Cedar Rapids school board members table short-term borrowing idea

Cedar Rapids school board members tabled a resolution to participate in the Iowa Association of School Board's ISCAP taxable line of credit.

District officials researched several short-term borrowing options to pay its bills until property and state tax payments flow into its general budget in the fall.

In the past, the district covered expenses from August to October with its reserve funds, but those reserves are still recovering from the state-mandated 10 percent across-the-board budget cut in the fall of 2009.

Board members authorized the issuance of taxable warrants in an amount not to exceed $12 million in July 2010 to help at the beginning of the 2010-11 school year and needs to do so for the 2011-12 school year, too.

Steve Graham, the district's executive director of business services, presented three short-term borrowing proposals to school board members Monday.

The ISCAP program had the lowest interest amount of about $68,000 for a credit of $21 million.

“We won't use this authority unless we need it,” Superintendent Dave Benson said.

The other proposals, both the issuance of taxable warrants, had interest amounts of $80,000 and about $108,000. Both interest payments assume the district borrows $19 million.

The district has never participated in the Iowa Association of School Board's ISCAP program. The district would have to be a member of the association to participate.

Board members expressed concern of the program. Graham said he didn't want board members to be uncomfortable with their decision and suggested the resolution be tabled until the June 13 board meeting so more information could be gathered.