How Much Will a New Jefferson Really Cost?

Current (10/21/2018) Cost Estimate:

Jeff cost4

(Our original prediction, prior to the last FOIA response was 23.6M)

 

Backup Documentation:

Cost estimates from the 8/15/2018 board agenda

As attached to the 8/15/2018 board agenda Action Item after the closed session.  On page 3  we found what the district anticipated had they gone ahead without the referendum.

New ELC_Program Summary 20180809

Jeff cost bkup

The districts’ FAQ for the referendum is advertising “$15 million in the latest construction bids.”

new Jefferson size cost

Architectural & Engineering (sum 3 lines)
994,949 + 66,920 + 368,164 = 1,430,033
957,719 + 17,248 + 368,175 = 1,343,142

Debt Service Cost

in the 8/15/2018 board packet, (item 2 in Action Items after the closed session) lease_certificate_resolution  pdf page 5.

The Certificates shall become due and payable serially or be subject to mandatory redemption (subject to option of prior redemption as hereinafter described) on the dates of each of the years (not later than 2038), in the amounts (not exceeding $1,200,000 per year) and bearing interest at the rates per annum (not exceeding 5.00%) as set forth in the Certificate Notification. 

The $1,200,000 is for principle + Interest.  Verbally they were talking $1M/year.

Borrowing $14M and paying back $1M/year for 20 years is a total payment of $20M or $6M in interest.

If it is $1.2M/year for 20 years that is $24M or $10M in interest.

Based on what bonds have been selling for, 4% interest and $1M/year is more likely.

 

Debt Service – Update (10/19/2018) 

On October 11 at 10:42 AM, I submitted the following FOIA:
Please provide the total cost estimate for the new Jefferson building if approved.  This should include, but not limited to:
  • design costs (how much has been already paid + estimate for remaining work)
  • construction costs
  • debt services or “lease interest”
  • “owner’s cost”  to include removal of old Jefferson, landscaping, furnishing the new building and storm water retention.

On October 19 at 9:04 AM, I received a response

Your request is granted.  Please see information below:

  • design costs (how much has been already paid + estimate for remaining work)  $813,138.26 paid to date

  • construction costs  see attached document (document can also be found on district website)

  • debt services or “lease interest” estimate of debt service schedule attached

  • “owner’s cost”  to include removal of old Jefferson, landscaping, furnishing the new building and storm water retention. see attached document (document can also be found on district website)

One of the attachments is the one I had found in the 8/15/2018 board packet.  The other is a Debt Service Schedule, dated  September 12, 2018 (after placing the referendum on the ballot).  It shows borrowing $13,675,000, a coupon rate of 4%, total interest of $6,231,936.11 and “Total P+I” of $19,906,936.11

20yr Lease Certs CM Est Debt Service Schedule.shaw.10.19.2018.2

The difference between $14M and the $13,675,000 being borrowed is $325,000 which is most likely the cost of issuing the lease certificates.  Our original guess for interest was $6M.  We updated it to $6.5M based on this document ($6,231,936.11 + $325,000).

Updated 10/23/2018

Since i have not confirmed the $325,000 as being a cost… I decided to not include it.  Note: the cost is a close estimate based on district data.  Actual cost will be determined when/if certificates are actually sold.

Originally posted 10/18/2018, updated 10/19/2018 & 10/23/2018

16 thoughts on “How Much Will a New Jefferson Really Cost?

  1. There will be NO TAX INCREASE for the new Jefferson. The district had this built into their budget.

    When we all bought our homes we bought for a purchase price. Depending on the loan term there is always interest and when we sign the contract we see what we will have paid in compounded interest when the term is up. This is nothing new. Throwing out these numbers is creating fear mongering.

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    1. Fear mongering only in as much as all the communications from the board and school district suggest the total cost to be $15mm. Truth in lending laws require all lenders, including those writing mortgages, to clearly state total cost of loan over whatever period and interest rate were agreed to. So I’m pretty sure what’s going on here is what should have been done by the board since we don’t have direct access to the lender who is loaning us taxpayers the money. Funny too, this is the same shenanigans the board resorted to in the last failed referendum. Market the referendum as a $124mm ask, then we come to find out the total cost over term would be in excess of $200 mm. So much for transparency……..

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      1. Once again….more factless reporting by the Watchdog mutual admiration society. TILA is a consumer act…not a commercial lending application. 15 USC Section 41, Section 1601 et seq.

        Just because you don’t understand the law, or how commercial lending works in a lease purchase transaction doesn’t mean something nefarious is going on.

        And as I frequently ask…what is your SOLUTION to the Jefferson School issue? You and Janet don’t do solutions…just complaints.

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      2. Nefarious, perhaps not. Lacking transparency? Heck yes, without a doubt. The Board has a responsibility to this community to clearly communicate financial related matters. They answer to all of us, not just a select few that support their positions and should act as such.

