Palatine Twp. Dist. 15 residents protest borrowing plan

A group of residents concerned with the financial future of Palatine Township Elementary District 15 are mobilizing to take on a monumental task.

Armed with stacks of blank petition forms, they've set out to collect 6,300 signatures - or the required 10 percent of registered voters in the district - in order to put the district's proposed $27 million bond sale on the November ballot as a referendum. And they've only got 30 days, or until April 9.

About 40 people gathered Tuesday at the Palatine Public Library to learn more about the bond sale from District 15 board member Tim Millar, one of three members who voted against the measure last week.

"This would limit our borrowing for the next 20 years," Millar said. "It really handcuffs us. It's a no-brainer not to do it."

District 15 would put about $16 million of the proceeds toward capital projects - a proposal Millar said he can back. But he takes issue with the remaining $10 million that would be used to establish a working cash fund for operating expenses.

Proponents say the fund is meant to act as an internal bank to provide cash flow between cash collections, which are coming in later than ever due to delays with Cook County's tax distribution.

Administrators recommending the sale say it locks in low interest rates, allows the district to weather the cash flow challenges ahead, and takes advantage of the cheap construction climate.

The criticisms are also plentiful.

For one, the district would have to refund a portion of its 2001 bonds to make room for interest on the new bonds. It's a necessary step because the district has, by statute, already borrowed its maximum amount of debt without going to a referendum.

Last week, board member Sue Quinn compared refunding the bonds to refinancing a mortgage on a house by another 10 years in order to have lower interest payments.

"Essentially we don't have enough funding capacity to issue the whole $26 (million) in bonds," Quinn said.

Those circulating the petitions said they feel blindsided by the bond sale, and that putting it in the voters' hands in the fall would allow for several months of thoughtful discussion and research.

The bond issue has also captured the interest of Palatine officials, who want to understand the potential impact on the village's bonding capabilities.

Village Manager Reid Ottesen said bond ratings - and their corresponding interest rates - take into account the total bond indebtedness of overlapping taxing bodies. On Councilman Scott Lamerand's suggestion, he and the village's financial adviser plan on meeting with District 15 in the near future.

"We're not saying (District 15 is) doing anything wrong," Lamerand said. "We just need to know the impact on the village of Palatine because as we go forward this could impact us negatively."