Cook County, Illinois, extended the deadline for eligible local governments to participate in a $300 million loan program by one week that provides interest-free loans to manage a months-long backlog in collection of property taxes from the second installment.
The bridge loan program announced in July will spare suburban tax agencies from having to issue tax anticipation notes to bridge the gap, with eligibility tied to a local government’s needs and its operating costs. access to capital markets. Up to 500 tax organizations could be eligible.
The county has extended the deadline until the end of business Friday and is providing technical support to apply.
“This program has the potential to do a lot of good while providing financial breathing room for local governments facing a cash flow crisis,” said County Council Chairman Toni Preckwinkle. “By extending the deadline, more local governments in Cook County have more time to access millions of dollars in interest-free loans that can cover payrolls, pay bills and provide much-needed services to our residents. .”
The application window will close on September 9 at 5 p.m. Central Time, and funds are expected to release in September. Additional information and documents are available at cookcountyil.gov/bridgefund.
The county is working with PNC Bank to provide a line of credit to fund the bridging loan program. The office of the county’s acting chief financial officer, Lawrence Wilson, will handle loan applications and distribution. The administration will seek board approval this month for borrowing up to $500 million for the program backed by its own credit.
The county will prioritize loans based on an established equity model for distributing federal pandemic assistance in the CARES Act: Public School Funding Metrics, Three-Year Average Recovery Rates, and Need for Funding vital services.
Reimbursable interest and administrative costs for a $300 million program total $5 million, which would increase to $8 million if the county operated the full $500 million authorization. Loans will be repaid directly to the county as tax revenues are distributed.
Eligibility guidelines limit loans to tax agencies with less than 120 days of liquidity and at least a rating of at least one notch below county. If an entity has a shared rating and at least one is lower than the county rating, it is eligible.
The county currently carries a general obligation rating of AA-minus from Fitch Ratings, an A2 from Moody’s Investor’s Service and an A-plus from S&P Global Ratings. Unrated municipalities are also eligible.
Paper districts, which serve as a third-party tax collection hub, are not eligible, as are districts that overlap with more than one-third of its jurisdiction outside the county. Chicago-based tax districts are also not eligible. The minimum loan is $20,000 and the maximum would be based on expected payments and days of cash available.
Second installment tax bills are usually due over the summer, but won’t be out until later this year. Preckwinkle blamed the delays on a combination of the COVID-19 pandemic and a major technology upgrade being completed – staying clear of a dispute between two other elected bodies.