196 Board sells tax anticipation bonds
Nathan Hansen, Rosemount Town Pages, April 5, 2012 –
$35 million sale is meant to ease cash-flow issues that could be eased soon at the Capitol
The District 196 School Board is making plans for a financial future that could change significantly depending on what happens in the next few days at the state Capitol.
The board voted Monday to approve the sale of $35 million in tax anticipation certificates meant to offset cash flow problems created by delays in state education funding. Meanwhile, Governor Mark Dayton is considering whether to sign off on legislation that would pay back at least part of that shift.
A Republican plan to repay $430 million of the state’s $2.4 billion shift has passed both the House and the Senate.
District 196 finance director Jeff Solomon estimated that repayment, if it is approved, would mean about $13 million more in the district’s bank account. But that wouldn’t cover all of the district’s expected shortfall, and Solomon said the district can’t wait around to see what the state does if it wants to get the money it needs when it needs it.
“We have to use current law,” Solomon said. “We can’t make our estimate based on what we think the legislature may or may not do.”
The district will pay .2696 percent interest on the bonds, a rate that a representative from public finance firm Ehlers called “incredibly low” when she presented it to board members Monday.
If the plan to repay schools goes forward, Solomon said the district would invest the any unneeded money. Currently the district’s investments earn an interest rate of .04 percent.
Solomon said it is unlikely the district would be able to pay back the borrowed bond funds early if the state’s repayment plan moves forward.