Board authorizes up to $10.175 million in short-term notes to ease cash-flow squeeze

The Bellevue Board of Education voted to authorize general-fund short-term notes not to exceed $10,175,000 to address a district cash-flow shortfall caused by the timing of state and federal revenue.

During the meeting, a district official explained that the board had used $5,000,000 of an existing line of credit in November and later borrowed an additional $3,000,000 for payroll, leaving the district with intermittent shortfalls before tax receipts arrive in April and August. The district operates on a roughly $137,000,000 annual budget and begins the year with approximately $20,000,000 in reserves but said internal liquidity was insufficient to cover timing gaps.

An external advisor, Cody Whitfield (introduced as from Dave Davidson), presented tax-anticipation notes as an alternative. Whitfield said notes sold in the open market would likely be in the low-3% range versus the roughly 5.5% bank line. "Basically, what you would do is authorize $10,000,000 of tax anticipation notes. You would take those dollars and pay off your line of credit," Whitfield said, adding his quick analysis showed net interest-cost savings of about $260,144 over the term if market conditions permitted.

Board members asked about risks and flexibility. Whitfield said the proposed notes would be interest-only with a balloon maturity (modeled to mature in September 2027) and that the plan included a one-year call feature permitting prepayment after one year; he also noted issuance costs such as rating fees and underwriting expenses. "If the interest rate were to jump and it didn't make sense, if your line of credit was the better way to go, then we just wouldn't do them," he said.

After discussion, a board member moved and the board voted to authorize a resolution to issue the notes (general-fund 'commissary' notes, Series 2026) with authority delegated to district officials to determine final principal amounts, maturities, rates, redemption provisions, tax status, and post-issuance compliance and disclosure. Roll call recorded affirmative votes from members present and the motion carried.

The immediate practical effect is an authorization: the board empowered district officials to sell short-term tax-anticipation notes if market conditions and final terms prove advantageous. The board also heard that funds freed by retiring higher-cost bank debt could be reinvested in the district in the near term if the arbitrage is favorable.

Next steps: administration and advisors will complete the paperwork, obtain a short-term rating, and seek market pricing; the presenter said the team hoped to close and wire proceeds by late January of the financing timetable discussed at the meeting.

Votes at a glance: resolution to authorize notes (not to exceed $10,175,000) — Passed (unanimous among members recorded as present).