Thanks to a favorable bond market, New Trier High School officials expect to save millions of dollars in interest costs on its Winnetka campus renovation project.
During a Jan. 13 bond sale, New Trier received 33 bids from six brokers/dealers. The normal 10-minute interval allotted for a sale was extended five times by two-minute intervals, due to the amount of interest in the bonds.
Eighteen minutes after the sale began, Citigroup was declared the winner, bidding a 2.827 percent interest rate.
“It’s just a great time to be out in the market,” said New Trier Finance Director Cheryl Witham. “We really wanted to get out in January. That was an excellent decision.”
In the summer of 2014, New Trier officials estimated a 3.7 percent interest rate for the $89 million 20-year bond issuance needed to pay for the renovation project.
Using those numbers, New Trier estimated the bond issuance would add an additional $16.67 per $1,000 in property taxes paid annually by each taxpayer in New Trier Township.
With the much lower 2.827 percent rate, however, New Trier now estimates the average homeowner will pay an additional $15.89 per $1,000 in property taxes paid annually.
“That (savings) is still estimated, but we can see significant savings,” Witham said. “Almost $11 million saved in the life of the bonds.”
David Abel of William Blair & Company presented the bond sale results to the New Trier Board of Education Jan. 20, and said several things worked in New Trier’s favor.
“The fact that you brought the full $89 million at once elevated the district to an institutional level of attention where you got a very competitive bid from Citigroup,” Abel said. “Something smaller might have not made Citigroup’s threshold, or they might have not bid quite aggressively, so that worked in your favor.”
New Trier will receive the funds from the bond sale on Feb. 3. Taxpayers in New Trier Township will see the cost of the bonds on their property tax bills in the fall of 2015.
With the lower interest rate, New Trier will pay an average annual debt service of $5,801,424 for the next 20 years.
The Winnetka campus renovation project calls for the demolition of the 1912 cafeteria, the 1931 tech arts building and the 1950 music building, with one new building replacing all three. The first building (tech arts) will be demolished this spring, and the entire project is expected to be completed in time for the 2017-18 school year.
