By Kevin Boneske
Staff Writer
ASHWAUBENON – To ensure the district has enough funds available to pay its bills before receiving reimbursements and revenues, the school board voted Wednesday, Dec. 11, to increase its line of credit by $2 million to $9 million.
Keith Lucius, the district’s business director, said the line of credit was increased from the amount the board approved in July because $7 million may not be enough to cover cash needs for this school year after self-funded health insurance costs came in higher than planned last year and the district’s fund balance decreased.
“You can’t always time out when these expenditures are going to happen,” Lucius said. “On our normal budget, I have a pretty good idea how much we’re going spend from month to month, and I can project that out… With health insurance, what happens when you have a large-dollar claim, hospitals tend to bundle it all together and they may even sit on it for a little while and work with the insurance company for discounts and all those things, and then it all hits at once.”
Though the district will be reimbursed for a large health claim with stop-loss insurance, until that happens Lucius said paying the claim will “put a dent in our cash reserves.”
“If I were going to bet, I don’t think we’ll go above the $7 million, but without knowing what’s going to happen on that self-funded plan, I want to make sure we had protections, so that we can make our payrolls in January, February and June is another month where we tend to hit cash-low periods…,” he said.
Lucius said the district’s interest rate at prime with a floor of 5.25 percent isn’t changing, and no commitment fee is being charged on the line of credit.
“Everything’s the same,” he said. “We pay a fee for the legal documents, and there’s a re-documenting fee through the bank that is $250.
As soon as the district would be receiving money, Lucius said the line of credit would be paid down.
“Because our expenditures start so early in the (school) year, and we don’t get the majority of our revenue until the second half of the year – in fact, next June is when we get the majority of our revenue – the fund balance, cash reserves are used up, and we need to use this line of credit,” he said.
Crisis plan
In other action, the board approved the district’s crisis plan as required annually by state law.
Board members heard from Tammy Nicholson, director of pupil services, and Brian Carter, Parkview Middle School associate principal, who discussed updated areas of the district’s crisis manual that include a self-harm protocol and a threat assessment protocol.