LONGMONT — The St. Vrain Valley School District is anticipating it will need $29 million in state loans to cover expenses in the 2003-04 budget year, which begins July 1.
According to Mark Pillmore, the district’s chief financial officer, $15 million of the loan will be paid off at the end of March as most of the district’s revenue from property taxes comes in. By June 2004, the district is planning to be debt-free.
The $29 million would be the most the district has ever asked for. The district requested and received about $27 million during the 2002-03 budget year — $11 million of which came in December as the district secured loans to make payroll and pay other district bills. The district still owes the state $5.08 million this year.
On Monday morning, in a specially called meeting, the board agreed to allow the district to pursue the $29 million in loans.
“We are just fine with that amount,” school board President Kathy Hall said after the Monday meeting. “I don’t think any board members were surprised.”
State Treasurer Mike Coffman said Monday he will now take a look at the cash-flow and borrowing projections from St. Vrain.
“We haven’t approved it yet,” he said. “I don’t anticipate not giving St. Vrain what they have asked for.”
According to a new state law, school districts had to submit projected loan amounts to the treasurer by Monday afternoon.
One of the main reasons the district is requesting the amount is because of the shortfall it is experiencing in the current budget year.
In the past, the district was expending 95 percent of total revenues per budget year, Hall said. Now, the district is expending 98 to 99 percent.
“Just that 2 to 3 percent difference makes a difference,” she said. “Some people are thinking the coming year will be the back-to-normal year, but it’s not. We are still in a tight situation.”
At the end of the coming budget year, or June 30, 2004, the district is anticipating an ending balance of $0 for each of its 14 funds.
From 1998-99 through the 2000-01 school year, the district used the loan program on two occasions. Those loans — one taken in January and another in February — were used to help pay expenses before tens of millions in property tax revenue began to arrive in the spring. This is the intent of the state’s program.
The most the district had borrowed was $8.8 million.
In 2001-02, the district’s borrowing from the state skyrocketed to $20 million in six installments, this time beginning in September — four months earlier in the fiscal year than the district had ever before needed state money.
Since the district’s financial problems became public, some board members have said they did not know that the district was borrowing that much money from the state.
In light of the state’s own dwindling budget and the borrowing practices of St. Vrain, the Legislature this year changed the state’s school district loan program.
First, any state borrowing must be approved by the school board. In the past, district officials could ask for state loans without board approval.
Also, under the new law, districts wishing to participate in the loan program will have to develop borrowing plans and future cash-flow projections at the beginning of the fiscal year. The combined plans will be used as the basis for the sale of tax-anticipation notes used to fund the program.
Districts borrowing more than anticipated — or that do not repay the state on time — will have to make up for miscalculations by paying interest costs.