Under one of the articles about the McHenry County Conservation District tax hike bill just passed there is an interesting debate between anonymous Whackomole and bond analyst Steve Willson.
I think it deserves broader readership than just those who read comments, so it is posted below:
I can’t admit that your right because you’re not.
4.6% is not “approximately the same” as 2.58%.
Please re-read my 4:54pm and “seek to understand.”
Then watch how the actual MCCD debt service levy decreases.
Whack I think you are missing the point…
but you are not alone…
this stuff is complicated…
by design..
Let’s repeat some key points from SB 3341 in the 98th General Assembly, which has passed the House and Senate and is awaiting Pat Quinn’s veto or approval.
1. It applies only to McHenry County. Not to the other counties which have conservation districts such as Boone, Macon, Vermilion. Note that many counties have forest preserve districts, not conservation districts, which while similar are a different legal entity.
2. Quoting from the bill. “…may issue and sell bonds without first obtaining the consent of the legal voters of the district.”
In other words, if this bill becomes law, the McHenry County Conservation District can increase your property taxes by issuing non-referendum bonds.
Many school districts already issue non-referendum bonds.
And library districts.
And municipalities.
In Illinois it’s somehow an accepted practice amongst many taxing districts.
It should be illegal.
It’s done not because it’s taxpayers best financial interest, but simply because it’s legal and they can do it.
The all powerful all knowing board and council members of many of these taxing districts act like Gods.
They take money from your wallet without your permission and it’s legal.
Who’s watching your wallet?
The taxing districts could go to referendum if they chose to do so, that’s also legal.
It’s illegal in some states to issue non-referendum bonds.
Looking at the debt service schedules in the Official Statements on the EMMA MSRB website for the 2005 and 2007 issues.
Seems the Conservation District knew or should have known when they issued the bonds they would have to refund / refinance the bonds down the road because the payment schedule shows increasing payments over time, unlike a typical mortgage payment schedule in which the mortgage amount is fixed for the term of the loan.
That technique is not uncommon amongst other taxing districts in Illinois including school districts.
The 6 digit CUSIP for the McHenry County Conservation District is 580818.
Year – Approx Principal Amt of Issue
1990 – $1.6M (new issue, no refunding / refinancing).
1995 – $0.835M (nothing new, all refunding / refinancing).
1998 – $20M (new issue, no refunding / refinancing).
2001 – #80M ($68M new, $12M refunding / refinancing).
2005 – $60M (nothing new, all refunding / refinancing).
2007 – $73M (new issue, no refunding / refinancing).
2014 – $108M (no new issue, all refunding / refinancing).
A Northwest Herald article mentioned PMA Financial Advisors is involved.
They are one of the major players in the Chicagoland are to advise taxing districts on financing and bond deals.
PMA almost certainly gave a Powerpoint presentation to the Board members.
And if they didn’t, they should have.
An electronic copy of the Powerpoint and any handouts can be requested via a FOIA.
Could not locate it on the MCCD website.
It should be on the website.
Lousy transparency.
Here are the elected McHenry County Conservation District Trustee members.
David Brandt, President (Wonder Lake).
Kent Krautstrunk, Vice President (Crystal Lake).
Bona Heinsoh, Treasurer (Harvard).
Brandon Thomas, Secretary (Huntley).
Stephen Barrett, Trustee (Trout Valley).
Peter Merkel, Trustee (McHenry).
David Kranz, Trustee (Woodstock).
This next person is not a trustee but a liason between the McHenry County Conservation District and the McHenry County Board.
Carolyn Schofield, County Board Liaison, McHenry County, IL
The next person is the executive hired by the Board of Directors to run the McHenry County Conservation District.
She has a Masters of Business Administration (MBA) college degree, yet the McHenry County Conservation District website lacks some basic financial documents, such as bond Official Statements, PMA Financial Advisor presentations and handouts to the Trustees about bonds, etc.
