Oak Park D97 authorizes up to $12 million in tax anticipation warrants, approves working-cash loan

The Oak Park Elementary School District 97 Board of Education on Oct. 14 approved two measures to protect the district’s cash flow amid delayed Cook County property-tax collections: a resolution authorizing the issuance of not-to-exceed $12 million in taxable tax anticipation warrants and a companion resolution authorizing a loan from the working-cash fund to the bond-and-interest fund.

District finance staff told the board the county reported the delay stems from a Cook County software migration that has slowed transfers from the county clerk and treasurer. Administrators said the district believes the specific software migration is a discrete cause but cautioned similar delays could occur in the future, prompting discussion about raising the district cash-reserve policy (now 3to6 months) to a higher top end such as 6to9 months.

Finance staff outlined two primary options should tax receipts not arrive on the district timeline: liquidate investments (which can trigger realized losses and prepayment penalties on certain CDs) or issue TAWs (short-term taxable notes typically carrying interest and issuance fees). Staff said TAWs are the most timely and cost-effective if the district must bridge to the receipt of tax revenues, because the warrants can be repaid as soon as the taxes arrive.

At the meeting a board member moved to approve the resolution authorizing issuance of not-to-exceed $12,000,000 in taxable TAWs. The motion was seconded and the roll call vote recorded the following responses: Kearney, Moore, Spurlock (recorded variously as Sperlock/Storlock), Ross (recorded in the transcript as Ross Drudin/Dribben/Gribben) and Herb Johnson voted yes. The board then approved a related resolution to loan funds from the working-cash fund to the bond-and-interest fund to cover an upcoming principal/interest payment should tax revenues not arrive in time.

Administrators said the district will not issue the TAWs if the district receives sufficient tax receipts before its cash position requires borrowing; the working-cash transfer would be used first to minimize borrowing costs. Staff estimated issuing a TAW would carry interest and fees (staff referenced roughly a 5% financing cost in their discussion as a planning figure), while liquidating certain held investments could cost the district several tens of thousands of dollars in lost interest or penalties.

The board did not set a specific draw amount under the working-cash transfer; the working-cash resolution grants authority to transfer allowable amounts under state law as needed for bond-and-interest obligations.

The motions passed on voice/roll-call votes as recorded in the minutes; administrators said they will return with any necessary implementing documents if the district executes the warrants.