With tax cash late from county, Des Plaines OK's $1 million loan to library
The delayed collection of property taxes in Cook County has prompted the Des Plaines Public Library to seek a $1 million loan from the city to cover operating expenses.
Library leaders may not need the money but asked for the loan just in case they do. Its fiscal year ends Dec. 31, as does the city's.
"If I can stretch the remaining money we have, and the taxes start coming in now, I won't have to borrow from the city," library Director Jo Bonell said Tuesday. "I could not take that risk, however, and that is why I approached the city."
The city council approved the short-term, interest-free loan Monday night.
Unlike most suburban public libraries, the Des Plaines Public Library is a component of the city's government, not a separate taxing district. Although the library has a board and a director that oversee staffing, policy and fiscal issues, money for its budget is collected by the city.
And unlike independent library, school or park districts, the library board can't secure a loan from a bank on its own, Mayor Andrew Goczkowski pointed out.
The second installment of this year's tax bills are only now going to Cook County property owners. They usually go out in June, with payments due by Aug. 1. Governmental agencies typically get their share of the cash in September.
The process was delayed because of compatibility problems involving the Cook County Assessor's office's new computer system and the Board of Review's older system. Those agencies handle assessment appeals.
Various officials predicted the delay would create financial hardships for some taxing districts, especially ones with smaller fund balances.
That's what happened at the Des Plaines library.
"We cannot operate the library without the timely receipt of that tax money, paid by the residents of Des Plaines to sustain their public library," Bonell said.
City Manager Michael Bartholomew said the loan isn't needed because of financial mismanagement at the library.
"It's a cash flow problem," he said.
Still, 6th Ward Alderman Malcolm Chester chastised library leaders for requesting the loan and suggested they build a larger financial reserve.
Bonell said library leaders already have been frugal, delaying and cutting expenditures to remain open despite the tax shortfall.
Tax payments owed to Des Plaines' municipal government are delayed, too, but city hall has enough cash in the bank to get by, Goczkowski said.
Assistant City Manager and Finance Director Dorothy Wisniewski offered to work with Bonell to figure out how the library can create a larger fund balance.
This isn't the first time late property tax collection has caused financial problems for the library.
In late 2010, the library asked to borrow $1.5 million to keep the facility open and fully staffed that December because of delays. Library officials had considered closing the library for the month or reducing operating hours and staff.
The library never actually borrowed the money, however, Bonell said.