Elizabeth S. Kessler, MBA, CPRP, Executive Director.
Since SB 3341 in the 98th General Assembly has passed the Senate and House, property tax payers have few options available.
1. Ask Governor Pat Quinn to veto the bill which applies only to McHenry County Conservation District. Since when is legislation applying to one conservation district only good legislation? Since when is making non-referendum bonds legal good legislation?
2. Ask your elected McHenry County Conservation District Trustee the same questions, and ask them to explain their decision to promote the agenda which resulted in the bill.
3. Do not vote the Trustee in the next election.
Is this what is happening?
1. Cash -out refi of old debt put $12 million new in play.
2. Because money from debt issuance is somewhat restricted, the $12 million will stay in the debt service fund.
3. Tax levy will increase again this year as in all past years, and tax money which would have been needed to pay debt service ( but now is “freed up” due to the cash-out refi) is now free to be spent on whatever Administration decides.
( Administration has already decided not to decrease tax levy. Administration has decided 2015 budget. Despite cries of poverty, new land acquisitions are made every year. Administration has asserted having made budget cuts, but Administration cost expenditures as budget line item have risen 19% since 2010.)
Non referendum bonds will continue to occur in many county and local taxing districts all over Illinois until taxpayers start screaming bloody murder.
The financial pressures are mounting on these taxing districts for a wide variety of reasons.
Each taxing district is unique.
Here are some general problems.
1. Federal sources of revenue are drying up, as Federal debt and unfunded liabilities are high.
2. State sources of revenue are drying up, as State debt and unfunded liabilities is high, not to mention
the state can’t even pay it’s bills on time.
3. Local sources of revenue are drying up, as local debt and unfunded liabilities is high, and property taxpayers are wary of any tax hike referendum.
One solution?
Take property taxpayer money without a referendum by issuing non-referendum bonds.
There are three broad categories of county and local debt and liabilities which need much more transparency.
Bond debt.
Unfunded pension liabilities.
Unfunded healthcare liabilities.
You will be hearing more about these taxpayer financial obligations at all levels of government.
They will be competing for your taxpayer dollars.
An unfunded liability is money the government should have in their investment accounts right now, but does not.
The taxpayer is liable for the liability.
The typical taxing district excuse is we don’t need 100% of the money in the investment accounts, because we don’t have to pay 100% of the money this year.
Here’s the problem with that logic.
What happens when you fund your investment account less than whatever it is you deem necessary?
Your returns will obviously be less, everything else being equal.
But in the case of government unfunded liabilities, no problem, just increase taxes to make up the difference.
Or reduce expenses in another area of government to make up the difference.
The other lame excuse you often hear about unfunded liabilities is these benefits were promised workers.
What they don’t tell you is these benefits were increased through state legislation.
So the pension and retiree benefits for all these career government workers were hiked over the years.
The benefit levels in place at the start of their career, are less than the benefit levels in place at the end of the career.
And the other pension problem is the pay hikes were in many cases overly generous.
If you hike pay, you hike the pension.
Once again, every taxing district has its own unique set of financial circumstances.
One of the worst aspects?
Most taxpayers don’t have enough money in their retirement accounts.
And those taxpayers whom do not receive one of the generous state and local pensions, chances are, their retirement plan is less generous than the state and local pension.
So here we have a majority of taxpayers whose retirement plans are less generous, funding a minority of taxpayers whose retirements are more generous.
We could write a book about the fiasco and in fact Bill Zettler did just that.
This debacle has been building the last 44 years since one sentence was added to the Illinois State Constitution at the 1970 Constitutional Convention, in the very same year Michael Madigan was first elected as a State Representative.
1. Nearly a million dollars was paid to the financial facilitators of the transaction. This was paid immediately.
Interest payments ‘saved ‘ by taxpayers would have accrued over a number of years in the future.
Therefore none of the risk of collapsing value of collateral was borne by financial debt service advisors, all risk was transferred to taxpayers/debt guarantors.
