Dist. 101 returns to short-term bonding

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Morris Community High School District 101 hasn't had to use working cash bonds since 1999. That, however, is about to change. The board held a Bond Issue Notification Act (BINA) hearing on Monday night, prior to its regular meeting. At the budget hearing held Sept. 8, Dr. Pat Halloran said the district is making a “steady climb to the positive,” with a budget that included $1,363,000 in working cash bonds. During the BINA hearing, members heard the district has, for the past several years, used receipts from the Tort Immunity levy for some expenses that were embedded within the Education Fund. After the looking at the previous plan, the district has decided it will no longer use the Tort to fund those personnel costs and, instead, will make the move back to working cash bonds. “We've looked at our needs,” said Halloran. “For the short term need we have of three to five years, we feel this is the appropriate thing to do. We've discussed the market and it is not as big an impact on only $1.5 million with a short-term payoff.” The goal of the district is to keep the tax rate at the present level of approximately $1.80 per $100 of equalized assessed valuation. Halloran said the District is in the process of gaining the authority to issue the bonds, which are not to exceed $1.5 million, to raise the levy for bonds and interest to the necessary level. “At this time, we expect the amount of the bond will be closer to $1,360,000,” said Halloran. The Plan of Finance report also stated that the District's fund balance on June 30, 2008, was inadequate and continues to be unable to provide the cash flow needed through the end of the school year. The report also states the proceeds of the Working Cash fund bond sale will initially be deposited to the Working Cash Fund. From there, it will be made available to proved for the embedded personnel costs, augment the district's fund balance, and provide for adequate cash flow. Halloran stated there may be a lower interest rate as an affect of the current economy, especially with the district's rating. Also on Monday night, the board discussed the proposed extension of the Morris Tax Increment Financing district and Halloran provided a report on the school district's view of the TIF over the years. “I'd like to educate everyone on the process,” said Halloran. “I've researched the district's view of the TIF since 1986.” In his report, he showed the original reasons for the TIF, which included the discovery of radium in the city's deep well system, the need for an additional sewage treatment plant, new water and sewer lines, the provision of off-street parking for downtown, and it's design to stimulate the economic growth of the area. He explained where the original five areas included in the TIF were and discussed the different amendments to the TIF that either added to or removed land from it, and the newly proposed amendment that will add two parcels. He chronicled the monies the city has given to the school district to be used for capital improvements, which included $250,000 in May 1996. In 2000, the city gave the District $165,000, and since that time, has given $100,000 per year. “The money we receive has to be used for capital improvements and can't be used in the general education fund because of the way the TIF was originally set up,” said Halloran. In addition to the proposed fourth amendment to add two acres including the Gebhard Brewery and the Community Landfill property, the city is currently requesting a 12-year extension of the TIF. Halloran said they are expected the proposal from the city in the near future, which he will discuss with the board at that time. “I would expect the proposal to protect the revenue we are receiving and have no additional financial impact on the district,” said Halloran. “It really needs the support from all the school districts to move forward.” His report conclusion showed the TIF through 2007 meant a loss of $7.5 million. With the return of $1.3 million through the life of the TIF, the loss to the district was about $6.2 million over the past 20 plus years. “Now whether or not the growth would have happened without the TIF is a factor we don't know,” Halloran said. “So the losses may not have been that amount, but we don't know whether the growth would have been the same.” He said the TIF has helped promote economic development and has increased funding from the state after Midwest Generation left the area. “There will be many opportunities to continue discussions ahead of us,” said Halloran. “There will also be opportunities for the public to be educated.”