Item 5C. Authorization to Prepare for Issuance of 2026 General Obligation Bonds
Superintendent's Recommendation:
MOTION TO AUTHORIZE THE CHIEF FINANCIAL OFFICER TO PROCEED WITH THE PREPARATION OF AN OFFICIAL STATEMENT, SET SALE CONDITIONS, AND SOLICIT BIDS FOR THE 2026 GENERAL OBLIGATION BONDS TO FINANCE PROJECTS IN AN AMOUNT OF $7,154,000.
Background:
On December 18, 2025, the Board of Commissioners approved the 2026 Asset Management Program (AMP) totaling $19,313,209. The AMP is funded by a variety of sources including Park District bonds, cash on hand, and federal, state, and local grants. The following is a summary of the funding sources:
The primary change in funding needed is due to the reallocation of existing funds from prior bond issues to fund a portion of the projects in the 2026 AMP.
The bond issuance is estimated to generate $7,284,665 in proceeds which will fund $7,154,000 of project costs and bond issuance costs since the bonds are expected to sell at a premium (selling above face value) due to current market conditions. The Park District currently maintains a Aaa rating, the highest rating possible, from Moody's Investor Services. This rating allows the Park District to borrow at the lowest possible interest rate.
As mentioned above, in addition to the funding required amount for project costs, the bond issue also funds the cost of issuance. These expenses include, but are not limited to, fees to have the bonds rated, the work of our municipal advisor, bond counsel fees, bond registrar/paying agent fees, and the underwriter's discount (compensation to the underwriter for its role in selling bonds to investors). These fees and charges are estimated to be $75,000.
The bonds are recommended to be 15-year bonds in order to maintain an average property tax levy of $675,000 over the life of the bonds. Bonds supported by ad valorem property taxes are required by state statute to be levied at 105% of debt service; therefore, $675,000 includes the 105% levy target. The following is a summary of the proposed bonds:
The attached "Debt Service Projection Report" shows how this proposed bond issue impacts future debt service tax levies.
The Park District's limit on debt outstanding without voter approval is one-tenth of one percent of the Park District's estimated market value, or $193,432,463. Including the proposed bonds, the total outstanding bonded debt for the Park District will be $59,820,000. The amount of bonds scheduled to be retired during the next five years (including the proposed bonds) is as follows:
2027 $6,325,000
2028 $6,640,000
2029 $6,990,000
2030 $6,525,000
2031 $4,690,000
Note that amounts after 2027 will increase as bonds are sold in the future.
These maturities represent 52% of the Park District's outstanding total bonded debt. This is a high percentage and is highlighted as a positive factor each time Moody's rates our bonds.
Next Steps
If the proposed motion is approved, the Board will be presented a resolution awarding the sale of the bonds at the Board meeting on October 15, 2026. The resolution will award the bonds to the lowest bidder, set the interest rates, and require the Board to levy taxes in 2027 through 2041 to fund annual payments.
Approval of the recommended motion is the first step in the bond process. If approved, the Chief Financial Officer will begin working with the Park District's municipal advisor and bond counsel to prepare an official statement and solicit bids for the bonds. It is important for Commissioners to understand that the bond market views the issuance of an official statement and receipt of bids as a commitment by the Park District to complete the bond sale. Failure to complete the sale would adversely impact the Park District's ability to issue bonds in the future.
Relationship to the System Plan:
The Request for Action supports the following goal(s) of the System Plan:
Goal 2: Parks Matter
Goal 3: Lead by Example
by financing park improvements as part of a well-planned and managed long-term debt strategy.
Attachments:
