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Fridley board authorizes up to $23 million borrowing to cover near‑term cash shortfall
Summary
Facing timing gaps in state and federal reimbursements and rising transportation costs, the Fridley Public Schools board unanimously approved a resolution to authorize up to $23,000,000 in aid‑anticipation certificates to maintain operations through anticipated state‑aid receipts.
Fridley Public Schools’ board unanimously voted to authorize a borrowing resolution that will allow the district to issue aid‑anticipation certificates to cover short‑term cash‑flow shortages.
Superintendent Doctor Lewis told the board the district faces “significant cash flow challenges” driven primarily by timing differences between when the district pays expenses and when state and federal revenues arrive. She identified an approximately $11.5 million debt‑service payment due in September 2026 and said, “based on current cash flow projections, the district does not anticipate having sufficient cash on hand to comfortably meet both its ongoing operating obligations and the scheduled debt service payment.” The administration recommended authorizing up to $23,000,000 in borrowing to bridge operating needs until state aid is received.
Financial advisor Matthew Hammer of Eller’s explained the mechanics and timeline for the issuance: the district plans due diligence and a preliminary official statement in late July, target distribution of the offering by early August, and an award date around Aug. 18 with a prospective closing on Sept. 3. Hammer noted the district’s recent Moody’s rating action, which downgraded Fridley’s rating to B1 and will likely increase market costs; he also said the district plans to pursue the state credit enhancement program to obtain a credit‑enhanced rating and insurance for the certificates. “What an anticipation certificate is is we’re securing that borrowing with future state aid,” Hammer said.
The motion was made by Miss Anna, seconded by Miss Schreiner, and passed on a roll‑call vote with all six members voting aye. The board authorized designated officials — the superintendent, a senior officer, and one board member — to finalize the award and close the transaction under the resolution’s terms. The board will proceed with due diligence and work with DA Davidson as the underwriter and with the district’s bond counsel on required documents.
