Des Plaines approves loan for self, library

The Des Plaines city council this week authorized getting a short-term loan from FirstMerit Bank for $5 million so the city could make its Dec. 1 debt service payments and the municipal library can stay open through the year end.

The loans $1.5 million for the library and $3.5 million for the city were necessary due to delays in the second installment of property tax disbursements from Cook County, officials have said.

City officials anticipate they will get the slightly more than $12 million owed in property tax revenues from Cook County anytime between Dec. 6 and Feb. 28, 2011. The library also is awaiting roughly $3 million in property tax receipts.

The city's general fund balance is insufficient to cover the roughly $8 million in principal and interest debt service payment due before Dec. 1.

Without the city's help, the library would have had to reduce hours of operation and staffing in December, providing minimal library services.

It will cost the city roughly $23,000 in interest and fees to borrow the $5 million for 60 days. The loan will be repaid once property tax receipts come in, officials have said.