Corporation (DSC) property-taxpayers will see a fractional increase in their
bills, beginning in 2019, following the School Board’s action at its meeting
Monday night to transfer payments on an outstanding $4.22 million
lease-purchase agreement--currently being made through the Capital Projects
Fund--to the Debt Service Fund.
That move is
projected to increase a taxpayer’s dedicated debt-service rate by a maximum
of $0.024, declining to $0.0139 by the final year, in 2024.
Thus, in 2019, the
owner of a home with an assessed value of $100,000--after standard,
supplemental homestead, and mortgage deductions--will pay about $7.86 more
per year; the owner of a home with an AV of $150,000, about $15.66 more; and
the owner of a home with an AV of $250,000, about $31.26 more.
By 2024, the owner
of a home with an assessed value of $100,000 will pay about $4.55 more per
year; the owner of a home with an AV of $150,00, about $9.07 more; and the
owner of a home with an AV of $250,000, about $18.10 more.
lease-purchase agreement dates to 2009, when DSC undertook a package of
district-wide energy-efficiency projects. The total cost of the package:
$9,304,254, to be re-paid over 15 years at an annual interest rate of 1.6
percent. As Superintendent Ginger Bolinger noted at Monday’s meeting, “This
financing arrangement was attractive to investors (at the time) because it
came with an annual federal tax credit savings to the investor,” made
possible through a federal program “put in place with the intent to
revitalize and help jump-start the U.S. economy.”
Re-payment on the
package began in 2010 and since then those re-payments have been made
through the Capital Projects Fund, not the Debt Service Fund, which
was still paying down on the $13.9 million in emergency loans secured by DSC
in the wake of the Bethlehem Steel Corporation bankruptcy in 2002. Those
loans were necessary, Bolinger said, because the bankruptcy “immediately
affected Duneland’s receipt of property-tax revenue without a viable
replacement for it and no opportunity to instantaneously reduce, limit, or
adjust expenditures as a result.”
loans were retired in 2013 and since that time, Bolinger said, some other
debt has been retired as well: Pension Severance Bonds and Liberty
Elementary Additional General Obligation Bond. Those debt-service
retirements prompted DSC to “consider converting the remaining $4.2 million”
on the lease-purchase agreement through the Debt Service Fund through the
balance of the term, 2019-24.
conversion is not absolutely tax-rate neutral,” Bolinger noted. “However, it
is relatively minimal at an estimated maximum impact of $0.024. As the
existing debt matures, the estimated impact also declines to approximately
The School Board
voted unanimously to approve the payment conversion recommended by Bolinger.