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Board approves $7 million tax-anticipation line of credit to cover fall cash shortfall
Summary
Facing a change in municipal payment timing and an estimated mid-to-high $6 million shortfall before December, the board approved a $7 million tax-anticipation line of credit for FY27 to ensure cash flow; administration said the district typically draws only what it needs and pays interest on amounts used.
The Addison Central School District board voted June 22 to authorize a $7 million tax-anticipation line of credit for the 2026–27 fiscal year to manage cash flow until property-tax receipts arrive in December.
Administration explained the change in the Middlebury payment schedule — from three installments to two — reduced interim revenue pacing and created an estimated shortfall in the mid- to high-six‑million-dollar range before the December distribution. National Bank recommended a $7 million line to cover a worst-case scenario; administration noted the district typically borrows only the amounts needed and pays interest on the drawn balance.
Jason Chance explained the borrowing practice: the district models anticipated cash flow to determine borrowing needs and typically repays in full once revenues arrive. In board discussion members asked about prior-year draws, interest costs and whether increasing the line increases how much the district will borrow; administrators said the larger line is a precautionary maximum and emphasized prudent drawdown practices.
After discussion a motion to approve a $7 million operative line of credit, due June 30, 2027, at an interest rate shown in the board materials, carried on a voice vote. The board chair noted signature requirements and that treasurer/administration will complete the paperwork.
