The District 233 school board got an exceptionally low rate of 2.8% to finance its $20 million bond sale to cover costs of a new science wing and other projects at Homewood-Flossmoor High School.
The sale to JP Morgan Chase was finalized Tuesday, June 28.
The board initially planned to go the traditional route into the bond market, but on advice from financial advisor Bob Lewis of PMA Securities LLC, the board advertised for the sale of the bonds to banks. Four banks bid with interest rates from a high of 3.72% to the winning bid of 2.81%.
“You really got in at the last possible time,” Lewis told board members at their June 21 meeting. “The morning you took bids, that was the morning the new CPI (consumer price index) came out. It was much hotter than the markets anticipated…Thankfully JP Morgan hadn’t really updated for what was taking place in the market. We were able to get the (2.81%) rate locked in that day.”
Lewis said had the board stuck with its original plan and gone into the bond market for the sale, the rate probably would have been in the range of 3.4% to as high as 3.9%.
“It was a good decision by the board to proceed and take advantage to get that locked in before any more volatility in the market,” Lewis said.
Board President Gerald Pauling thanked Lawrence Cook, chief school business official, and members of the board’s finance committee for their efforts.
Board member Debbie Berman concurred. “I really do want to thank the Finance Committee, Dr. Cook, Dr. Mansfield (retiring superintendent), Dr. Wakeley (incoming superintendent) for having the foresight of acting and not waiting.
“We know when we waited it cost a lot more money in the past (for the Fine Arts wing addition), and this really will be able to enable us to continue to move H-F forward. …Really this was another fine example of the quality of our administration and the quality of the board members on the finance committee to really think ahead to make sure we can do what we do in the most cost-effective way possible,” Berman said.
The funds will cover the costs for a new science wing onto the South Building at Homewood-Flossmoor High School and other building updates. Planning and design of the space will begin shortly. The administration has worked with science teachers to learn what designs they would like in the new space. The timeline calls for construction contracts to be approved in December with work beginning in March 2023. The new wing would open in July 2024.
Once the science wing is complete, the district will remodel the space now used as science classrooms for other student uses.
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