Schools
Racine Unified School Board Approves Annual Temporary Borrowing Packages
Every year the district has to borrow money to get them through the end of the year as they await state aid money. This year is no different.
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The Board of Education unanimously approved a resolution that authorizes two temporary borrowing packages at their business meeting Monday, Oct. 16.
The first borrowing was approved at an amount not to exceed $15.5 million. The money helps shore up the district’s finances through January 2012, when it will receive property tax levies and state aid.
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Morgan Stanley won a bid process to finance the loan at about a .336 percent net interest rate. The loan will be repaid upon receipt of those levies and state aid, said Dave Hazen, chief financial officer.
Additionally, the Board approved a $10 million renewal of an emergency line of credit with its bank, Wells Fargo. This line of credit is used when annual cash flow borrowing is not sufficient, and this year was based on timely receipt of state, local and federal funds.
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This year is different since a portion of the district’s funding will come from a federal stimulus package, and requirements for claiming the funds may delay their receipt. However, short-term cash flow borrowing should be sufficient, Hazen cautioned.
“We’re not anticipating using this line of credit at all,” Hazen said.