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PFM tells Iowa City schools board cash flow improved; recommends delaying insurance repayment and using internal loan to cover SAVE payment
Summary
PFM municipal advisor Susanne Gerlach told the Iowa City Community School District board that reconciliations and unexpected revenue reduced near-term borrowing needs and recommended delaying repayment of the insurance interfund loan until after June 30 while making an internal $7.32 million transfer to SAVE to cover a June 1 payment; the board asked for a May 12 follow-up with updated projections.
Susanne Gerlach, a municipal advisor from PFM, told the Iowa City Community School District Board of Directors on April 28 that updated reconciliations and higher-than-expected receipts have narrowed the district's near-term cash shortfall and created a path that could avoid large external borrowing this fiscal year.
Gerlach said staff completed more detailed reconciliations and that PFM's April 1 'worst-case' projection had shifted after new information. "There is a solution on the table where there would be no warrants needed by June 30th," she said, describing a net positive variance in FY'26 performance that increased confidence in the general fund cash balance.
The immediate deadline is a June 1 principal-and-interest payment tied to SAVE. Gerlach presented two options: Option 1 would fund a $7.32 million interfund loan from the general fund to SAVE to meet the June payment and delay repaying a separate insurance interfund loan…
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