U-46 board looks for ways to raise revenue

In coming weeks, Elgin Area School District U-46 board members may vote on several proposals to replenish district coffers with the funds needed to pay employees, operate and repair buildings and pay costs on pending lawsuits.

Current cash reserves - which were $34.4 million as of April 30 - are only expected to last the district through the first week of June, said Chief Financial Officer John Prince.

Board members heard that, next month, they may need to vote on a resolution authorizing the district to issue tax anticipation warrants if state aid payments and property tax revenue continue to lag behind schedule.

Tax anticipation warrants work like short-term loans to help districts cover expenses while waiting on revenue sources.

In a May 14 memo to board members, Prince said issuing the warrants was unlikely, but "felt it was prudent to provide this safeguard for the district."

U-46 expects to have spent $422 million this year, but currently is waiting on more than $11 million in state aid payments.

Additionally, tax revenues from DuPage, Kane and Cook counties can be unpredictable in timing, Prince told the board.

Prince also said he believed the needed funds would come in. The question is whether or not they'll come in when the district needs them.

If the district needs to issue tax anticipation warrants to meet a budget shortfall, the amount and timeline for the warrants would be approved at the Monday, June 1, meeting, he said.

Additionally, Prince told the board that two types of bonds - tort bonds and life-safety bonds - should be sold to offset expenditures and fund capital improvements.

"When we adopted the (2008-09) budget last year, part of that included under the revenue $4.6 million in tort bonds to be sold to help defray costs associated with lawsuit and other related items," he said.

The four-year-old pending racial bias suit already has cost U-46 more than $6.7 in legal fees.

Additionally, the district is expected to spend about $14 million per year over the next several years for life safety projects, Prince said.

With the help of a bond underwriter and a financial adviser, Prince said, recommendations and resolutions would prepared for the board.

If the board needs to sell bonds, board members would vote on that at a later date.