APS preparing to borrow $5M for cash flow
ALPENA -Alpena Public Schools Board of Education is preparing to borrow more money this year for cash flow for the district, based on further deficit. Last year the district borrowed $5 million to cover cash flow before taxes were collected, and by increasing that amount for the 2014-15 school year, the district will be moved into a different category for larger borrowing.
“The estimate for borrowing is around $5.5 million to $6 million, which pushes us into a large issuer category,” Assistant Superintendent Diane Block said. “Since we will be in a larger borrowing category, we need a rating, which would cost around $8,000 to $10,000, but there is a waiver available for that.”
The district will be working on the exact number that needs to be borrowed for cashflow for the coming school year, but has established a ceiling of $5,950,000.
“I want to be as accurate as possible to avoid any issues,” Block said. “This should be the top end of our borrowing, and going forward, I expect it will level back off.”
The resolution passed by the board authorizes starting the process of soliciting bids for the borrowing amount from local financial institutions, and will start the application for the waiver.
“The borrowing we have to do is a product of how the state provides state aid,” Superintendent Brent Holcomb said. “The timing for payments is different, and this makes us have to borrow for cash flow purposes.”
The borrowing is backed by a state aid of $23.6 million, so the money will be available to pay back the over $5 million when it comes in from taxes collected.
“We’re a $35 million organization, so it’s just a cost of doing business to pay for revenue and different operating expenses,” Block said.
In other business:
* the board approved an amendment to the deficit elimination plan that will bring the numbers in the plan back to coinciding with the current budget.
* the board approved a school of choice compliance statement to be eligible for Best Practices in the 2014-15 school year.
* board memberships to the Alpena Area Chamber of Commerce, Michigan Association of School Boards and School Equity Caucus were approved at a cost of $8,708.
* a bid for plumbing and heating, along with materials was accepted from Weinkauf Plumbing and Heating Inc. for the career and technical education house being built on Wildcat Court. The bid was approved with a 4-2 vote, with Mike Barnett and Susan Bowen voting against.
* the next board meeting will be Aug. 18 at 5:30 p.m. in the Gerry Ludwig Board Room.
Nicole Grulke can be reached via email at firstname.lastname@example.org or by phone at 358-5687. Follow Nicole on Twitter @ng_alpenanews.