2 Efforts to Cut Back: City Re-Funds, Schools Dip Into Reserves

City saves $800,000, School District 304 moves $3.2 million to pay down debt. It might not be enough to satisfy some residents, but two units of local government take action Monday to reduce debt.

The city of Geneva got some good news to the tune of $800,000 Monday, when it re-funded some general obligation bonds at some very favorable interest rates.

The $800,000 savings over the life of the bonds is added to the approximately from early bond re-funding.

"It's just remarkable," said David Phillips of Speer Financial Services, which represents the city in its refinancing efforts. "It’s in large credit (due to) your AA2 rating. People are looking for secure investments, and you can’t get much stronger than that."

The city received confirmation of Moody's AA2 bond rating about we week earlier, City Administrator Mary McKittrick said after Monday's City Council meeting at City Hall, where the city voted unanimously to issue the general obligation re-funding bonds.

The various bonds were initially issued to pay for the $10 million purchase of the Prairie Green property west of Peck Road and wastewater treatment plant improvements. Voters approved the bond referendum for Prairie Green back in 1997.

While Geneva taxpayers might not to see an immediate impact on their tax bill, the savings help over time by reducing the city's debt and lowering the tax levy, McKittrick said.

Meanwhile on Monday night, the Geneva School Board agreed to dip into its reserves to pay down debt.

According to an article by Susan Sarkauskas in the Daily Herald, School District 304 voted Monday to transfer $3.2 million from its education fund to abate the debt fund levy.

By paying down the debt, a homeowner with an "average" Geneva house valued at $288,000 would see $98 reduction in his or her tax bill, the story said.

Bob McQuillan February 07, 2012 at 11:48 PM
Can't comment on the city refunding, I was at a 4:30pm special meeting of the school board. Yep, 4:30 in the afternoon, it wasn't explained why it was so early but one board member "phoned in" due to his work schedule. Hats off to the board for finally spending some of the $47 million in reserves the state says they are sitting on. Strange though, their own outside financial planning consultant (that taxpayers pay for) recommended they spend $11 million out of reserves. Why did they ignore the recommendation from PMA and go with $3.2 million? The Patch article is misleading in that the $98 reduction in your tax bill is hocus- pocus. The "Average Joe" will see their taxes increase $279 over last year. Based on the levy approved in December 2011, the increase would have been @$400.00. Now you know what I mean - they are using reserves, which are actually our overpayments of property taxes for the last several years, to provide you "Mr. Average Joe" a tax reduction of $98.00 on a tax increase of @$400.00. Oh, thank you kind board, may I have another? The @$400 original tax increase/reduction to $279.00 is due to repayment of ....... you guessed it, OUR $325.6 million dollar debt. The administration provide the following yearly debt repayment schedule all in millions of dollars: 14.7, 16.8, 17.7, 19.4, 21.0, 22.0, 24.5, 24.9, 19.3, 19.3, 21.8, 19.2, 19.2 & 19.2. We currently pay @ 14.3 million a year. www.GenevaTaxFACTS.org for the real story, no hocus-pocus there.
Lou B. February 08, 2012 at 02:16 AM
The author (Mr. Nagel) of this story either does not understand the taxation issues facing the residents of Geneva, is an inarticulate writer, or purposefully spins the story to provide cover for the mistakes and excesses of Geneva 304 school board. Geneva TaxFACTS has made an effort to inform some Patch writers on these matters, but they still keep missing the point (and never attend board meetings). In your next tax bill you will see a sizable tax INCREASE due to school district bonds, not a reduction. The only reduction is a "reduction of the increase" and that is because the school district 304 has 40+ million in reserve from prior years overtaxation. Current school board members and District 304 administration tax Geneva citizens to the maximum allowable by law every year, even in the face of dire economic times, and declining enrollment. We're lucky to have informed citizens such as Mr. McQuillan and TaxFACTS to shine a light on how Geneva taxing bodies operate. Sorry, but at the current time, I can't recommend the Geneva Patch as a source of reliable information on the same matters.
Lou B. February 08, 2012 at 02:50 AM
"two units of local government take action Monday to reduce debt" On additional comment if I can. The school board took NO action to "reduce debt."
Rick Anderson February 08, 2012 at 05:26 PM
So the extra $400 I am supposed to come up with to pay property taxes is going to be reduced by $98. Is that a just cause for a celebration?
Martina Natoma February 08, 2012 at 06:11 PM
Mr. Anderson, I believe your taxes will raise even more than that. The liability to pay off the schools bonds are not part of the School District 304 tax charges apparently, and from what I see on www.genevataxfacts.org, that tax payment will be increasing astronomically over the next 5-10 years. No wonder the school board president resigned - too bad others don't follow his lead.


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