2. Collateral value of McHenry County real estate is inversely proportional to the amount of debt and debt service by which the property is encumbered. McHenry County real estate is encumbered by debt in excess of 12.3% of assessed value.
3. McHenry County real estate is further encumbered by unquantified debt as guarantor of future pension and medical benefit obligations of public employees. McHenry County residents cannot legally escape ( or renegotiate) this debt through bankruptcy as Detroit has done.
4. Cash-out refinancing by taxing bodies results in taxpayer-guaranteed debt never paid down.
Here are some details in the Official Statement of the latest bond issue by the McHenry County Conservation District.
$108,215,000
McHenry County Conservation District
McHenry County, Illinois
General Obligation Refunding Bonds, Series 2014
Underwriter: BMO Capital Markets
Financial Advisor: PMA Securities
Proceeds of the Bonds will be used to (i) currently refund a portion of the District’s outstanding General Obligation Refunding Bonds, Series 2005A, (ii) advance refund the District’s outstanding General Obligation Bonds, Series 2007, and (iii) pay certain costs associated with the issuance of the Bonds.
Maturity – Amount – Rate % – Yield % – CUSIP
2015 – $02,235,000 – 3.00% – 0.17% – FU1
2016 – $04,880,000 – 3.00% – 0.33% – FV9
2017 – $05,000,000 – 4.00% – 0.60% – FW7
2018 – $05,030,000 – 5.00% – 0.87% – FX5
2019 – $07,285,000 – 5.00% – 1.20% – FY3
2020 – $07,800,000 – 5.00% – 1.52% – FZ0
2021 – $08,475,000 – 5.00% – 1.82% – GA4
2022 – $09,195,000 – 5.00% – 2.12% – GB2
2023 – $09,955,000 – 5.00% – 2.35% – GC0
2024 – $10,760,000 – 5.00% – 2.51% – GD8
2025 – $11,615,000 – 5.00% – 2.66% – GE6
2026 – $12,515,000 – 5.00% – 2.80% – GF3
2027 – $13,470,000 – 5.00% – 2.90% – GG1
Still looking at the Official Statement.
Would have been nice for this person to explain the 2014 $108M Bond refunding deal, and SB 3341 (98th General Assembly) legislation to allow MCCD to issue non-referendum bonds, to the taxpayer in nice user friendly easy to read documents.
Director of Administration & Finance: Andy Dylak.
Who, other than the underwriter and financial advisor, is making money off this deal?
Paying Agent/Bond Registrar/Escrow Agent: The Bank of New York Mellon Trust Company, N.A.
Bond Counsel and Underwriter’s Counsel: Chapman and Cutler, LLP.
Independent Auditor: Sikich, LLP.
Verification Agent: Dunbar, Breitweiser & Company, LLP
SOURCES AND USES
The sources and uses of funds with respect to the Bonds are estimated as follows:
Sources of Funds
Par Amount of the Bonds…. $ 108,215,000.00
Original Issue Premium…….. 18,282,692.35
Total Sources …………. $ 126,497,692.35
Uses of Funds
Deposit into the Escrow Account …. $ 125,582,578.47
Costs of Issuance(1)…………………. 915,113.88
Total Uses ……………………. $ 126,497,692.35
(1) Includes Underwriter’s discount, Bond and Underwriter’s Counsel fee, General Counsel fee, Financial Advisor fee, Bond Registrar’s fee and other costs of issuance.
Lots more in the Official Statement.
Learn all about what you are indebted to pay via property taxes.
Whackamole, this whole discussion is about numbers. So I tell you what we’ll do.
I’ll get coupon and maturity information on all the bonds that are being refunded.
That’s not in the Official Statement for the bond issue, although there is enough information in the District’s audit to get pretty close.
But I’ll get the exact data.
