I want to start out by saying that I supported the last school referendum. I also felt so strongly about the stand I took that I joined the Facilities Planning Committee (FPC). I also wish to state that the FPC is made up of a very concerned group of citizens who desire the best for the children being educated in District 428. This group has seen some lengthy discussions about enrollments, building sizes, and the future of all the district’s school buildings.

My concern is that we are making a mistake right now. The numbers that were used to promote the school referendum are completely different today then prior to the referendum on Feb. 14th. We all know that our economy has seen better days and no one can predict when we will come out of this. A recent demographic study pertaining to future enrollment numbers was completed by the same demographer that the district used for the referendum. Numbers now show fewer students in the new high school, in fact, 2012 shows 520 less students. This in turn is a result of less construction, families moving away from DeKalb, and an exodus of the Hispanic community due to fewer jobs available locally.

The referendum anticipated 600 new homes for 10 consecutive years (6,000) new homes to be built plus several already completed subdivisions also were wrongly counted for starts. For the referendum numbers to work, $20 million in new construction EAV is needed every year in order to maintain the $280.00 per year for a $200,000.00 home. This is not happening. We are currently $16 million over in anticipated interest repayment and looking to extend the number of years to pay down the bond debt. Also, the City of DeKalb experienced a windfall in that the city gets to keep the money from the referendum increase in all of their TIF District’s. The City of DeKalb is “graciously” giving the school district back 50% of which the district can spend any way they wish, not necessarily for the new schools. I strongly encourage the City Council to give back 100% earmarked for repayment of the $110 million referendum bond.

Our School Board is refusing to downsize the high school even though numbers show fewer students. We must design this school smaller with the ability to easily add on when needed. I would rather err towards a conservative approach. Has this community not learned from its past mistakes?

Ivan Krpan
FPC member

It’s campaign season in DeKalb County. Local candidates are vying for elected positions that greatly influence the quality of life in your backyard. If elected their decisions will likely impact your wallet more directly and with greater impact than all other elected officials.

The April consolidated election also includes elected offices in townships, park districts, school districts and library boards throughout DeKalb County.

Cortland voters will choose between candidates for Mayor, Town Clerk and three Trustees. A public question regarding a sales tax referendum to increase the sales tax from 6.25 to 7.25% to raise revenue without increasing property tax will be on the ballot.

Sycamore city elections include races for Mayor, City Clerk and Aldermen in wards 1-4. Alderpersons are elected, two in each of the four wards, and the aldermanic elections are held every two years, at which time half of the City Council is elected.

DeKalb residents will decide who their next Mayor and City Clerk are as well as determine the City Council members for the 2nd, 4th and 6th wards. They will also decide whether or not DeKalb will retain Home Rule. Voters in DeKalb may have lots of choices. According to DeKalb City Clerk Donna Johnson, 43 candidate packets were picked up and 15 were returned on the first day of filing. The 6th ward in DeKalb already has 5 people vying for the seat.

Genoa will elect a Mayor, 4 Aldermen (in  wards 1-4) and City Clerk. Hinckley voters select a President and 5 trustees. Kingston chooses a President and 3 trustees. Kirkland decides on President and 4 trustees. Lee elects a President and 3 trustees. Malta determines its President, Village Clerk and 3 trustees. Sandwich chooses their Mayor, City Clerk, City Treasurer and 4 aldermen. Shabbona has races for 3 trustees. Somonauk selects a President and 3 trustees. Waterman chooses their next President and 4 trustees.

DeKalb County Online will again publish a Local Candidate Survey that will ask tough questions and require blunt answers. Local candidates are encouraged to use this participative media to state their positions, clarify their stances and to set the record straight.

If you have a candidate you recommend, tell us who it is and why you support them.

As always, we will employ the latest technology we can afford. Take these examples of our new Flipster Video Camera as a sample. Watch for more videos soon.

Round One: Citizen Finance Advisory Committee Meeting Jan 15, 4:30pm

First, for some good news… interest rates for debt bonds are at a low point in a rapidly fluctuating market, according to Liz Hennessy with William Blair and Company. The first $30 million in bonds were sold in mid-April 2008 and the District was able to take advantage of low interest rates at that time. By splitting the selling of the bonds into multiple segments taxpayers were saved millions of dollars in interest.

