Bursting the bubble theory

[204parent]

www.204thekids.org/emailblast/emailblast_Mar9.html

[Arch]

"There is simply no reason to believe that District 204's middle and high school capacity demand will shrink at all for the next 20 years or more."

...something as simple as the job market could throw a nice monkey wrench in there.

Naturally no one hopes it does, but it's a possibility to consider.

[rew]

Arch, I don't understand how you plan for less than what's on your plate right now....where we gonna put the kids???

Enrollments are not static I don't think anyone can predict what the SD will look like in 20 yrs....but how can we ignore current needs because we're uncertain about twenty yrs from now...I don't get it.

[rew]

And quite frankly, I lived in a built out SD and they were "contracting" because of shrinking enrollment...and they leased out some buildings and consolidated and then six yrs later we're talking about bringing one of the ES buildings back on line because they were seeing regeneration in some area. What is the big tragedy in having some excess capacity? In that SD, a mature built out area...the developers were salivating over the buildings...private schools were in bidding wars for the schools. It was not a doomsday, it was no problem for the SD.

Look at the Niles schools...they have an empty HS and the SD is thinking of selling, I believe it's Niles West??? and again the developers are tripping over themselves because it's near Old Orchard. What is the dilemma?

[204parent]

Everything CFO has ever said is based upon a "bubble" that simply does not exist. Every "solution" they've ever talked about is based upon the non-existent "bubble".

The data clearly shows that we need additional capacity for the long-term. Temporary band-aids are just not adequate.

[momto4]

archwinsome said:

"There is simply no reason to believe that District 204's middle and high school capacity demand will shrink at all for the next 20 years or more."

...something as simple as the job market could throw a nice monkey wrench in there.

Naturally no one hopes it does, but it's a possibility to consider.

The job market took a pretty big hit in this area in 2001-2003 with the loss of thousands of telecom and other jobs and yet houses continued to sell and enrollment continued to go up and up.

[Arch]

momto4 said:

archwinsome said:

"There is simply no reason to believe that District 204's middle and high school capacity demand will shrink at all for the next 20 years or more."

...something as simple as the job market could throw a nice monkey wrench in there.

Naturally no one hopes it does, but it's a possibility to consider.

The job market took a pretty big hit in this area in 2001-2003 with the loss of thousands of telecom and other jobs and yet houses continued to sell and enrollment continued to go up and up.

Very true. That job loss was also very specific to a pinpoint sector of the marketplace.

[gumby]

archwinsome said:

"There is simply no reason to believe that District 204's middle and high school capacity demand will shrink at all for the next 20 years or more."

...something as simple as the job market could throw a nice monkey wrench in there.

Naturally no one hopes it does, but it's a possibility to consider.

So, we should vote no based on the conjecture that the job market may go away sometime in the next 20 years?

After the big crash in technology and the relative decimation of the I-88 tech corridor, we still had not/have not seen much of a slowdown. Worrying about potential future events really is not a good option in my opinion.

I think a better reason for voting no is that within the next 20 years we all may be dead of the bird flu. Why pay for dying from the bird flu?

[rew]

Arch, what specific job market losses do you see for our area, that would impact on us particularly or are you predicting a general economic slowdown nationwide(there are others would agree w you)...and therefore, do you believe that there's no SD in the nation that should be currently building any buildings??? Do you see impending doom for the nation's job market as a whole and would you be voting NO in any referendum across the nation??

[Arch]

rew said:

Arch, I don't understand how you plan for less than what's on your plate right now....where we gonna put the kids???
Enrollments are not static I don't think anyone can predict what the SD will look like in 20 yrs....but how can we ignore current needs because we're uncertain about twenty yrs from now...I don't get it.

It's the same reason clothing comes in sequentially numerical sizes.

Putting a size 16 on a 9 year old because they will hopefully grow into it one day makes for a lot of wasted space in the meantime. They also may never fully grow into it.

