Joliet Township High School Approves Bond Purchase
School district chooses to purchase its own bonds.
There were two main reasons the Joliet Township High School district 204 Board of Education members approved investing nearly $950,000 in their working cash fund by purchasing bonds. Called a working cash bond purchase, the move will keep the tax rate steady and they wanted to have access to the money that is available to them under the tax cap. Board members approved the move on Tuesday night.
“If they don’t issue the bonds, they will lose it,” Elizabeth Hennessy, William Blair and Company said at the meeting in November when the issue was first presented to board members.
Hennessy gave a presentation to board members at the November board meeting.
At the heart of the move is simply an accounting move. The remaining $947,000 that is part of the 2012 tax levy can only be used to pay off bonds. Since the school district did not have that amount invested, if they do not invest it, they will lose the ability to use it. However, if the board chooses to purchase bonds with that money, the $947,000 goes back into the district’s working cash fund.
“It moves from working cash to an investment fund,” Rich Pagliaro said. “It does become an accounting entry.”
Currently, the tax levy for the district is .30. By investing the $947,000, the distict will keep the rate steady for its residents, instead of seeing it drop for one year only to balloon again in the following years
Hennessy suggested that board members consider purchasing its own bond. The district would then set a going rate of interest for that bond and would essentially pay themselves.
“The money really never leaves our hands,” Pagliaro said.
The bond purchase will happen in January.
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