Since April 2008 the muni market has been volatile. Interest rates climbed rapidly in mid-September 2008 but fell sharply after the first phase of the federal bail-out package. A large number of underwriters (e.g., Bear Stearns, UBS, and Lehman Brothers) have either left the market or the extent of their future participation is in question which has hampered liquidity. Tax exempt 20 year rates has seen a growing gap between relative market value over the last eighteen months.

As the economy weakens municipalities and school districts could face lower revenues. Factors that have impact on the repayment schedule are extremely volatile. New construction has slowed to a halt. The CPI has plummeted to a potential 0% increase between December of 2007 and 2008.

Hennessy did point out to “the blogger” sitting in attendance (moi) that the use of $2 million of TIF revenue the City of DeKalb owes the District per the 2003 agreement was factored in to reduce the bond size to $108 million. While being called a blogger is certainly better than “whiner and complainer,” I guess I still have to point out that the $2 million I’m talking about has not yet been paid to the District and will expire in 2010 if not used properly or unless the City extends that deadline.

Brendon Gallagher, who chairs the CFAC, urged patience in selling the next round of bonds. He thinks things might get worse before they get better. The advantage of waiting would be even lower interest rates. Those rates could instead increase but if so would be tempered by the savings in interest from selling now.

While not suggesting selling the entire balance of the bonds at this time, Misty Haji-Sheikh, wanted all options on the table. As such that would include selling the entire balance at once and other options including an issue of $30 million in September 2009 and another $50 million in July 2010 or do a $40 million/$40 million on the same dates.

Tom Teresinski poured a dose of local economic reality on that table. He pointed out the significant reduction in new construction EAV (click image for larger view). He asked for my input on the number of home foreclosures in the District. I pointed out that as of Dec. 24, 2008 there are 54 Sheriff auctions scheduled in DeKalb, Cortland and Malta before the end of this school year. I also mentioned that the news has not been rosy for local commercial property either.

Teresinski stated that with the scenarios as presented by Hennessy the financing costs have increased by $16 million.

No action was taken.

Round Two: Facilities Planning Committee, Jan 15 @ 6pm

The purpose of this meeting was to discuss a request by Superintendent Dr. Jim Briscoe to change the construction method for the high school from a General Contractor to a Construction Manager. He reported on the field observations of the contractor at the Cortland Elementary School project, which is employing a Construction Manager. Briscoe believes there are more checks and balances between the contractor and the architect when using a Construction Manager.

Mike Wood (Elliott and Wood) spoke to the committee of his experiences with General Contractors and Construction Managers. It has been his experience that on large projects where out-of-town GC’s are the only eligible bidders it has sometimes been a practice for them to use local subcontractors’ bids to get lower prices from out-of-towners. He believes taxpayers will be better served and more local contractors will have a better chance if the Construction Manager method is used.

Tony Ficarelli, chief legal counsel for the District, went over risk assessment and various contractual arrangements between the two methods. In larger projects he has seen a trend toward the Construction Manager method and the results have generally been favorable. He stressed that it really boils down to the General Contractor or the Construction Manager that is selected.

If it was decided to change to the Construction Manager method a new contract with the architects would be required. If that was to occur, I pushed for Value Engineering and Material Compensation Disclosure to be added to the contract. Both of these items were suggested by Ficarelli in earlier meetings. According to Ficarelli, a Construction Manager would have more say in material selection. That flexibility could result in substantial savings for taxpayers.

Briscoe is to get RFPs from Construction Managers for further analysis. Not all was in agreement with further exploration of changing from a GC to a CM. Ron Naylor and Ron Beldon voted against the notion. Their concerns are very valid. The District faces less liability with a GC and in theory the GC is more likely to get the sharpest pencil. A CM is selected through a Request For Proposal where a GC is selected by lowest responsibile bidder.

But Briscoe was not superintendent when the referendum passed and therefore not part of the initial discussion on the GC versus CM method. At a potential price of almost $90 million his request for a change should be given time and consideration.

Teresinski repeated his brief presentation to the FPC on the decline in new construction EAV and enrollment projections. Hopefully, FPC, CFAC and most importantly, District 428 Board of Education members paid attention. In all the scenarios put together on the financials, and all the discussions on the alternatives on the construction methods, the one variable not given serious consideration is downsizing the high school.

But unless there is a public outcry for resizing the high school to fit newer lower enrollment projections, and higher than expected debt costs, the new high school will be let out for bids sometime in February at a size and cost this community likely cannot afford.