Dist. 300 looks to borrow $11 million

As further evidence of the cash crunch Community Unit District 300 is facing, officials on Monday recommended borrowing $11 million to cover payroll and day-to-day expenses.

The borrowing comes on top of more than $6 million in budget reductions - including layoffs and program cuts - that district officials are contemplating for the 2010-11 school year.

Both moves are prompted by the state's inability to pay its bills. The state still has not paid more than $6 million it owes the district this year, officials said Monday.

Although the state borrowed money to pay the district $5 million last week, District 300 Chief Financial Officer Cheryl Crates said Monday, "We're unclear as to whether any of those future fundings are going to come in."

By April, District 300 will not have enough cash to cover its expenses, even after using up $35 million in cash reserves, Crates said.

The district still will need $9 million to cut paychecks and pay vendors from April to June when it receives the final installment of its property tax revenue, Crates added.

The finance chief is recommending the district borrow an additional $2 million in the event the state continues to delay payments.

District 300's financial adviser estimates it will cost the district almost $40,000 to issue the loans, in addition to $11,400 to $17,700 in interest.

The warrants would be issued in April; both the warrants and the cash reserve fund would be repaid with the district's June tax collections, Crates said.