may ever see and help reduce costs to our taxpayers," said Supt. Lawrence Wyllie.
In a presentation last month on the debt restructuring plan, Wyllie explained how restructuring $225 million in bonds would work to reduce the actual tax rate. .
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According to the tax rate should drop between 5-7 cents. At a minimum, the restructuring brings the rate down from $1.83 to $1.78. He likened the restructuring to a basic home mortgage refinance plan. When the rates drop below the initial percentage, homeowners typically refinance the mortgage to take advantage of the lower monthly cost.
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The entire process must be completed by Feb. 28 to be reflected on this year's tax bills. The time to sell the bonds and file documentation is tight, from Jan. 10-Feb. 28, he added.
"My primary question to our bond counsel involved restructuring our debt now and having a call factor built-in so we would have $200 million available in 2024-2026 to build a fifth high school in Manhattan if needed, and have no increase in the bond and interest fund at that time," Wyllie said.
The Board voted 7-0 to approve the bond restructure. In addition, the board approved resolution authorizing and directing the execution of an Escrow Agreement in connection with the issue of bonds not to exceed $232,500,000 refunding school bonds Series 2013.
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