And then I’ll compute debt service on the old bonds — the ones that are being refunded — and on the new bonds, and we’ll compare them side by side.
I’ll ask Cal to run the table.
If the numbers are just about the same, I’m right.
If the numbers will be much lower because of the refunding, you’re right and I’ll admit it.
That only leaves one other point: what is the District going to do with all the extra money it collected when it sold the refunding bonds?
I’ll bet a steak dinner at the Village Squire that the District plans to spend the premium they got for selling the new bonds way above 100 cents on the dollar – an estimated $12 million – on capital projects, essentially doing an end-run around the voters by issuing new bonds, without a referendum, that provided them with more money to spend.
If I’m wrong, you buy.
If I’m right, I buy.
Deal?
And, if I’m right, it will also provide strong evidence that the new bill Tryon and Althoff promoted WILL result in more non-referendum debt being issued by the District.
Why else would they want this bill passed?
Answer: because they spent all their money buying land and now don’t have enough to put up all the buildings they want.
If so, this amounts to very bad planning.
And if indeed they use the new law to sell more bonds without going to the voters, who have been very good to the District in the past, it will show their contempt for the taxpayers.
Are we agreed?
They have steak at the Village Squire?
Dear Cindy:
Oh, yes.
My wife and I ate there last Friday and I had the prime rib.
It was wonderful.
Here are the Minutes from the McHenry County Conservation District Board of Trustees meeting which authorized the alleged tax hike disguised as refunding bonds to save $12 Million.
If the Conservation District really wanted to save taxpayers $12 Million, then taxes would decrease
by $12 Million.
As opposed to the Conservation District spending the $12 million on uses other than paying $12 million interest to bondholders.
And here we have yet another taxing district, just like Crystal Lake – Cary – Fox River Grove High School District 155, that does not video and audio tape its board meetings and archive them on the website for public viewing.
MINUTES OF NOVEMBER 5, 2014
1.0 CALL TO ORDER
The Special Call Meeting of the Board of Trustees of the McHenry County Conservation District was called to order at 8:33 a.m. by President Brandt on the morning of Wednesday, November 5, 2014, at the Brookdale Administrative Offices, 18410 US Highway 14, Woodstock, Illinois 60098.
(So now you know where to go for a McHenry County Conservation District Board of Trustees meeting. This meeting was likely pretty much a formality to finalize the deal, any meaningful debate would have presumably occurred at earlier trustee meetings).
2.0 ROLL CALL
2.1 Roll Call
Trustees Present: David Brandt, President
Kent Krautstrunk, Vice President (arrived at 8:40 a.m.)
Bona Heinsohn, Treasurer
Brandon Thomas, Secretary (present via Speaker Phone)
Stephen Barrett, Trustee
Peter Merkel, Trustee
Trustee Absent: David Kranz, Trustee
(The above trustees are appointed by the McHenry County Board. They are not elected).
Counsel & Staff Present: Elizabeth S. Kessler, Executive Director
Others Present:
John Kremer, Director of Operations & Public Safety
Andy Dylak, Director of Administration & Finance
Anne Basten, Executive Assistant
Wendy Kummerer, Communications Manager
Robert Lewis, PMA Securities
Emily Coleman, Northwest Herald
2.2 Remote Participation
A motion was made by Trustee Barrett, seconded by Treasurer Heinsohn, to allow Secretary Thomas to participate remotely in the Special Call Meeting of the Board of Trustees through electronic participation in accordance with the Open Meetings Act and per Administrative Policy #200.03.02.
A voice vote resulted in all ayes.
Motion passed unanimously.
2.3 Appointment of Acting Secretary
A motion was made by Treasurer Heinsohn, seconded by Trustee Merkel, to appoint Trustee Barrett as Acting Secretary to execute documents due to Secretary Thomas participating remotely in the Special Call Meeting of the Board of Trustees.
A roll call vote gave the following results: Barrett – yes, Merkel – yes, Heinsohn – yes, Thomas – yes, Brandt – yes.
