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Board discusses state aid note to smooth September cash flow; formal recommendation to come
Summary
The finance director asked the board to consider authorizing a state aid note to cover expected September timing gaps in state aid payments; she said a formal recommendation with dollar amounts will be presented at the next meeting.
Board members discussed whether to again use a state aid note to cover a recurring September cash shortfall in state aid payments.
Finance Director Mickey Borie outlined the district’s experience with state aid notes in recent years and said the district may seek a similar short-term borrowing instrument for the upcoming school year to ensure payroll and other expenses are covered during the month when state aid is not received. She said the district borrowed about $1.9 million last year and typically repays the note within the same fiscal year; she expects to present a specific recommendation and final numbers at the next board meeting. "We want to make sure that we can make our payroll and all subsequent bills," Borie said.
Board members asked about rough magnitude, past interest costs and alternatives such as a line of credit. Borie said the district uses pooled borrowing with other districts to obtain competitive rates and that details on rates and final amounts will be provided when the formal recommendation is presented. No motion was taken at the meeting; the board asked staff to return with the formal proposal and numbers for consideration.
