Dist. 300 to borrow $19 million

Financial consultants for Community Unit District 300 outlined the parameters for short-term loans the district needs to rectify a cash flow shortage that district officials expect to incur in the coming months.

The Carpentersville-area school board on Monday approved a resolution for $19 million in tax anticipation warrants — or a short-term loan — the district will repay after it collects property tax distributions from local counties in June. The resolution passed 6 -0.

Officials said the district needs to borrow at least $17 million to make payroll and other outgoing expenses this spring due to late payments from the state. The state owes the district about $9 million in categorical payments for programs such as special education, transportation and government grants.

The additional $2 million would cover further revenue lags. It is anticipated the district will run out of money in late April.

Elizabeth Hennessy, a consultant with Chicago-based William Blair and Co., said the resolution allows School Board President Joe Stevens, and the district’s Chief Financial Officer Cheryl Crates to approve the sale of the warrants. The amount to borrow may not exceed $19 million and the interest rate may not exceed 3 percent.

Given the state’s financial woes, Hennessy said the district could consider a back up plan in which wealthier school districts in the state would loan District 300 the $19 million needed.

Although the district is hopeful to issue the tax anticipation warrants, Crates said the district would take what it could get.

“Whoever would loan it to us, we’ll borrow it,” Crates said.

The estimated cost of issuance is about $113,919, of which $61,919 is in interest for the loan between April 5 and June 30.

The district also issued tax anticipation warrants in the amounts of $15 million, $10 million and $11.97 million in 2005, 2006 and 2010, respectively.