Motion passed unanimously.
3.0 PLEDGE OF ALLEGIANCE
The Pledge of Allegiance was led by President Brandt.
4.0 PUBLIC COMMENTS
There were no public comments this morning.
5.0 BOARD BUSINESS-CONSIDERATION TO REFUND SERIES 2005A & 2007 GENERAL OBLIGATION BONDS
Robert Lewis of PMA Securities of Naperville, IL presented his analysis of the outstanding bonds of the District.
He stressed that past performance is not an indicator of future results.
He then explained the breakeven point where future value of the bonds would equal the refunding value of today and that right now there is a lot of room for the rates to go up based on documented resources including the September 27, 2014 consensus of the Federal Reserve Board and its “Summary of Economic Projections”.
He continued to explain the Refunding Efficiency Model used as the basis for his recommendation of advance refunding and why now is an optimal time to refund the Series 2005A and Series 2007 Bonds due to their maturity dates and where they fall on the model.
He presented two scenarios: 1 -Level Savings and 2-Level Debt Service after Levy Year 2014.
The total savings is in the range of $12,000,000.
(WHERE’S THE PRESENTATION!)
5.1 Acceptance of Engagement Letter for Bond & Disclosure Counsel – Chapman & Cutler, LLP
A motion was made by Vice President Krautstrunk, seconded by Acting Secretary Barrett, to accept the terms of the engagement letter of Attorney Lynda K. Given of Chapman and Cutler, LLP to serve as the District’s bond and disclosure counsel for the General Obligation Refunding Bonds, Series 2014 (Series 2005A and Series 2007) as presented.
A roll call vote gave the following results: Thomas-yes, Heinsohn-yes, Krautstrunk-yes, Barrett-yes, Merkel-yes, Brandt-yes.
Motion passed unanimously.
5.2 Acceptance of Engagement Letter of Financial Advisor – PMA Securities, Inc.
A motion was made by Treasurer Heinsohn, seconded by Vice President Krautstrunk, to accept the terms of the engagement letter of Robert Lewis, Senior Vice President! Managing Director Public Finance of PMA Securities, Inc. of Naperville, IL to serve as the District’s financial advisor for the General Obligation Refunding Bonds, Series 2014 (series 2005A and Series 2007) as presented.
A roll call vote gave the following results: Barrett – yes, Heinsohn – yes, Thomas – yes, Merkel – yes, Krautstrunk – yes,
Brandt-yes.
Motion passed unanimously.
5.3 Acceptance of Engagement Letter of Underwriter – BMO Capital Markets, GKST, Inc.
A motion was made by Acting Secretary Barrett, seconded by Trustee Merkel, to accept the terms of the engagement letter of James Rachlin, Managing Director, Public Infrastructure Banking of BMO Capital Markets of Chicago, IL to serve as the District ‘s underwriter for the General Obligation Refunding Bonds, Series 2014 (Series 2005A and Series 2007) as presented.
A roll call vote gave the following results: Thomas – yes, Merkel – yes, Barrett – yes, Krautstrunk – yes, Heinsohn – yes, Brandt – yes.
Motion passed unanimously.
5.4 Ordinance No. 14-890 Providing for the Issue of Not to Exceed $130,000,000
General Obligation Refunding Bonds, Series 2014
A motion was made by Treasurer Heinsohn, seconded by Vice President Krautstrunk, to pass Ordinance No. 14-890 providing for the issue of not to exceed $130,000,000 General Obligation Refunding Bonds, Series 2014 of the McHenry County Conservation District, McHenry County, Illinois, and for the levy of a direct annual tax sufficient to pay the principal and interest on said bonds.
A roll call vote gave the following results: Merkel – yes, Krautstrunk – yes, Barrett – yes, Heinsohn – yes, Thomas – yes, Brandt – yes.
Motion passed unanimously.