I've stated time and again, I am not the type to think it's never needed. There is a threshold of yearly enrollment (+250-300 more consistently per year than what's in there now, knowing the millenium babies are going to artificially pop it up the next 2 yrs).

Stating that the refinancing is a separate thing than the 3rd HS, but then refusing to entertain the idea of refinancing the existing debt separately for 12 years at a lower rate (to pay it off earlier and save tghe district $64 million dollars) and insisting on doing it over 20 leave more debt on the books longer IN ADDITION to the HS cost.

All the 'savings' has both the HS cost and the refinance tied together to make the 'savings' work. But in another breath, they are separate... but they're not, they are tied together.

For me, I think it's financially irresponsible to drag out current(1), add new(2), then add a (3) hit to the taxpayer with what we know is coming in 2009.

It's of course, not what you want to read and of course not what you believe but there it is.

Want a YES in a heartbeat? Have the SD refinance the existing debt for 12 years instead of 20 at the lower interest rate, THEN finance the new HS at the standard 20. That removes issue (1) above off the table and it makes (2) and (3) more livable in everyone else's mind.

Then, those worried about building out too much at this time at put at ease on the district long term finances. For the last 8 years of paying for the new school, the current debt is at least gone and off the books. The zing (if enrollment goes down) won't hurt much. Also, if we're all wrong and NIU was right, the district will be in a MUCH BETTER SPOT later financially to do something YET AGAIN if it's ever needed.

Put that in writing (12 yr refi, not 20) on the ballot, and I'll evangelize the YES vote like you've never seen.

It's called planning and positioning for all 3 outcomes: 1) under, 2) over and 3) dead on.

[rew]

Arch, do you have any numbers??? What will the current refi cost an avg taxpayer, ITRP and the addt'l growth doesn't come and we have three HS with 2500 enrollment each, but EAVs stay flat or fall, because the economy is a bust??

[gumby]

I guess I fall on the side of believing that there is and will be overcrowding and that we need a new school.

I guess everything is always about the money in one way or another. It is just too bad that we take a chance on screwing with our kids' educations for the sake of a few dollars. Personally, I think the money impact is minimal and reasonable given the benefit.

For myself, it is not what I want to read because I could not care much less. And, I am one that will be paying fot it until the end.

[Arch]

rew said:

Arch, do you have any numbers??? What will the current refi cost an avg taxpayer, ITRP and the addt'l growth doesn't come and we have three HS with 2500 enrollment each, but EAVs stay flat or fall, because the economy is a bust??

For the separate (but tied into to cost justify) refinance 12 to 20, a full writeup was posted on 'the other board'.

Basically, you can take any financing calculator and do the math:

272 million existing debt at 6.25-6.5%ish, refinance it for 12 years at 4.25%, then refinance it for 20 years at 4.25% (The numbers being used at the time).

Add up your total payments under both scenerios and your 12 year refinance will be approximately 64 million less (give or take a few million bepending on the actual %points used) in total payments levied against the district taxpayers.

[Arch]

gumby said:

archwinsome said:

"There is simply no reason to believe that District 204's middle and high school capacity demand will shrink at all for the next 20 years or more."

...something as simple as the job market could throw a nice monkey wrench in there.

Naturally no one hopes it does, but it's a possibility to consider.

So, we should vote no based on the conjecture that the job market may go away sometime in the next 20 years?

Please show me where I said you or anyone else should vote NO.

[Arch]

rew said:

Arch, what specific job market losses do you see for our area, that would impact on us particularly or are you predicting a general economic slowdown nationwide(there are others would agree w you)...and therefore, do you believe that there's no SD in the nation that should be currently building any buildings??? Do you see impending doom for the nation's job market as a whole and would you be voting NO in any referendum across the nation??

I see a general overall downturn and national trend that will further weed out the income brackets that have driven the buildout in this area. Basically the slow elimination of the upper middle class.

The bursting of the bubble theory hinges on GROWTH.