Dixon schools borrowing $4.5M to start financing 20-year curriculum plan

DIXON – The Dixon School Board has approved a resolution to issue $4.5 million in working cash fund bonds as part of a long-range financing plan to keep the district current on curriculum, technology and social-emotional services through 2045.

In December 2022, the board was presented with a long-term financial plan to improve the financial position of the district. The first step, approving $650,000 in taxable general obligation refunding school bonds, was completed in February 2023. The board took the next step at its Nov. 20, 2024, meeting by declaring its intent to issue $4.5 million in working cash fund bonds.

[ Dixon schools OK $650,000 in bonds, first step in long-range financial plan ]

A contracted team from Stifel Public Finance and Speer Financial – two municipal adviser firms that specialize in debt issuance – then put the the bond series out for bid. The winning bidder was Sauk Valley Bank agreeing to issue the full $4.5 million at a 4.8% interest rate, DPS Business Manager Marc Campbell said at the board meeting Wednesday.

“It should not, or will not, raise the tax rate that our taxpayers are paying,” Campbell said.

As opposed to the $650,000 bonds issued in 2023, the district will actually receive $4.5 million to deposit into its working cash fund.

As a working cash fund bond, those dollars cannot be spent by district administration without prior board authorization. Any spending would be brought before the board in the form of a resolution during a regular meeting.

“Over the next few months and years, because it is our intention to use these funds over the years, you will be brought updates and requests,” Campbell said. “Ultimately, our vision has not changed.”

The funds will be used for the district’s one-to-one initiative, ongoing updates to curriculum, major construction projects and staffing for social-emotional needs - which is all part of the district’s long-term financial plan.

In that plan, this $4.5 million working cash fund bond issuance is only the first in the short-term borrowing plan. Every five years, the plan has the district paying off the bonds and then reissuing the debt for capital.

The underlying objective is to wean the district off long-term borrowing – it already has four debt service bonds issued in 2014, 2016, 2017 and 2019 – and instead implement a regular schedule of more modest short-term borrowing with lower interest rates that can be paid off with available resources, such as working cash gained through internet sales receipts.

In 2030, the district will borrow $4 million for new tech and curriculum. In 2035, borrowing another $4 million can pay off the 2036 and 2038 revenue bonds. In 2040, borrowing $4 million again will be used for tech and curriculum upgrades.

If cleared of the debt service bonds in 2045 – which coincides with the expiration of the tax increment financing district and the addition of the TIF properties into the tax rolls – the expectation is that the district would be free to borrow up to $10 million if it desires.