By Lee Reinsch
Correspondent
DE PERE – The De Pere school district voted unanimously to renew its line of credit and issue tax- and revenue-anticipation notes to use for short-term cash-flow deficiencies over the next year.
The line of credit, from Associated Bank, is a revolving line of credit wherein the district can borrow only what it needs.
De Pere School District Finance Director Dawn Foeller said it’s not uncommon for school districts to use short-term borrowing and De Pere has done so in years past.
But cash reserves have built up in more recent years, and the district has been able to keep such borrowing for deficiencies to a minimum, Foeller said.
Last year, the school district’s cash reserves ran short in November while waiting for its second state equalization aid payment of $5.7 million.
It had to draw out $400,000 from its line of credit to cover payroll and other expenses.
Foeller said the aid payment arrived Dec. 3, the district paid back the money the same day, in the amount of $400,000.
She said these sorts of instances arise due to the timing of payments from major sources of income, such as state equalization aid payments and property taxes.
The date of the line of credit will be Nov. 1 through Oct. 31, 2020.
Foeller said the fiscal impact is yet to be determined.
The interest on draws will be the month’s LIBOR (London Interbank Offered Rate) plus 2.25 percent.
The rate won’t be less than 2.25 percent or greater than 8 percent, and interest will be calculated starting the day a draw is made.