We’ve had occasion lately to congratulate several suburban communities or governing bodies for cooperative efforts that result in more efficient programming or money savings through shared expenses. Three school districts joined in a consortium to produce wind energy and share the savings. Two local towns consider merging their police forces. Elgin and the park districts in Streamwood and Hoffman Estates cooperated to share space for a dog park.
Now, news of another unique venture in Lake County cries out to be added to the list, along with questions about whether it couldn’t become a more common practice throughout the suburbs.
This arrangement, reported this week by Daily Herald staff writer Mick Zawislak, finds Libertyville Elementary District 70 lending $300,000 to neighbor Gavin Elementary District 37 to help Gavin bridge a short-term cash shortage.
It’s not at all unusual for school districts or even local governments to run short of cash during the course of the year while waiting for disbursement of property tax or other government funds. The usual practice is to take out a tax-anticipation loan to cover immediate expenses and pay back the money when the taxes arrive.
That, in fact, is what Gavin has done in each of the past three years. But this year, District 70 happened to have some money available because its investments in some certificates of deposits were coming due. So, rather than roll over the certificates at a nominal rate, District 70 agreed to take a slightly higher rate — still just 0.7 percent — from Gavin on a $300,000 short-term loan. Gavin, which likely would have paid close to 3 percent on a tax-anticipation loan, ended up with a nice savings.
Granted, win-win though this arrangement surely is, it is far from high finance. District 70’s take when the loan is paid back will be less than $400, and Gavin’s savings will be less than $2,000. But, among the many encouraging things about this arrangement is the recognition by the districts that a few hundred bucks saved here or there is worth a little effort and cooperation.
If government officials are this conscientious about watching small sums of money, we naturally feel more comfortable about how well they are monitoring what’s happening with the larger amounts.
This particular accord between districts 37 and 70 has its origins basically in a confluence of circumstances hitting at the right time for both school systems. But, hopefully, they’ll be keeping their eyes out for similar opportunities in the future, and their example should provide a model that other school districts and local governing bodies can follow whenever one is running a little short of cash temporarily and a neighbor can pitch in to help.Copyright © 2013 Paddock Publications, Inc. All rights reserved.