Voters in Homewood District 153 will be asked in a March referendum to give a bit more for two years to support Willow, Churchill and Hart Schools.
The Homewood District 153 Board of Education Monday passed a resolution calling for a March 15 referendum “that will allow the district to keep its debt service payment level” for the next seven years, said Linda Matkowski of City Securities Corp., the district’s financial advisor.
Matkowski gave the example of a home valued at $100,000. In 2017 and 2018, there will be a bump of $70 in additional taxes. For the remaining five years, the rate would fall back to the approximately $275 in referendum-approved taxes those homeowners are paying now.
Matkowski said leveling the payments over the seven years will help the district hold the line on major balloon payments on the debt at the end.
The ballot question will ask voters to approve the sale of up to $9 million in working cash bonds over a seven-year period.
This will be the second referendum Homewood voters will be asked to approve in a five-year window. It is necessary because the district “cannot increase taxes more than the tax calculation formula allows without holding a referendum to request the money we need to maintain our programs,” Business Manager John Gibson said.
In 2011, voters overwhelmingly approved a referendum that gave the district authority to sell $7.5 million in working cash bonds to help cover fiscal shortfalls as property values dropped and state aid was reduced.
That $7.5 million is running out, and board members said they have to go back to taxpayers for support. Board members said approving the referendum will keep the district financially sound as the schools continue to offer their outstanding programs.
Gibson said the district has structured the referendum with the two-year overlap due to concern of the timing of tax collection. There is a lag between when voters approve a referendum and when the taxes are collected.
“We need to receive cash before the balance falls below our 25 percent of expenditures threshold, so the bonds need to be sold soon enough so we do not run out of money,” Gibson explained.
The lag in collecting taxes affected the district the last time as well. Although voters approved the referendum in spring 2011, Gibson said taxes weren’t levied until 18 months later.
Matkowski expects the board will likely only sell $8.5 million in bonds. Matkowski recommends the district plan for two bond sales – selling about half the working cash bonds shortly after the referendum is approved in 2016, and the other half about two years out in 2018.
The school board’s decision in November to close Millennium School in June 2016 is expected to save $600,000 in the budget but state aid continues to decline. Board president Shelly Marks said the district has lost more than $2 million in state aid over the last five years.
There is no expectation that the state will adjust funding to meet its obligation for full funding.
“What they don’t give us we don’t recover,” said Marks.