Kane Co. (ECWd) -
During a recent U46 Finance meeting one of the board members asked the accounting firm if the Bond Debt numbers in the financials included interest. The answer was NO, as is the answer with all public bodies because of reporting requirements. In some cases, reporting the interest would put them beyond their legal debt limit. Comparing the Index reported debt to the actual principal and interest listed below should raise questions regarding reporting requirement.
Interesting is the fact public bodies are paying the interest, but don't consider it in their reporting. I'm sure most people with credit cards don't count their interest either in their financial planning........NOT!
It has become very clear that the bonding companies are making a killing in the State of Illinois on Bond sales, which many end up with principal-only payments for the first 10-15 years. We all know what happens when you only pay the minimum on your credit card and most would agree doing so is simply stupid.
You can see by reviewing U46 financial information that they too are taking this ever so popular interest-only payments on several of their bonds. See page 11, 12, and 14 of the bond documents and note how many years there is ZERO payment towards Principal.
Page 4 you can see that the Interest payment is almost double the principal payment in the 2020 payment schedule.
- 2020 - Principal payment - $7,678,007.00
- 2020 -Interest Payment- $12,036,993.00
Or page 5 you can see that three years of Principal and Interest should send a huge red flag to everyone when they see there tax bill go up again. It is no wonder with numbers like this.
2021, 2022,and 2023 Principal and Interest Bond Payment totals.
- 3 year Principal payment - $30,683,179.00
- 3 year Interest Payment- $52,096,822.00
With the battle cry "it's for the kids" we see more schools taking on more debt with little to no long term plan on paying it off, other than getting another bond from Peter to pay Paul.
U46 has paid $111,847,462.00 Million in Bond Interest since 2009. What should be of interest is the fact that these interest payments since 2012 are not getting smaller, but in fact are growing. (Click here for the Interest Schedule)
The question for U46 District citizens is how many more tax increases are you going to tolerate before demanding these spending habits, from personal purchases to face feeding, are stopped.