The Examiner U-46 News Feed

Board ratifies resolution for U-46 surety bond

By Seth Hancock
  The Board of Education in School District U-46 voted 7-0 on a resolution approving a surety bond of treasurer at its meeting on Monday, Aug. 6.
  The district purchases the surety bond annually but this is the first time such a resolution has been brought to the board, according to district officials, during the board discussion.
  Board member Jeanette Ward said she had not seen this before and asked for an explanation of the surety bond.
  Jeff King, chief operating officer, said that “by state law, the school district has to bond the treasurer.” He said the bonds amount is determined by 25 percent of the highest average fund balance during the year.
  “Historically, that has never come to the school board,” King said. “It’s just a law, you have to buy the bond. In this particular instance, DuPage County contacted us about 10 days ago with a list of documents that they demand we have which has never happened.”
  Previously, the district has always sent copies of the bond to the three counties (Cook, DuPage, Kane) in U-46’s boundaries to follow state law, but “in this case, (DuPage) wanted resolutions…. None of the counties required it, or at least to our knowledge they never have until now.”
  The surety bond was executed with the Ohio Casualty Insurance Company in early July, according to the resolution, and King is listed at the principal.
  Ward asked for a clarification on the purpose of the bond and if it’s “like an insurance policy in case we don’t pay our bills?”
  Dale Burnidge, director of financial operations, said: “I don’t know that I would say it’s if we don’t pay the bills, it’s more to secure the cash of the fund balance”
  Ward asked: “It’s not that it’s issuing new debt, it’s like an insurance policy?”
  “It’s an insurance policy,” King said. “That’s exactly what it is.”
  Board member Phil Costello, who is a public administrator for a park district, said “it’s similar” to an insurance policy but it’s “probably more of a letter of confidence.” He asked about the surety bond’s cost to U-46?
  King did not have the exact amount at the meeting and said he’d follow up, but “I think this year’s was just over $50,000.”
  The board also approved, by a 7-0 vote, the Fiscal Year 2019 Northern Kane County Regional Vocational System budget that evening. That budget is in balance with $1.8 million in expenditures and revenues.

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