INA — As the clock ticks down to the budget deadline — arriving at midnight Friday — at which point the lack of a budget deal could devastate state-run agencies from Medicaid to the department of transportation, area schools are having to hedge their bets. Rend Lake College did just that earlier this month.
During a special meeting of the RLC board June 13, trustees finalized plans that began in February to issue $5 million in bonds through Stifel, Nicolaus & Company Inc. RLC President Terry Wilkerson said this was a preventative measure to ensure the school stays financially stable as it anticipates having to weather yet another year with limited or nonexistent state funding.
“This bond was designed to replenish our reserves, so we can operate in the future. We've been anticipating what is happening, not to this extent, but we started planning long ago,” Wilkerson said of the decision in an email to The Southern.
The school has five years to pay down the debt and Wilkerson said there was a competitive bid for the interest through a third party, who Wilkerson said would ensure RLC has a competitive bid and that it is as low as RLC can get.
RLC has not yet had to tap into the funds. Wilkerson said the move was to ensure the school could meet their expenses in the coming year.
“There are no specific items for the bond funding. Looking down the road with the property tax freeze, and other policies being talked about, we wanted to replenish our reserves beforehand,” he said of the possibility of another year without a state budget or of potentially significant funding changes to education as part of a budget deal.
Issuing bonds is nothing new or even out of the ordinary. Wilkerson said this has been done several times in the last several decades. However, this is the first time the school has had to do it because of lack of state funding. It has been nearly more than three calendar years since RLC has seen normal payment from the state. Wilkerson said even before the budget impasse, the state was three to four months behind in payments as the state's finances grew tighter and tighter.
Despite a need for funding, Wilkerson said the decision to borrow again will not negatively impact their deficit, at least not too much. The entire crisis, though, has had the school taking a harder look at every part of its operation. Wilkerson said lower enrollment for RLC, as well as other state schools, is some of the collateral damage of the unprecedented state budget standoff.
“We are constantly evaluating everything we do,” he said. “We're looking into every position that is vacated, and asking about the need, or if it can be combined or absorbed into other positions.” Despite the dark outlook on the horizon looking toward Springfield, Wilkerson said at RLC, there is no plan to cut programs, staff or services at the moment.
Wilkerson has been in his post for the last five years. He said his years of experience as a farmer have prepared him for the ebb and flow of running the college.
“There are thin and thick years in agriculture,” Wilkerson said. “You still have to put out a crop every year, whether the grain bin is half -full or -empty.”