5.5 Ordinance No. 14-891 Authorizing and Directing the Execution of an Escrow
Agreement in Connection with the Issue of General Obligation Refunding Bonds, Series 2014
A motion was made by Vice President Krautstrunk, seconded by Trustee Barrett, to pass Ordinance No. 14-891 authorizing and directing the execution of an escrow agreement in connection with the issue of General ObUgation Refunding Bonds, Series 2014, of the McHenry County Conservation District, McHenry County, Illinois.
A roll call vote gave the following results: Heinsohn – yes, Krautstrunk – yes, Merkel – yes, Thomas – yes, Barrett – yes, Brandt – yes.
Motion passed unanimously.
6.0 ADJOURN
There being no further business to come before the Board, a motion was made by Acting Secretary Barrett, seconded by Vice President Krautstrunk, that the meeting be adjourned.
Motion passed unanimously.
Meeting adjourned at 9:03 a.m . November 5, 2014
So Cal, one might call it a voodoo tax hike?
I think that a tax hike happens when taxes are actually increased.
I still think you deliberately mis characterized this bill as a tax hike when it clearly isn’t.
If taxes would decrease, but action by governmental officials allows them to stay at the same level, I’d call it a tax hike.
You are welcome to your interpretation, but more money will come out of your checking account to pay for the newly issued bonds than would otherwise have been the case.
Whackamole, I would call it a “foregone conclusion” tax hike.
If MCCD has the authority to issue non-referendum debt, then there is about one chance in 100 that they won’t.
And when they do, it will because of this law, and it WILL increase property taxes over what they would have been otherwise.
If you disagree with my contentions, please explain the exact error in my reasoning or facts.
Steve, you’re forgetting about the recent refinance. Because of current low rates, the levy for the interest payment on the outstanding bonds will decrease, thereby actually cutting the amount the taxpayers are taxed for MCCD bonds.
But, as you found out in your research yesterday, the principle remains the same.
The total bonded indebtedness the District can have is capped and the District is currently at that cap.
You’re right that taxes will go up if and when bonds are issued, but that can’t happen until there is “cap room.”
You, Cal and I will fight the issuance of any bonds by MCCD that aren’t for a good reason, but that eventuality is a ways off.
Whackamole, you are incorrect.
The new refunding bonds have the same interest rate — 5.00% — as the old bonds.
Debt service will NOT decrease as a result of the refunding.
The District sold the bonds at a high premium and kept that money — they didn’t pass the savings on to the taxpayers.
Your argument amounts to “give them the chance”, which really means “give them the opportunity to do an end run around the voters”, an opportunity experience shows they will take advantage of.
The purpose of systemic limits is to prevent that type of behavior.
“You, Cal and I will fight the issuance of any bonds by MCCD that aren’t for a good reason, but that eventuality is a ways off.”
It’s only as far off as the time it takes to pay down the current borrowing.
And when that day does come, you’ll have one less arrow in your quiver, and it’s the biggest arrow you can have: voter consent.
With the state swimming in debt, this is precisely the wrong time to give government at any level an easier path to borrowing.
Instead of conforming MCCD to the rest of the state by allowing non-referendum borrowing, perhaps the state could take a lesson and enact legislation requiring that more local borrowing be put to the voters for approval.
Steve,in addition to reading Cal, you might want to read the Northwest Herald.
They actually cover MCCD.
On November 5th Emily Coleman wrote a story with the headline, “McHenry County Conservation District to save $12M by Refinancing Debt.”
I’d send you the link, but it’s behind a pay wall.
Are you saying that you’re right and they’re wrong?
Yea ‘mole’, I believe Steve Wilson, whom I also believe to be a Muni Bond Analyst.
Your Northwest Herald “Emily”, has also written some good cooking and travel articles, as well as her stabs at Public Finance.
Non-referendum bond debt issued for new projects should be illegal.
Voter should approve all new bond debt.
