D210 Board Makes Plans to Offset Late State Payments

A potential cash-flow shortfall this summer caused by late state payments has officials planning ahead to find a way to bridge finances until the district receives the money it's owed.

And that bridge could come in the form of tax anticipation warrants, short-term "payday" loans of sorts that are given to the district in the understanding that it will be able to pay them back when they receive state money.

The D210 board of education will vote on a resolution that would allow the district to put together the paperwork needed in case the district needs to issue those warrants, Supt. Lawrence Wyllie said. Laying the groundwork now is necessary because it takes time, and the board only has one meeting in April, Wyllie added.

"This is a just-in-case resolution to have paperwork in place should we need to issue warrants in April or May should we run into cash flow problems," board President Arvid Johnson said.

According to district projections, the board will have a fund balance of $686,616 for a short period in May if the state doesn't pay what it owes D210 in categorical payments, which is the money that goes to offset state-mandated school programs such as special education, busing and other areas.

That balance is too low for the school to cover its last payroll allotment for that month, and the warrants would be a bridge until the state pays up or the district receives June's tax levy distribution, the main source of D210's revenue.

However, the district wouldn't need to issue tax anticipation warrants if the state pays even a small amount of the categorical payments before that time, Wyllie said.

This isn't the first time the district has had to issue warrants, Wyllie said, adding that D210 went that route five to seven years ago.

But officials are hesitant to use them for two reasons. Philosophically, Wyllie said he wants the district to operate by spending only what it has. And although the district would only pay 2 percent interest on the warrants, that's 2 percent more than what it would have to pay if the state delivered on their debts on time, Johnson said.

"Is it disheartening? Yes," Johnson said. "But it's the same for everyone who's owed money from the state."