Dist. 118 to borrow up to $16 mil to cover for state shortfall

Wauconda Unit District 118 officials have agreed to borrow up to $16 million to keep the district running while it waits to receive its property tax revenue from the state. Superintendent Dan Coles said the state is two quarters behind on payments of the district's main revenue source.

District 118 will issue tax anticipation warrants, which essentially is a bank loan based on money owed by the state. Such warrants have been used in previous years and mean an extra interest expense that added up to more than $78,000 last year.

Had the district been able to issue the $16.9 million in working cash bonds as planned this fall, Coles said, tax anticipation warrants would be unnecessary.

Registered voters in the district petitioned to push that issue to a referendum question in February, but were denied when 85 signatures were ruled invalid by an electoral board. The group is appealing in Lake County circuit court and a decision is not expected until February.

"We would like to avoid doing these tax anticipation warrants because the interest is something we'll lose and never get back," Coles said.

The school board on Thursday approved the warrants and a $2 million interfund loan from the working cash fund to the educational fund to cover expenses. Both moves happened earlier than usual this year because of the delay in state funding.

The district did not need the voters' approval to issue working cash bonds. However, if 10 percent of registered voters signed a petition within 30 days of the decision, the issue would have to go to a referendum question.

"We already paid our taxes to the state, so why should we be double taxed with them getting that money from the taxpayers instead of borrowing from the bank?" asked Wauconda Township Trustee Mary Schorr, who led the petition drive.

Petition supporters gathered 1,576 signatures, but 85 were ruled invalid by an electoral board, leaving them 52 signatures short of the required 10 percent to force a Feb. 2 referendum question. Coles said if the decision is confirmed by the circuit court, the district will issue the bonds because he expects state funding to continue to lag for some time.