After more than an hour of debate, members of the Community Unit School District 7 Board of Education voted 5-2 Monday night to approve a resolution authorizing the sale of $1.6 million in alternate revenue bonds to finance capital improvement projects, including safety projects, over the next three years. In a separate action, the board also voted 5-2 to proceed with projects to add restrooms to the press box at the baseball field and to construct a combination press box and concession stand with ADA-compliant restrooms at the softball field. The total cost for both projects is estimated at $534,187.
“You’re not officially locking anything in tonight,” Kevin Wills of Bernardi Securities, O’Fallon, told the board. “All you are saying is that you authorize the President and Superintendent to sign off on up to $1.8 million in bonds, as long as the bond issue fits within the parameters of the resolution.” Specifically, the resolution calls for issuing $1.6 million in bonds to be paid back over 10 years with revenue the district receives from the county School Facilities Retail Sales Tax.
Because a revenue stream exists for repayment and no additional tax levy is required, the board was able to approve the bond issue without seeking voter approval via referendum. However, the resolution includes a provision to levy a new tax if the sales tax revenue is not enough to service the debt before the bonds are retired. Supt. Shane Owsley has previously reported the district receives about $400,000 from the School Facilities Sales Tax. Wills said the annual payment to retire the bonds will be about $200,000—roughly half of what the district receives in sales tax revenue—plus $75,000 the district has pledged in the form of property tax abatement.
The bond sale does not count against the district’s debt ceiling, though its future borrowing power could be limited by revenue over the coming decade.
The issue is complicated by more than $600,000 in safety-related projects on the district’s “wish list” that could be partially funded with grant revenue if a pending grant application is approved. Owsley said he hopes to hear in July whether or not CUSD 7 will receive a grant from a School Violence Prevention Program administered by the federal Community Oriented Policing Services of the Justice Department. The maximum award is $500,000 and recipients must match the grant with 20 percent local funds. CUSD 7 is one of more than 800 applicants hoping to be awarded a share of $15 million in available funds.
The delay in learning the status of the district’s grant application also plays a role in getting projects underway. Some projects Owsley said he would liked to have started over the summer break cannot get underway until after the district learns if its grant application is successful.
Projects that could be funded with grant money include covering windows with bullet-proof film, additional security cameras, installation of metal detectors and upgrades to the fire alarm system at Gillespie High School/Middle School. Owsley said there were some projects he would recommend regardless of whether or not the grant is awarded, but he warned against approving those projects before the award is announced. If the district were to receive the grant after projects are started, he pointed out, the district could not reimburse itself with grant money for those projects.
Apart from safety projects specifically related to the potential grant, Wills said the board could initiate projects now, using money from its capital improvements budget, and reimburse those funds after the bond sale is completed.
In addition to the projects at the baseball and softball fields that were approved Monday night, the list of potential projects include renovating the high school weight room at an estimated cost of $292,000, and creating a front drive and parking area for the high school building at an estimated cost of $726,000.
Estimated costs for the proposed projects approach $2.1 million—about $500,000 more than the bond sale will generate. A grant award would close that gap; otherwise the board and administration is expected to winnow down the list of projects to match the district’s financial capability.
“If you come up with a project list that is creeping toward that $1.6 million mark, your only option is to extend the term or increase your payment and go to $1.7 million or $1.8 million,” Wills said.
“I would not recommend that,” Owsley advised, pointing out that financial windfalls the district recently received in the form of COVID-19 pandemic relief is drying up. “I would not be comfortable with that.”
Based on current market conditions, Wills said he expects the interest rates for the bonds to range from 3.8 percent to 4 percent. Answering a question from Owsley regarding timing, Wills said he would need to be notified by the end of June to initiate the bond sale if the district wanted the money in hand by July 15, or the end of July to deliver the money by Aug. 15.
Board member Weye Schmidt expressed considerable discomfort with the prospect of committing the district to 10 or more years of debt. Noting that Wills confirmed the bond issue could be extended another three years, Schmidt commented, “We’d be hamstringing the district for 13 years. I’m not comfortable with that. We don’t know what’s coming up in 13 years.”
Responding to a question from Schmidt, Wills also confirmed the district did not have the option to refinance the bond issue if interest rates dropped. “That’s not the way municipal bonds work,” Wills said. Additionally, municipal bonds generally cannot be paid off early.
“We can build on an eight-year early payment provision,” Wills said. “We may not have as many buyers at eight years. They may want nine, they may want 10. But I’m reasonably sure we could have an eight-year call feature.”
“Would you be comfortable with 10 years with an eight-year callback feature?” board member Peyton Bernot asked Schmidt.
“No,” Schmidt replied. “I don’t think so.”
Schmidt said he believed the projects under consideration were “good projects” but that not all of them were actual “needs.”
“Something could come up in five years that is a need,” Schmidt said, and the district would be unable to borrow money to address the need because of the long-term bond debt. “I’m not opposed to the projects. I’m not comfortable with the schedule.”
