Kaneland D-302 pledges to restructure existing debt without a tax increase

Kaneland District 302 intends to restructure its existing bond debt, so if voters approve a nearly $140.3 million referendum April 1, officials will be able to enhance facilities without increasing the bond and interest tax rate, according to a news release.

The district’s bond and interest tax rate is 0.97 per $100 equalized assessed valuation, which the district pledges to keep the same, district spokesman David Chavez said in an email.

The approach allows the district to make necessary improvements without adding an additional financial burden to taxpayers, according to the release.

Pending a successful referendum in 2025, the district intends to borrow additional funds for new projects. Instead of waiting to fully pay off the existing loans, officials plan to restructure a portion of the district’s bonds.

This process allows the district to organize payments so that it can take on a new loan while continuing to meet the existing obligations on the previous debt.

The district would refinance only a portion that is necessary – $14.235 million of principal. Unlike a household mortgage or car loan, the district does not need to refinance the entire amount, according to Chavez’s email.

The bonds that would be refinanced in the referendum plan were issued in 2009 and 2015.

After Feb. 1, when the district pays its annual principal payment, it will have $36.64 million of current and future principal due through Feb. 1, 2029, according to Chavez’s email.

The ballot question asks if votes will support the district to issue $140,274,000 in bonds.

Bonds are loans that allow public bodies to invest in significant projects such as constructing new schools or renovating existing facilities.

School districts commit to repaying the borrowed funds over time, using the property taxes paid to it.

District 302 has three years remaining on the repayment of money it borrowed for Kaneland Harter Middle School, comparable to nearing the completion of payments on a personal loan, according to the release.

The district has critical infrastructure needs and safety issues that need to be addressed, according to its referendum information.

These include at the high school, middle school and elementary schools – from mechanical systems to HVAC and floor and roof replacement to repurposing outdated classroom spaces, according to its referendum information.

District officials believe the time is right to initiate additional projects to benefit students and the community.

The district’s pledge to the community is clear. Even though the district seeks to borrow more, officials commit that annual payments on the bond and interest levy will remain unchanged.

Much like managing monthly payments on a car loan, the district’s goal is to start a new investment with no bond and interest tax rate increase.

While restructuring the debt does involve some costs – similar to fees associated with renegotiating a loan – the projected expenses are expected to be lower than the potential increase in project costs if officials were to delay.

Investing in infrastructure now can be compared with buying a vehicle before prices rise, ensuring that the district remains ahead of construction cost inflation, according to the release.

District 302 encompasses 140 square miles in southwestern Kane County, serving more than 4,000 students in all or portions of Aurora, Cortland, Elburn, Kaneville, Maple Park, Montgomery, North Aurora, Sugar Grove and Virgil.

It has a high school, middle school, four elementary schools, a personalized learning academy and is home to the Fox Valley Career Center.

Detailed financial information will be made available soon online at www.kaneland.org/referendum.