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Parkrose CFO says reserves have plunged; board to consider short‑term tax anticipation note
Summary
CFO told the March 9 board that the district's ending fund balance fell to about $310,000 from over $5 million last year, driven by a roughly $2 million increase in special‑education costs; she proposed pursuing a tax anticipation note to cover September–October cash‑flow shortfalls and will return with a resolution in April; the board approved a minor supplemental budget revision and contract renewals.
At the March 9 Parkrose School District board meeting the district’s finance team warned of a sharply reduced ending fund balance and laid out a timetable to seek short‑term borrowing if needed to meet fall payroll and obligations.
Ser Lewis, speaking as the CFO, said the district’s best estimate of the ending general‑fund balance is about $310,000 — down from more than $5 million the year before — and attributed much of the swing to an unexpected increase of roughly $2 million in special‑education costs that state funding has not covered. "We're kind of in a little bit of trouble," the CFO told the board, and said she has set aside a TAN (tax anticipation note) fund in past budgets for such a contingency.
The CFO described how a TAN would work: lenders typically allow up to 5% of prior‑year expenses (the district’s prior expenditures were cited at roughly $42 million), which would yield an estimated TAN capacity of about $2 million, with the possibility of $2–3 million depending on projected September/October shortfalls. She estimated legal and processing fees in the $60,000–$70,000 range and said any TAN is a 12‑month instrument repaid when property‑tax revenues arrive in November–December.
Board members pressed on restricted‑fund constraints (debt, capital and federal grants are not available to cover operations), the district’s cash‑management choices, and a recent two‑step downgrade by Moody’s tied to the reserve decline. Superintendent Michael said the shortfall is not likely to disappear without additional cuts or revenue changes and that staff will return in April with an estimate from Piper Jaffrey and a proposed resolution.
The board approved a minor revision to a supplemental budget resolution by voice vote during the meeting and later approved contract extensions and renewals. The TAN itself was not approved; the CFO said she will bring a formal resolution in April after Piper Jaffrey prepares an estimate and counsel prepares documents.
Board members and staff discussed possible next steps, noting that absent changes in funding or deeper cuts the district projects multi‑hundred‑thousand to multi‑million‑dollar reductions may be necessary for the next year. The CFO and superintendent said they will continue working with legislators and coalitions to highlight flaws in the state funding formula that have contributed to the district’s strained finances.
