Kane County will loan St. Charles Township about $625,000 to meet the township’s short-term obligations, a deal officials are touting as a win-win for local government and taxpayers.

Under the terms of the agreement, St. Charles Township will pay Kane County about 2 percent interest on the loan, a lower rate than the township would have been able to land from a bank or commercial lender.

That 2 percent interest return for Kane County is higher than the amount the county receives from local banks for holding onto the property tax monies the Kane County Treasurer’s Office collects on behalf of the township.

Kane County Board Chairman Chris Lauzen said the revenue would help Kane County taxpayers and the lower interest rate will help St. Charles Township and all Kane County taxpayers.

“This is a good example of intergovernmental cooperation where everybody saves money,” he said. “Wherever and whenever it’s practical, we’re hoping to use innovation and common sense to benefit the residents of Kane County.”

The deal is similar to an intergovernmental agreement between the county and St. Charles Township back in March 2016, when the county lent the township $400,000 at an interest rate of 1.5 percent.

Kane County Treasurer David Rickert

Kane County Treasurer Dave Rickert said the repayment will be made through property-tax collections, another advantage because the payment method is simple, direct and guaranteed.

“Essentially, it’s a creative way to provide short-term financing for a local taxing district and boost the revenue of Kane County’s investment yield. So the taxpayers are benefiting from both sides.”

Rickert said the county’s average interest return is about .75 percent. So a 2 percent interest rate is a step in the right direction.

“We’re going to earn about $7,800 more than we would have had we not given them this opportunity,” he said. “It’s small potatoes, but more important is the concept.”

Rickert said the county has offered the same financing opportunity to units of government throughout Kane County. If more government offices take advantage of the rates, the win-win can be a multiplied.

“We’ve reached out and given this opportunity to all the taxing districts,” he said. “It’s just one more way to best use the resources we have.”

Draft of Intergovernmental Agreement Between Kane County and St. Charles Township

Whereas Saint Charles Township desires assistance to meet short term obligations and requests to enter into an intergovernmental agreement with Kane County

Whereas Kane County has sufficient funds to assist Saint Charles Township subject to the following terms and conditions:

Kane County will provide via electronic transfer $459,000 to Saint Charles Township on or before December 1^st, 2016.

Kane County will provide via electronic transfer $166,000 to Saint Charles Township Cemetery District on or before December 1^st, 2016.

Saint Charles Township and the Saint Charles Township Cemetery District shall allow Kane County to be reimbursed from property tax collections by payment from the Kane County Collector until the funds are recovered based on the following schedule.

1. From the First Property Tax Distribution after June 1^st, 2017

• $231,000.00 Saint Charles Township
• $83,000.00 Saint Charles Township Cemetery District

2. From the First Property Tax Distribution after September 1^st, 2017

• $233,774.16 Saint Charles Township
• $85,090.98 Saint Charles Township Cemetery District

3. And any remainder due from future distributions until paid

In addition to the stated terms and conditions the $100 processing fee due the Kane County Collector shall be waived. This agreement must be approved by the respective governing boards and signed by the following officers in order to be binding.