Already on the state board of education’s financial watch list, the Proviso Township High School District is bracing for a year-end deficit of more than $8 million and, meanwhile, is preparing to issue millions in new bonds.
School board members approved a resolution this month setting the table for $18 million in working cash bonds. Of that sum, $3 million would be transferred from an existing account.
The bonds would allow the schools to meet ordinary expenses, such as payroll, according to the language of the resolution. However, Superintendent Robert Libka described the move as a refinancing of sorts that should lower the district’s debt payments, thus increasing the schools’ ability to borrow new money. But according to Libka, there is no intention to do any actual borrowing.
“My understanding would be that our borrowing capacity was increased by $15 million,” Libka said.
The language of the resolution approved at the May 12 meeting, however, makes no reference to refinancing the district’s current bond payments and specifically states that the purpose of the bonds is to “incur an indebtedness” in order to boost the available balance in the working cash fund.
According to financial records maintained by the Illinois Board of Education, Proviso’s public high schools were already carrying more than $52.3 million in long-term debt at the close of the 2007 fiscal year. Libka, however, estimated that roughly $12 million in debt has been paid over the last 11 months and the only outstanding bond payments are for the $40 million bond issued to construct the Proviso Math and Science Academy in Forest Park.
In stating the district is not incurring any new debt, Libka said the bonds should actually improve Proviso’s overall financial rating with the state. An Illinois State Board of Education financial advisor working with District 209 was not available for comment Monday.
In 1998, District 209 was saddled with $24.5 million in debt.
Since 2003, the district’s working cash fund has dwindled from a balance of more than $23.2 million to a 2007 balance of $7.7 million.
The ISBE evaluates each school district in several key areas to come up with a financial profile. According to the latest rankings released in May, District 209 achieved one of the poorest scores in the state with only five districts separating Proviso from the bottom of the list.
A spokesperson for the district said Assistant Superintendent Nikita Johnson, who manages Proviso’s finances, was out of the country and unavailable for comment. Board President Chris Welch did not return a phone call seeking comment.
In a 4-1 tally to approve the resolution, Forest Park resident and board member Robert Cox abstained. Board member Theresa Kelly cast the lone dissenting vote.
Speaking several days after the meeting, Cox said he did not recall any vote on the subject of working cash bonds and that he had no memory of having discussed the matter either privately or publicly with administrators or other board members.
Barring a petition from 10 percent of the registered voters within the district to force a public vote in November, district officials must wait 30 days before taking action on the resolution.
As part of the district’s deficit reduction plan for the current year, also on file with the state, District 209 “will need to seek referendum” in the coming fiscal year.