Cary Grade School President Scott Coffey has a suggestion for the McHenry High School board:
Given that D-47 just issued $9.2 million in bonds in June with roughly an average yield of 3.0%, a similar rate on D-156’s $44 million in new bonds would generate a little over $10 million interest costs over the 15 year repayment period.
That also assumes they don’t jack up the bond’s coupon rate in order to generate additional bond premium to be used to pay all the fees for underwriting/legal/etc.
It looks like $22.5 million (plus $5 million in interest) will be spent on developing the Freshman Center (East campus).
Per the State, FY17 Freshman enrollment was only 561 students.
Per the FY19 Budget it costs the district $3.3 million, excluding CapEx, to operate the two facilities (or $1.65 million per building).
Between the annual principal and interest costs of $1.8 million ($27.5 mil over 15 years), plus the annual operating budget for the East campus of $1.65 million, the total fixed costs over the next 15 years to instruct 561 Freshmen in a 100+ year old building will be approximately $3.48 million.
A more sound financial approach would be to centralize instruction at one campus and shut down the East campus to generate savings.
Then utilize the annual operating expense savings from taking East off the books, plus any other efficiency savings recognized by centralizing instruction to one campus (eg. Admin/Transportation/etc.), to mitigate the effects of the debt service expense incurred to expand the West campus.
Its not hard to envisage those annual savings approaching $2.5 to $3.0 million.
That gets the District awfully close to self-funding almost the entire debt service load over the 15 year loan period.