DeKalb School District 428 Board approves bond payment using TIF surplus

DeKALB – In an effort to improve its bond rating and pay down interest, the DeKalb School District 428 Board voted Tuesday to put forward $13 million to pay off bonds in 2019 and 2020.

The vote was 6-1, with Valerie Pena-Hernandez being the only “no” vote. The board decided to restructure the bonds after considering two options. They chose to use the $3 million the district was awarded from the expired tax increment financing district No. 2, in addition to $10 million from the district’s operating funds, to pay off bonds.

“I’m all for paying down the bond,” Pena-Hernandez said. “However, I think all these issues that we have in looking ahead at the different things that our buildings are experiencing, I’m not very comfortable with the amount set aside to do that.”

The option results in the highest interest savings over the life of the bonds, since the decision pays down the principal amount at the front end of the restructuring process, according to the agenda documents.

Board member Jeff Hallgren said paying down bonds doesn’t “feel as good” as supporting other programs, but he felt it is a necessary step for the district.

“I agree with you on some of these issues,” Hallgren said. “But long term for our children and for the people of DeKalb, it’s a huge thing, and I feel like we have that determination, we should do with that.”

Kerry Mellot pointed out that the bond rating would improve if the board to implement the payment plan.

“We do feel it in our bond rating,” Mellot said. “And if we pay down the bond, if we’re good with our loans, then the industry looks at us and says, ‘That district has got their act together.’ We do have an economic impact that happens rather quickly after the event.”

District 428 Finance Director Cynthia Carpenter also said the bond restructuring would also pay down the district’s debt.

The board also voted in favor of pay increases for a number of administrators, which includes a position change for DeKalb High School Dean of Students, Maurice McDavid, who will move into the assistant principal position at Cortland Elementary School beginning July 1.