April 21, 2011
By Cedra Crenshaw
The Valley View school board approved an additional $83.5 Million in district debt at the 4-12-11 board meeting. But if you read any "news" reports you wouldn't know that. And if you search the district's website for detail on the $83.5 Million you won't find it because the PMA Securities presentation detailing the $83.5 Million has disappeared!
It was there shortly before the 4-12-11 board meeting, but taken down soon thereafter.
Right below the $83.5 Million Increase in Debt Service amount, is the $29 Million Net Present Value – proving the district knew the total amount of additional debt on 3-14-11, when I inquired as such. Why didn’t the board want to share the additional $83.5 Million debt with taxpayers? Did the board’s decision have anything to do with the April 5th elections?
Even if you agree with this tax shifting, and that’s all it is, didn’t taxpayers have a right to know the district was burdening them with an additional $83.5 Million in debt? Didn’t taxpayers have a right to cast a vote for such a large increase in the district debt burden? Unfortunately, the Valley View school board didn’t think so.
After I was denied a request at the 3-14-11 board meeting as to the total amount of additional debt service over the life of the bonds, my FOIA request asking the same simple question was denied as well. The simple truth is the $83.5 Million was pushed out into years 2028-2033, and taxpayers never got a chance to vote on it.
1. Series 2011A in the amount of $55,595,000 (purchased by BMO Capital Markets GKST Inc., Chicago for $54,204,504.50), and
2. Series 2011B not to exceed $55,000,000 (to be issued after board reorganization pursuant to the April 5, 2011 consolidated election results).
Because of “Section 19-20 of the School Code of the State of Illinois (the “School Code”), as amended by Public Act 96-1546, effective March 10, 2011, the District is -2- authorized to issue refunding bonds that mature within not to exceed 25 years from their date to refund (i) bonds authorized under Section 19-3 of the School Code or (ii) bonds refunding or continuing to refund bonds authorized under Section 19-3 of the School Code”, Valley View, and only Valley View, can extend debt repayment on previously authorized bonds that were to be repaid in 20 years to 25 years.
How did Valley View get such a sweet deal? To push through nongermane Senate Amendment 1, now Public Act 96-1546, Valley View hired JAR Consultingon 1-3-11. JAR Consulting helped draft Senate Amendment 1, pushing it through the General Assembly to passage in both houses by 3:41pm on 1-10-11 – just hours before the school board meeting on 1-10-11 when the JAR Consulting contract was “approved” by the board. How’s that for open government?
Who made out here? How much in fees did all of these people/entities below make as a result of the 2011A bond issue/restructuring? How much more will they make with the 2011B bond issue/restructuring?
1. Bond Agent
2. Escrow Agent
3. Credit Facility Provider
4. Credit Facility
5. Bond Counsel
6. PMA Securities [financial advisor conducts competitive sale]
7. Purchase Agent, Chapman and Cutler LLP, Chicago, Illinois, in its role as Bond Counsel
8. Verifier, Dunbar, Breitweiser & Company, LLP, Certified Public Accountants, Bloomington, Illinois
The district has spun this as tax relief, but all they’ve done is shift the tax burden from now until later. Imagine if you refinanced your mortgage and extended the repayment an additional five years. You would end up paying more, a lot more, just like VVSD taxpayers.
Instead of having an aggressive plan to pay down the debt, the district will spend more money on capital improvements and potentially teacher salary increases. And once again, taxpayers will be stuck with the bill.