HUNTLEY – District 158 will look to quickly execute the initial part of its $106 million debt restructuring plan, after escalating interest rates forced board members Thursday to make changes.
In a special meeting, board members unanimously authorized the district to restructure up to $50 million in debt for the first six years of its restructuring plan, after members authorized a limit of $43 million earlier this summer.
Board members and district administrators were initially hoping that recent increases to bond interest rates would be temporary and fall back to historically low levels.
But the board made clear that the Huntley school district can’t wait on the market any longer.
“Seeing the trend and where things are going, it’s almost like the train is leaving the station, and we have to decide whether or not we hop on board,” member Michael Fleck said.
The district’s debt payments increase dramatically by the new year. It would likely force the district to increase property taxes to pick up the tab, if the district couldn’t restructure payments.
The plan that restructures $106 million in district debt was in part meant to capitalize on low interest rates brought on by the economic recession. The plan also extends debt repayments by 10 years, ending in 2034.
Board members approved the restructuring plan earlier this year to stave off those property tax increases to cover its debt. The district’s debt repayments started to outpace its revenue after the 2008 housing market crash tempered the rapid development within the Huntley area.
Despite the uptick in interest rates, the district still will achieve lower annual debt payments than under its old structure and still take the pressure off taxpayers, said Chief Financial Officer Mark Altmayer.
Altmayer will meet with financial advisers Friday about executing the initial phase of the district’s plan. The district could officially restructure its looming repayments within the next two weeks, he said.