ISU board calls special meeting on bond sale

NORMAL, Ill. — The Illinois State University board of trustees will have a special meeting at 11 a.m. Saturday to speed up issuance of revenue bonds ahead of possible changes in the federal tax code.

Fell Hall at Illinois State University

The university has been planning to issue new bonds next year to refinance debt on the Cardinal Court project and the Student Fitness Center. The new bonds are expected to have a lower interest rate than the existing bonds.

However, provisions in the tax reform measure under consideration in Washington could limit the university's ability to use tax-free bonds to pay off debt early. Therefore, the special meeting was scheduled so the transaction can be completed before Jan. 1, explained ISU spokesman Eric Jome.

The meeting will be in Room 202 of ISU's Nelson Smith Building, 718 W. College Ave.

Refinancing the bonds is expected to save nearly $24 million over the next 25 years. However, the amount of savings would be reduced if the university can't use tax-exempt bonds, officials said.

Dan Stephens, ISU's vice president of finance and planning, said last month, "The ability to refinance at a tax-exempt rate could save several million dollars."

Under the plan the board will consider on Saturday, about $60 million in auxiliary facilities system revenue bonds will be issued.

Facilities in the auxiliary facilities system were constructed with proceeds from revenue bonds or produce revenue used to operate and maintain auxiliary facilities. Those revenues can be used only for paying off outstanding revenue bonds or operating and maintaining auxiliary facilities.

With this transaction, ISU will acquire the Cardinal Court student apartment complex, which was built in 2012 as a public-private partnership called the Collegiate Housing Foundation.

"In essence, we will be buying out the land leased with Collegiate Housing Foundation and taking over total control of Cardinal Court and the property on which it sits," ISU President Larry Dietz explained at a board meeting in October.

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Higher education bonds Illinois
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