SJSD board approves short-term borrowing while targeting 14% reserves

ST. JOSEPH, Mo. (KQTV) — The St. Joseph Board of Education met Monday and unanimously approved a tax anticipation note resolution, authorizing the district to borrow up to $8 million to cover expenses this fall.

The loan is intended to cover the district’s expenses during October and November, before the district receives a significant portion of its local property tax revenue in December and January.

Local revenue makes up about 55% of the district’s total revenue. The district invests those funds to earn interest and then draws the money as needed to cover monthly expenses.

During the meeting, board member Mike Moore asked about the interest costs associated with the loan. District officials said they expect interest expense on this year’s note to be less than $80,000.

Board member Cassandra Veale said the district expects to continue using this type of short-term borrowing until its reserves reach 14%.

Board policy ultimately calls for reserves equal to 20% of expenditures; about 14% has been discussed as an intermediate goal that could provide enough cash on hand to end reliance on the annual note.

Board Vice President Jacob McMillian said he would encourage the district to include the 14% reserve goal in its Continuous School Improvement Plan, or CSIP.

The proposed goal would be to build the district’s reserves to 14% so it can eventually eliminate the need for the short-term loans used to cover expenses before property tax revenue is received.

The post SJSD board approves short-term borrowing while targeting 14% reserves appeared first on KQ2 | St. Joseph, Missouri News, Weather & Sports.