Remember this drama during the next tax hike referendum.
During the referendum, the taxing district states the bonds for the referendum will be paid of in x # of years (20 yearsr, 15 years, 10, years, whatever the term of the bonds).
But at the end of the term, it’s not uncommon, just as in this scenario, for the taxing district to issue more bonds, in the form of non-referendum bonds, instead of letting taxes decrease.
Or, the taxing districts are sometimes nice and actually ask for voter permission via a referendum.
Too many of these taxing districts are revenue machines.
And the machine has lots of tools and tricks at its disposal.
It’s all legal.
But in the case of non-referendum bonds issued for new projects, it shouldn’t be legal.
First the Conservation District borrows money to buy farmland, decreasing agriculture related tax revenue.
Well in some circumstances the conservation districts rents out the farmland.
But the farmer that resided on the purchased property rarely gets to stay.
But the bonds used to purchase the farmland is rarely enough to do whatever “improvements” to the land that the conservation district desires.
So then more bonds have to be issued to improve the land with paths, wildlife restoration, etc.
Now some of that is desirable to many folks.
But what is rare if not unheard of is for a conservation district or forest preserve to tell you upfront when they purchase the land, how much it will then cost them to improve the land.
See Cal’s latest post on this.
Have a feeling we will soon see what constitutes “a ways off”.
Yes, Whackamole, I’m saying the Herald is wrong.
They print the press release, they don’t do deep financial analysis.
I, on the other hand, wrote the original program to optimize the structure of the escrow accounts used in refunding bonds when I was an head of research at First Chicago.
The math, though, is simple: the new bonds have 5.00% coupons and the same amounts maturing each year as the old bonds, which have 5.00% coupons, plus or minus a tiny bit.
The District collected $12MM net but didn’t cut the property tax rate for debt service.
Steve, net cost of the bonds to the taxpayer is the 2.58%, not the coupon rate.
The coupon rate is set higher because the bond market wants the cash flow payments.
It is my understanding this is how the vast majority of all bonds are issued, and it is in fact how the District’s 2007 bonds were issued. (The coupon rates of the 2007s were almost all 5% and yields were 4.5%)
The net yield/cost of the 2007 bonds was about 4.6% vs the 2.58% cost of the new bonds.
The District issued $108,215,000 in bonds and retired $116.4 million in debt.
This was done from the premium generated, which as you know is the amount the bond buyer paid over par to bring the coupon rate down to the effective rate/yield.
The net present value savings of the refunding is $12,133,604.
This is a hard number as the refunding is complete and is not subject to interpretation.
Additionally, the actual amount levied will be reduced by $14.3 million dollars over the life of the bonds.
D.J., you may be familiar with Emily’s work for Sauk Valley media on the Rita Crundwell case.
Ms Crundwell was the former Dixon Comptroller and Treasurer who is now serving a 19 1/2 year sentence for embezzlement. Here’s the Wikipedia:
http://en.m.wikipedia.org/wiki/Rita_Crundwell
Emily is a professional journalist and ethical about checking facts before publishing.
Wackamole, you keep shifting ground.
The District sold new bonds for approximately the same coupon rate as the old bonds, and for the same amounts in each maturity.
Those are the two factors that determine the money to be raised each year in property taxes.
So since they are essentially identical, there will be NO SAVINGS to the taxpayers.
Property taxes will NOT go down.
Now, you are correct, the bonds were sold at yields lower than the coupon, so the District collected way more money than they needed, about $12 million by their claim.
But that is NOT a savings to the TAXPAYERS.
It is just more money the District will.
They could have sold the bonds at lower coupons, reduced the premium by $12 million, and passed the savings along to the taxpayers.
They chose not to.
The purpose of this exercise is not to defend a position regardless of whether it is right or not, but to find the truth.
So if you think I’m wrong, then show me where the TAXPAYERS will save money.
If you can’t then please admit I’m right on this point.
Then we can move on.