        You tell me. Which is more honest, regardless of the law? Reporting that this leasing arrangement will cost $15mm? Or, that it will cost $24mm? And before you answer, if you were a D200 community member for the last referendum the Board said that they were looking to raise $124mm. But as the full picture was painted, it was closer to $205mm once all financing and other costs were factored in. But what’s $80mm among friends? Wheaton is rich, everyone can afford it, right? Let’s keep this on the lowdown.

        So tell me, who is being more honest? The Board of Education or DuPage Watchdog?

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    2. Taxes must go up or something else might be cut. Yes, it is in the budget. But, the latest forecast-5 report that I received on 10/19 and posted just minutes ago, shows a $26M deficit over the next 5 years. D200 does not have enough cash in reserves to cover that.

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  2. Eh you lose credibility with me once you start to nickle-and-dime down to $40 for sheet cakes for faculty and fellow colleagues who’ve worked for years in the district and are being honored for their service. You also lose credibility with me when the district has been very transparent when going live with videos showing secure entries being installed which is of the upmost importance. Instead, Mrs. Shaw chose to comment on if people in the video signed release forms. To call these things out makes a person less of a watch dog and more of a busy body. VOTE YES-your taxes will NOT go up! This school is an asset to our community!

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    1. Agreed, based on everything I’ve learned taxes will not go up – This year. But there are no guarantees based on the board’s Facility Master Plan (documented in a post from Ms. Shaw on this website) that our taxes could see a considerable boost based on $92mm of needs identified in the plan. I’ve not heard anything on how the board expects to pay for this which leads one to guess that a tax increase is on the near term horizon once they get past this hurdle.

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      1. No. The state has allocated the district more funds plus there’s the Amazon building that’s going up that will generate more tax money. Please call or email district 200 if you have questions!!! Your taxes are not going to go up because of this!! It’s in the budget.

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      2. I understand, our taxes are not going up this year because they’ve already secured the $1mm to pay for the first year of the lease. but had you followed my prior comment, how in the world does the School District pay for more than $92mm of school improvements identified in their Facility Master Plan? There are insufficient funds to cover this, so my question remains; if we don’t have the money in the budget to cover the next $92mm in school construction, how does the board plan to pay for them? I’m suggesting that the only way it can be done is by raising taxes or another referendum. Neither one of which many of the residents of the school district are tired of.

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      3. As Ms. Shaw’s has litigated and maintained in other posts, significant legal and electoral steps need to occur for an increase in taxes or building new infrastructure. The Board just can’t wave a hand and make it happen. Plus, I’m sure she will sue again to protect you as long as others like Ives, Heartland and other public education haters will be willing to fund the data mining and complaint drafting.

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      4. It’s in the budget… For now. This is assuming that state funding will continue at the current rate. Good luck with that.

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  3. Links to your own website as evidence….. is not evidence.

    You can sue again to protect everyone if you feel rules are being broken. No one is stopping you. I’m sure the outsiders behind you will assist you again. But this time, we’ll be here to call you out if you’re wrong, and to make sure those others are brought into the light for all to see.

    You keep alleging conspiracy and lack of transparency…based on your own review of data…which shows your complete inexperience with finance. We’re all supposed to believe that your review based on FOIA demands and your complex looking spreadsheet data is displaying a hidden truth the evil Board is hiding.

    Could it be just what you want to believe… or want others to believe …based on your political leanings and those like Ives whom you support, who want to dismantle public education and resources used?

    The fliers put out at Jefferson School recently and added to your website don’t even have an agreement as to the conspiracy costs! One flier states the true cost as $23.6 M. One states it as $39.5 M! Both of those numbers are different than your assessment in other posts!

    Look…..the finance model being used is not for the inexperienced person to claim foul just because they don’t understand it. And it’s easy to claim foul to meet your political goals. Many people can’t even read a P&L, so it’s easy to twist..especially these days.

    Do you know the model being used for infrastructure and operations, as demonstrated by the table of data/FOIA info you provided? I do. If you can’t identify it, you have no business tearing it down and claiming deficit spend. The farther forecasts go out, the less certain they become due to unexpected and possible events, but the model and data is sound and does NOT show what you claim it shows as to a negative reserve or deficit spend.

    If you want to get together with any District members who would like to discuss, I am open to do so. We can explain our respective qualifications, experience, and education, and our views on the data….and let the people decide. I have routinely offered to do so.

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  4. I think I would rather see source-cited factual data–costs, effectiveness of programs, interest rate cost projections, to name a few– such as Ms. Shaw has posted,
    and then decide as a people…
    than listen to people spouting their qualifications+opinions but no actual factual data
    and then decide as a people.

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    1. Susan, as noted many times…you don’t live here, you don’t pay taxes here, your kids are not in schools here, etc….

      You don’t have a voice in this matter…But…

      Janet Shaw’s conclusions are not facts. She misapplies FOIA data, and puts together what appear to be compelling arguments to those unknowledgeable of finance and how to properly prepare and read a P&L. She does so more to meet the political agenda she supports, not to address a real issue of how to resolve the Jefferson School issue.

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  5. I disagree.
    The numbers are source-cited and agree with similar numbers in our District 200.

    You should be able to put together a source-cited P&L to support your own assertions.
    That would put the matter to rest, no?

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