Mt. Prospect approves loan to aid library operations

Mount Prospect will extend a temporary line of credit to the village's library to help pay its bills through the end of the year.

The library, which gets over 90 percent of its revenues from property taxes, hasn't yet received its second 2009 tax levy payment from the county. So its board has asked the village for a short-term loan not to exceed $700,000 to fill the cash shortfall.

The library might not receive tax receipts until December or January, and the district only has a narrow margin of funds available to pay bills in December, according to a letter sent to village by Marilyn Genther, the library's executive director.

Without the tax payments, the library won't be able to meet its Jan. 7 payroll, and would have to close its doors, Genther said.

That's when the city stepped in, approving an agreement with the library during a village board meeting on Tuesday.

“(Closing) would be really horrible for Mount Prospect, Mayor Irvana Wilks said.

Under the agreement, the library district promises to pay the village in full by Jan. 31, 2011. If not, a 1 percent per year interest rate will be charged, and all principal and interest would be due no later than Jan. 31, 2012.

The first payment to the village is due no later than seven days after receiving funds from the county.

The Des Plaines library is facing a similar situation due to late property tax payments, though it's different from Mount Prospect's library, which is a separate taxing body from its village.

This isn't the first time Mount Prospect's library has received late tax receipts.

In 1998 and 1999, county tax bills were issued in October instead of September, and the library and village had a similar agreement establishing a line of credit.

The library soon after built a combined fund balance and developed a five-year financial plan to make sure it had enough money in the future. Now library officials hope to plan beyond December, into January.

“Faced with the continuing creep of tax bill issuance by the county to even later and more uncertain dates, we will develop a financial plan to gradually increase our fund balance and reserve, Genther said.

At Tuesday's village board meeting, trustees criticized the county for its late payments.

“It's just another thing the county has done to us, and after the election, they'll send the bills out, said Trustee John Korn.

Added Trustee Steven Polit: “We should be able to get the money owed to us on time. We shouldn't even be having this discussion.

Polit said the agreement would save taxpayers money, since the library would otherwise have to get a loan from another source, likely at a higher interest rate.

Trustee Arlene Juracek said the deal is no risk to the village since the property tax revenues are coming in, albeit late.