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School district board votes to restructure bond debt : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, Illinois
School district board votes to restructure bond debt
Move intended to ease property tax burden

by Lyle R. Rolfe

12/12/2013

Oswego School District Board members voted unanimously Monday evening to proceed with the restructuring or refinancing of three outstanding general obligation bond issues in an effort to reduce district residents' tax bills for a short time.

Under the approved restructuring plan, the district's obligation bond and interest tax levy will be maintained at $33.1 million for the next three years.

Thomas Chapman, managing director of PMA Securities, the district's financial consultant, said they are estimating a maximum cost to the district for the restructuring of $5.75 million in additional principal and interest to refinance up to $9,995,000 in outstanding bonds.

Chapman said they are hoping to sell the new bonds as soon as possible this week.

"The market is good right now. We're hoping to get a rate of about 4.5 percent, going out to 2032," he said.

He said the refinancing will flatten out the district's debt to $33.3 million over the next three years, plus the additional $5.7 million in interest.

The goal of PMA in planning the restructuring for the district was three-fold, according to information presented to the board.

The first goal was to maintain the current bond payments like a car payment, the second goal was to provide tax relief for the average property taxpayer, and third was to provide tax relief for nearly every taxpayer.

PMA had suggested the board stabilize or reduce the bond and interest tax levy over the next three years.

Chapman chose three years based on the belief that long-term restructuring (more than three years), is inefficient in the current market.

Three years would allow the district adequate time to review other options for tax relief and to reevaluate the objectives of the plan, PMA's report said.




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