What is meant by a “tax shelf” that allows for a no tax rate increase bond initiative?
The taxpayers of District 502 previously approved a bond referendum in which COD was allowed to borrow $183 million dollars in U.S. Treasury bonds at a low interest rate for construction projects. We have been paying back the bonds over a certain number of years with taxpayer assistance. In the spring of 2009, COD refinanced a portion of bond debt by paying off some of the bonds early and taking out other bonds at a lower interest rate. The College was able to do this in part because of its Aaa rating provided by both Moody’s and Standards & Poor’s national bond rating agencies. This lessened the amount of interest paid back by taxpayers over the life of the bonds by $2.14 million. The College now has a limited window of time in which to receive approval for a new bond issue with no change in the tax rate. The College has not yet decided whether to pursue a referendum.
