DIst. 300 school chief responds to city-school district sales tax issue

In a collaboration of entities, many times there is a misinterpretation or a misunderstanding of certain facts that can lead to disagreement. In regard to the city and school district there has been a long relationship of working together to benefit the city, the school district, its residents, and in our case the students. The construction of the new high school in our community is a great example of two entities working together for the benefit of many. Without the support of the community and support of the city the construction of the new high school would not have occurred.

In regard to information mentioned in the September 29th edition of the DuQuoin Evening Call there are a few items from the article I would like to address. First, the refinanced bonds of 2011 that City Attorney Rhett Barke refers to was for an issue in the amount of $3 million that was originally issued in 2007 to take care of needed infrastructure work on the west end of the high school. This work included a new roof for Anders Gymnasium, the band room, and auditorium and for waterproofing that had been a long standing problem on the west end of the school. The City did forward to the school the first year payment for these bonds but the District had to absorb the remainder of the payments for those bonds. There was a discussion about using the city sales tax for the entire work but to no avail. With the condition of the roof and other issues it was work the District had to address.

As everyone is aware from 2002 to 2009 the school district continued to lobby the state for its entitled funds for the construction of the new high school, but as we all know the state failed to fund the school construction program until 2009. During the same period of time the city requested the school district address the condition of the Ward School and Wheatley School sites which had been vacated when students moved to the new K-8 School. In a 2008 meeting with the city, the District asked that the city sales tax that was originally approved in 2002 be allowed to fund the cost of the demolition of Ward and Wheatley Schools. The city again forwarded a payment to the school district and an addendum was also made to the city sales tax agreement that would allow the District to use the sales tax for a period of 20 years to repay the costs incurred in the development and construction of the new community high school facility. In the July 2008 addendum it also stated the District would repay a sum of $585,435.88 to the City of DuQuoin from the sales tax collected during the 20 year period. This amount represents the two payments made by the City to the school district as mentioned.

When the school district started receiving funds from the state in 2009 for the new high school, the bidding process for the new facility revealed the overall costs of the original project had increased mostly due to inflation. Once the District received notification from the state and the bidding process ensued, bonds were issued in 2010 for the new school utilizing the city sales tax as revenue for these bonds. These bonds also served as a local match for the new high school and for funding the added cost above the original 2002 estimate. Since 2010 the city has received from the Illinois Department of Revenue a disbursement each month as proceeds from the ½% city sales tax and forwarded it to the District. The revenue from the city has been used to retire debt on the 2010 bond and at this time $700,000 in principal has been retired on the entire bond issue of $5,350,000. Naturally there are interest costs to the bond payments and this has been paid as well. Most long term bond issues retire less principal in the beginning and thus more interest early on. The payment Mr. Barke refers to as referenced in the article is again for the original $3 million bond from 2007 refinanced in 2011 not the 2010 bond issue that is totally dedicated to the new construction of the high school. The District chose to refinance the 2007 bonds at a lower cost in 2011 and to pay less interest and principal up front in order to not raise property taxes in a substantial manner. Again, the 2010 bonds are being paid for by the city sales tax.

In reference to the on-going issue with the District making a payment of approximately $585,000 to the city during the duration of the agreement, this is where a dispute seems to exist. The $585,000 is the amount of 2 installments the city forwarded to the District prior to the actual start of construction of the high school. In order to receive these amounts, the sales tax agreement between the city and school district was amended so the city would be paid back $585,000. The understanding of the school district is that it would be paid back at the end life of the bond issue, not while the bonds were still continuing to be paid. That is where a disagreement seems to exist.

The District's annual audits show all bond issues and all payments to be made which are done in accordance with bond language as drafted by bond counsel and in accordance with proper accounting practices as per our annual audit. The District always remains grateful for the support of our community.