Board President Mark Hayes said the district has never touched money it received as a settlement for the loss of Benld Elementary School, nor has it touched revenue from a $2 million bond issues. “We have money for emergencies,” he said.
He suggested breaking the list into two phases to be financed with five-year bond issues of approximately $1 million each.
“There was a time we didn’t have this money coming in,” Bernot said, referring to the School Facilities Sales Tax revenue. “I wouldn’t see a problem with $1.8 million over 12 years.”
Schmidt was joined by Dennis Tiburzi in voting against the resolution defining the parameters of the bond sale. Hayes, Bernot, Amanda Ross, Bill Carter and Kelli Vesper all voted “yes.”
Schmidt and Tiburzi also cast negative votes on a motion by Hayes, seconded by Bernot, to proceed with projects at the baseball and softball fields.
Wills noted the 30-page resolution approved Monday night sets the parameters for the bond sale only. The actual sale of bonds will not occur until the board notifies Bernardi Securities to put the bonds on the market. Conceivably, that notice could be delayed until after the district learns the status of its grant application in July.
In a somewhat related matter, the board voted unanimously to a request for qualifications for a new Architect of Record to represent the school district. The new architect presumably will be the point agency to design upcoming projects, develop bidding specifications, and work with contractors. Graham and Hyde Architects, Springfield, formerly served as the district’s Architect of Record, shepherding major projects such as the BenGil Elementary School and middle school science lab.
Owsley said the Request for Qualifications would be posted on the district’s website and published locally. In addition, he said he would send it to architectural firms in the region that have expressed an interest in the position.
PERSONNEL
Following an hour-long executive session to discuss personnel and other issues, the board voted unanimously to appoint Casey Sholtis as Dean of Students for the coming academic year.
In other personnel action, the board:
- Accepted the resignation of Bill McCourt as a district custodian and posted the position as vacant.
- Accepted the resignation of Andrea Williamson as prom sponsor and posted the position as vacant.
- Accepted the resignation of Jessica Kelly as head high school women’s track and field coach, and posted the position as vacant.
Board members also voted unanimously to rehire the following winter coaches: Kyle Lamar, GMS Scholar Bowl; Celia Jubelt, GMS eighth grade girls volleyball; Elizabeth Thackery, GMS seventh grade girls volleyball; Chase Peterson, GMS eighth grade boys basketball; Darian Gill, GMS cheerleading; Korean Clark, GMS seventh grade boys basketball; Kevin Gray, GHS head girls basketball; Nikki Brawner, GHS assistant girls basketball; Matt Brawner, GHS volunteer girls basketball; Casey Sholtis, GHS head boys basketball; Jake Kellebrew, GHS assistant boys basketball; Eric Bogle, GHS freshman boys basketball; and Jarrod Herron, GHS Scholar Bowl.
STUDENT HANDBOOKS AND JOB DESCRIPTIONS
The board approved student handbooks for the coming academic year, that Schmidt pointed out discrepancies between board policy and handbook items.
“Does the district policy supersede the student handbook?” he asked.
Owsley responded that board policy would supersede handbook policy if there is a discrepancy.
Schmidt noted that the middle school policy regarding misuse of cell phones includes a provision for a warning, while the high school handbook calls for an immediate Saturday detention with no warning. “I would think those would be fairly similar,” he commented.
High School Principal Jill Rosentreter said, however, that the high school policy has always been more stringent on the assumption students in high school are aware of what’s permissible and what is not.
Schmidt also questioned why the dress code for high school is less stringent than for middle school. The high school handbook, he noted, eliminates a requirement for leggings and permits pajama bottoms. Rosentreter replied that distinguishing between actual pajama bottoms and sweatpants can be difficult. Moreover, she said, dress code violations have not been a major disciplinary issue at the high school level.
“Have we had issues? Yes,” she said. “Is it a huge issue? No.”
While the board voted unanimously to approve district job descriptions, President Hayes indicated some descriptions are in need of revisions.
“I think these job descriptions need to be cleaned up,” he said. “There’s lots of overlap and there are so many job descriptions that shouldn’t be there.” He noted one job description for a “history/drafting” teacher, instead of separate entries for each discipline. He also noted multiple job descriptions for a dean of students when there is only one position with that title for the district.
Owsley said he would work with staff members to update job descriptions on an ongoing basis.
BUDGET ISSUES
The board voted unanimously to direct Owsley to develop a tentative budget for fiscal 2024 and to place on file for public review an amended 2023 budget. Owsley said he would present details regarding the amended budget during the June board meeting, as well as an overview of the tentative 2024 budget.
In a related matter, the board voted to extend fiscal 2024 bunds to cover the cost of salaries and supplies from June 1 until the new budget is adopted.
OTHER ACTION
In other action, the board:
- Approved a course description book for the 2023-24 academic year.
- Approved final amendments to the current school calendar.
- Approved a dual credit agreement with Lewis and Clark Community College.
- Approved renewing membership in the Illinois Elementary School Association.