District 86 approves bond sale

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Updated: March 11, 2012 8:08AM

The Hinsdale High School District 86 Board authorized the issuance of nearly $18 million in bonds Monday to pay for air conditioning at both Hinsdale Central and South high schools.

After a lengthy debate over the attorney’s preparation of the resolution and the actual cost of the bonds to taxpayers, the board approved the measure 5-1. Board member Dianne Barrett abstained, while board member Richard Skoda voted no.

Barrett had issues with finance attorneys Chapman and Cutler, who worked with George K. Baum & Co., and authored the resolution.

“It’s like going to a real estate table with a buyer for your home,” Barrett said. “The seller and buyer need their own lawyer. (Chapman and Cutler is) representing both sides and that’s problematic.”

Barrett also had issue with the resolution stating the $17.96 million in bonds would “increase the working cash fund of the district.” Barrett wanted the projects the money is to be spent on to be listed in the resolution. She also questioned the fund into which the money is to be deposited.

William Hofherr of George K. Baum & Co. defended his company and the attorneys’ handling of the bonds and wording of the resolution. “Everyone wants to make sure what is presented to investors is accurate,” Hofherr said. “These are Triple A bonds.

“(Investors) understand, from their perspective, these are completely legal. (Chapman and Cutler attorneys) do more bond council work than any other bond council firm in the nation. The last thing anyone wants is the document to be inaccurate in any respect.”

Hofherr originally estimated that when the bonds would be taken to market, the interest rate would be about 3.49 percent, but it came in at 3.17 percent.

“We went into the market (Monday) and the bonds were very well received,” Hofherr said. “As far as structure, we stayed pretty much with what we were doing. But since rates were so much better, we were able to shorten the life of them by one year, to 18 years.”

Before the meeting, Hinsdale resident John Lisy questioned Hofherr’s numbers at recent meetings and asked for an accurate cost to area homeowners.

In December, Hofherr said the bonds would increase taxes on the owner of a $900,000 home by $30 in the first year, $25 in the second year and $7 the third year. The numbers, however, included current debt. With some district debt expiring soon, Lisy felt the numbers were misleading.

“That makes me and a lot of taxpayers think it only costs $50 and we stop paying after a couple years,” Lisy said “I think it’s a little disingenuous to say there’s only three payments.”

Hofherr estimated the district to have $7.8 million in existing debt and will have a total of $32.8 million in debt over the life of the bonds. Hofherr’s staff estimated the cost of the bonds to a taxpayer of a $900,000 home to be $1,280 during the 18 years.