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Superintendent plans tax‑anticipation note to cover November cash‑flow shortfall
Summary
District leaders told the board they will bring a resolution in September to approve a tax‑anticipation note (TAN) with the district's bank to cover projected operating shortfalls before property tax receipts arrive in December and January.
Superintendent and finance staff said they will present a resolution at the September board meeting seeking approval to establish a tax‑anticipation note (TAN) with the district's depository bank to cover cash‑flow needs before property tax receipts are collected.
A staff member explained that tax revenue timing creates predictable low points in the district's cash flow, typically in November, and that a line of credit would let the district borrow what it needs during those months and immediately repay the borrowings once property tax collections arrive. "When we come around to paying our expenses in the months before we get our local property tax, we can ensure that we have the dollars to pay those expenses," the staff member said. They estimated a potential borrowing need of between $5 million and $8 million depending on whether certain federal payments arrive in September.
The staff member said interest on the TAN would be charged only on the borrowed amount and that the instrument is commonly used by districts with smaller reserve ratios to bridge timing gaps. Counsel from Gilmore Bell is preparing the draft resolution and the district plans to work with UMB Bank as the depository. Staff said they would have a more precise interest‑rate estimate and final loan figures for the September meeting; a ballpark rate of 4–5% was mentioned as an expectation.
Board members asked clarifying questions about collateral and timing. A staff member replied that the collateral for the line of credit is the district's local property tax receipts and confirmed that, in the district's view, the TAN is necessary to meet payroll and pay obligations during the lowest cash months. No formal vote occurred; staff will return with a resolution and final numbers.
The board discussed TAN timing in the context of other agenda items, including consolidation and reserve restoration, and several members said the TAN decision underscores the urgency of the district's fiscal recovery work.
