Cook County awards $191 million in loans to bridge property tax payout gap

Cook County Board President Toni Preckwinkle’s office awarded stopgap loans to 32 villages, library and school districts worth $191 million, an effort to dull the impact of this fall’s property tax delay that nonetheless left many suburban agencies already in dire financial straits with less money than they asked for to help make ends meet.

Several officials praised Preckwinkle's efforts, and the payouts also left $109 million in the loan pot, according to data received through a Tribune open records request.

Preckwinkle rolled out the property tax bridge loan program earlier this summer, offering enough money to cover two months of expected property tax revenues to eligible suburban schools, libraries and villages. She did so while also announcing tax bills would again be delayed, the latest blow to taxing bodies that rely on the money.

‘Needed lifeline’

Several applicants shot for the moon, according to the bridge loan data. Mount Prospect District 57 requested $20 million and got back just shy of $6 million. Skokie/Evanston School District 65 asked for $68.3 million and received just under $23 million. The city of Berwyn asked for $13.5 million and received $5.6 million.

Most applied before the county announced the official date bills would be mailed and said they worried about lengthy delays getting their money back.

Several south suburban local governments were among the group that requested much more than they got. Many of those communities have troubled budgets and some of the lowest property tax collection rates in the county, which can create a vicious cycle that increases financial pressure on property owners who do pay.

Harvey officials did not respond to a request for comment, but sought $24 million from the loan program. The county ultimately lent the city about $1.7 million.

Harvey’s City Council voted unanimously last October to apply for the so-far rare designation of a Financially Distressed City, which the state denied in April. At the time, Mayor Christopher Clark said that the city was $164 million in debt due to a combination of factors, including a trail of expensive scandals left by predecessor Eric Kellogg, and chronically low tax collection rates.

The village of Robbins, which applied for $350,000, received $150,000, according to the data. Its collection rate is just slightly lower than Harvey’s.

Dolton applied for $9.5 million and got back $1.85 million. The village is still embroiled in lawsuits regarding alleged financial mismanagement on the part of former Mayor Tiffany Henyard. In February, the village filed suit against Fifth Third Bank seeking $2 million that officials allege the institution improperly paid out in fraudulent checks signed by Henyard.

Other districts said they based their request on concerns that distribution holdups would strike again. Last year, Cook County Treasurer Maria Pappas’ office struggled with contractor Tyler Technologies to get money from county coffers out to districts. She muscled through some solutions as delays dragged on, in some cases direct-depositing some money around Christmas, but issues and confusion lingered.

If last year’s bill delays were a blow to budgets, distribution troubles were the uppercut. Several districts were underpaid, overpaid or couldn’t make heads or tails of where their finances stood because the reporting portal they typically could check wasn’t working. The portal reports how much money districts are receiving by fund and tax year, which officials rely on for financial planning and audits.

This year, the treasurer expects distributions from September bills to begin landing in October.

“We have distributed all funds collected through July. We anticipate August distributions to occur within 2 week(s) and further distributions to occur weekly after that,” Pappas spokesman Mike Puccinelli said in an email to the Tribune.

The distribution portal is still not fully functioning. Puccinelli said all but 318 districts (of nearly 2,000 across the county) are receiving accurate distribution reports through June 30. “Tyler is working to provide accurate reporting on the remaining districts and to fully automate its reporting system for the future,” he said.

New Trier Township High School District 203 — which is 91% funded by local property taxes — received a $22 million loan from the county’s program. The school system originally asked for $40 million, deputy superintendent Christopher Johnson said, “based on the district’s projected cash-flow needs if property tax distributions were delayed again, not on an expectation that the full amount would necessarily be awarded.”

West Northfield School District 31’s superintendent said in a note to her local county commissioner that the $3.3 million they received “was a needed lifeline,” but they were disappointed about a lack of communication lately from Pappas’ office about the timing of distributions.

“The application process was straightforward, the support was excellent, and the program ran seamlessly,” Superintendent Erin Murphy said in the letter she shared with the Tribune. “Most importantly, receiving the loan meant we could make payroll in September while we worked through other solutions as we wait for property tax revenues to arrive.”

Wheeling Township District 21 requested $34.2 million, but received $18.9 million. Superintendent Michael Connolly similarly said the district asked for more, given the pre-K-8 district’s experience with delays last fiscal year.

Connolly said the bridge loan provided “surety” the district would have the resources to cover regular expenses if property tax distributions are significantly delayed again.

Since tax bills went out on Sept. 1, he said, “we are more hopeful that we will not encounter the unacceptably long delay we experienced last year.”

The loan came as property tax bills are a month later than in a typical tax year, which means they are due by October. The delay again has created a potential cash crunch for districts during the wait for their cut — often a main revenue source for local governments — and added to the pile of complaints about the county’s decade-long property tax system upgrade.

At Palatine Township Elementary District 15, officials requested $30 million to cover operational expenses into November, Chief School Business Official Diana McCluskey said. The loan was intended as a safeguard against potential tax distribution delays.

The district was awarded about $27.3 million.

“We remain concerned about the timeline of when the county will disburse these collected tax funds,” McCluskey said in an email.

In a revenue pinch, some districts opt to borrow short-term cash, get a line of credit from their bank or issue “tax anticipation” notes or warrants, which cost extra in interest. Preckwinkle aimed the loans at districts with limited borrowing capacity or low cash reserves, offering interest-free money with a simpler application.

Her office, meanwhile, will get automatically paid back when property tax revenues come in.

Relatively few districts applied for the loans in years past. To encourage sign ups, Preckwinkle’s office this year broadened eligibility and offered technical assistance for less-experienced leaders to perfect their applications. Preckwinkle’s team said the efforts helped.

“Schools, local governments and libraries across Illinois received nearly $200 million, which represents the most loans and dollars distributed in the history of the program,” spokeswoman Hannah Fierle said in an email. “We remain committed to supporting the local taxing districts and the longer-term work of fixing a fragmented property tax system.”

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