The amount of money that three local school districts and the village of Riverside can expect to recover from what turned out to be a fraudulent investment by a fund the governmental bodies invested in continues to drop.

Last month the Illinois Metropolitan Investment Fund (IMET) estimated that it will eventually recover 47.6 percent of the funds it invested in a repurchase agreement that turned out to be fraudulent. 

That figure is just an estimate and the final recovery could be more or less, IMET said in a letter sent last month to its investors. IMET, which lost more than $50 million in the fraudulent investment, is hoping to recover money from insurance and third parties as well as through sales of assets seized from the Florida man accused of perpetrating the fraud. 

Last year IMET estimated that it would eventually recover 53.5 percent of its loss.

“The values of many of the assets in the overall receivership estate and other potential recoveries by the overall receiver are difficult to estimate with precision and many factors may increase or decrease the amount realized for these assets,” the IMET letter stated.

Riverside-Brookfield High School District 208, Riverside Elementary School District 96, Brookfield-LaGrange Park Elementary School District 95 and Komarek School District 94 are all facing losses. The Proviso Township Trustees of Schools Office, known as the TTO, which by law manages cash and invests money for those school districts, invested in an IMET fund which was supposed to be a safe, short-term money market fund. The village of Riverside also invested in the IMET fund.

District 96 faces the largest potential loss. Its share of the Proviso TTO investment in the IMET fund is about $250,000, so the loss it is facing is now estimated to be about $130,000. 

David Sellers, the school district’s interim finance director, said that the loss, whatever it turns out to be, will be something the district will just have to deal with. 

“The magnitude of this loss is comparable to lost revenue that we experience from property tax refund activity … in that it is completely unforeseeable and something the school district is just going to have to react to,” Sellers said. “Our exposure remains about $130,000. To put this in context we lost $1.466 million from property tax refunds in school years 2011-12.”

Many Chicago area towns, school districts and park districts had money invested in the affected IMET fund. IMET is a local government investment pool that invests money for local governments. 

IMET lost about $50 million, which is less than 3 percent of its portfolio. The Proviso TTO’s share of that loss was just over $2 million.

Last year the chief financial officer of the Proviso TTO told the District 208 school board that he expected that the TTO would eventually be made whole and that districts would not lose any money.

Sellers said that District 96 has not yet written off any of its money invested in IMET through the TTO, because the extent of the eventual loss has not yet been determined.

But auditors for District 208 and District 94 have taken a different approach and have already written off some of their investment. Last year, District 208 wrote off $61,877, about 47 percent of its share of its investment. Komarek’s auditors, perhaps in an abundance of caution, recently wrote off $25,619 or about 80 percent of its exposure.

“There is something that’s going to have to be cut to make up for this $25,000,” Komarek District 94 Coordinator of Business Services Kathleen Gibson said. “I’m not sure what it is going to be yet.”

However, Sellers said the final loss to District 96, whatever it turns out to be, would likely not affect the district operationally.

“From a financial perspective, I don’t see it as even potentially impacting our ability to operate,” Sellers said. “Cash reserves that school districts have are there for a purpose, and one of the purposes is to make adjustments when an uncontrollable loss of revenue or disruption of revenue sources might occur.”

The village of Riverside had a little over $16,000 invested in the IMET fund that purchased the fraudulent repurchase agreement. It has written off $7,695.60 so far.

Riverside still has about $4.3 million invested with IMET, the bulk of it in a different fund.  Riverside Finance Director Marco Salinas says that after falling victim to the fraud, IMET checked all of its other investments to make sure that they are all safe and sound.

“We don’t have any concerns,” Salinas said.