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| NewsThursday, October 25, 2007 4:24 PM CDT |
Unit 5 favors asking voters about raising taxes
NORMAL — Some Unit 5 school board members don’t want to require taxpayers to fix the school district’s cash flow problems without asking in a referendum — even if they legally can. At its regular meeting Wednesday, Unit 5 school board members discussed but took no action on various options for correcting a cash flow problem. For the past four years the district has had to borrow money for a few months each spring to cover expenses until tax revenue or state aid arrives. Board member Meta Mickens-Baker said asking the public for money without a referendum may be “permissible” but she wouldn’t support it. Board member Mark Pritchett agreed, noting other public bodies have undertaken major spending plans in recent years without referendums. Board members also seemed to prefer issuing $10 million worth of bonds to be repaid in five years instead of permanently raising tax rates to cover the annual shortfall in operating expenses. Superintendent Gary Niehaus said decisions on referendums on the Feb. 5 ballot must be made at the board’s Nov. 28 meeting. Another referendum question being planned involves a potential building project. The estimates have ranged from $100 million to $120 million, but the final figure may be less than $100 million, he said. A more precise cost estimate and other information needed to make the referendum decisions is expected tonight. The board will meet with its architects and members of the public involved in planning workshops for the building project. The cash-flow issue is tied to growth because adding buildings would increase annual operating expenses, according to the district’s Warrenville-based financial consultant PMA Financial Network Inc. Last year, the school district borrowed $7.7 million in the spring to cover costs until tax revenues arrived. That short-term borrowing cost $25,000 in interest, Niehaus said. He outlined several options the district could consider for the cash-flow crunch. They include raising the education fund tax rate, currently $2.62 per $100 equalized assessed valuation, by 10, 15 or 20 cents per $100 EAV. Niehaus said another suggestion of raising the operations and maintenance fund tax rate by 5 or 10 cents per $100 EAV would not fix the cash-flow problem. Raising tax rates would not help in the short term because tax money wouldn’t be received until the next year. If a bond is approved, money could come within about 60 days. Board member Scott Lay favors the $10 million working cash bond sale, which would add about 13 cents per $100 EAV to the tax rate for five years. He said he was less inclined toward a permanent rate increase to cover operating funds. Board member John Puzauskas agreed. In the years 2012 and 2013 the district will have a better idea if growth will continue at the same rate. Having a chance to re-evaluate in five years would be financially responsible, he said. The district can issue such bonds without a referendum — unless 10 percent of the registered voters sign a petition to force a referendum, Niehaus said. |
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