Beaver Dam school board authorizes up to $5 million line of credit for cash-flow management

The Beaver Dam Unified School District Board of Education voted to authorize a taxable tax- and revenue-anticipation promissory note (a line of credit) in an amount not to exceed $5,000,000 to provide cash-flow flexibility during the district’s low-cash months, administration told the board.

An administrator (S11) said the district typically faces its lowest cash balances between Thanksgiving and December and described previous years’ borrowing; the district carried a $5 million line in recent years and drew on lines in earlier fiscal years. For the current fiscal year the administrator recommended continuing a $5 million line of credit.

Two banks responded to a request for proposals. S11 said National Exchange Bank proposed a fixed 5.95% rate with no fees; Horicon State Bank offered a lower advertised rate contingent upon the district bringing core deposits to the bank and included a floor of 5.0%. S11 said the district’s operating fund currently earns about 4.49% interest and that the board favored keeping primary deposits at National Exchange Bank to preserve liquidity and ease transfers.

A board member moved to approve the resolution authorizing the taxable tax- and revenue-anticipation promissory note up to $5,000,000; the motion was seconded and approved by roll-call vote. S11 told members staff will monitor cash flow and “likely do a grant claim sometime in early November to ensure that we have that extra cash around Thanksgiving,” and that the board will revisit the need in the next fiscal year.

The authorization does not mean the district will necessarily borrow the full amount; it establishes the legal ability to do short-term borrowing as needed to meet obligations.