The Shawano School Board gave its approval earlier this week for district officials to work with Premier Community Bank to establish a $1.5 million revolving line of credit.
The line of credit is in place, according to business manager Gail Moesch, to cover the district’s expenses for when bills are due but property taxes and state aid have not been received. The district did not establish a line of credit for the 2012-13 school year; one was established in 2011-12 but never needed to be used, Moesch said.
The line of credit is more likely to be needed this year because the district just finished a $900,000 expansion of Shawano Community High School’s technology education and agriculture departments, Moesch said.
“We’ve been making those payments (on the expansion), but we usually don’t get state aid until the first week of December,” she said. “We need to make sure we cover all of that.”
The line of credit is there if the money is needed for the short term, and once the district gets tax levy dollars or state aid payments, the money used is paid back to the bank, Moesch said.
“We only pay interest for the time that we owe the money,” she said. “Our income and our expenses usually don’t jibe.”
The interest rate on the line of credit is 0.79 percent, Moesch said. Two years ago, the interest was at 0.83 percent.
Board member Derek Johnson expressed concern that the line of credit was tantamount to borrowing a full $1.5 million, even if the full amount is not needed.
“It sounds like the board is saying we have to borrow $1.5 million,” Johnson said.
The line of credit is good through Nov. 1, 2014.
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