The District 56 Board of Trustees were asked at last night’s meeting to approve a resolution to repay a loan………from themselves.
The issue is this: There is an immediate need to proceed with work on three projects. They are:
A sound system for the gymnasium at Clinton High School.
- An upgrade of security systems at certain District 56 elementary schools.
- Repair/Renovation of tennis courts half of which are not usable and unsafe.
The three projects together should cost about $250,000 and all are in agreement that work on all three projects should begin at once. So, how to pay for it?
Dr. Gerald Robinson, the district’s finance director, came before the board with a potential solution.
First, he told the board they could simply pay the bills out of the General Fund and reduce the fund’s balance. He advised against that.
Second, the board could spend the money now and then hurriedly issue bonds up to their estimated limit of 3.7 Million Dollars and repay the General Fund from that issue. The hurry comes from the fact that legally they’d have to get the bond issue done within sixty days of spending the money. Dr. Robinson said he wasn’t even sure that bonds could be issued that quickly.
The third option was to pass a resolution stating the board’s intent to issue bonds not to exceed 3.7 Million Dollars. The resolution also outlined the needed immediate expenditures and expressed the board’s intent to use the future bond issue to repay the General Fund for those immediate expenses. He told the board that according to the district’s bond lawyers, passing such a resolution would make it possible to issue bonds and repay the General Fund from the proceeds at any time up to three years from now.
After lengthy discussion, the resolution passed unanimously.
The resolution does not obligate the board to issue bonds. It does obligate them to use $250,000 of any bond proceeds to repay their own General Fund if bonds are issued. If no bonds are issued, the $250,000 would be recorded on the books as a quarter million dollar draw down of the General Fund balance.