File this under things that require more discussion.
Charles Stadlander, a candidate for the District 8 at-large seat on the Atlanta Board of Education, called this afternoon to spread word of an interesting entry on the agenda for the Tuesday meeting of the Atlanta city Board of Education.
The Atlanta Public Schools board intends to borrow up to $100 million against anticipated tax revenue expected to roll in the next few months. From the resolution:
WHEREAS, the Governing Body, after an independent investigation of the present and future needs of the School System, has determined that the School System should obtain a temporary loan in the aggregate principal amount of $100,000,000 for the purpose of providing moneys to pay current expenses to be incurred by the School System during calendar year 2017; and
WHEREAS, the most feasible method of obtaining this temporary loan is by the issuance and sale of the School System’s tax anticipation notes for such purpose…
This isn’t unheard of, but it speaks to a cash-flow situation that we weren’t aware of. Stadlander says the situation is a surprise. But Meria Carstarphen, the APS superintendent, said the “awful situation” has been publicly discussed for several weeks, and is the result of tax collection delays from both Fulton and DeKalb counties. Writes Carstarphen:
“It’s not APS’ fault that for the second year in a row Fulton Co. has delayed the tax digest and we still have to make payroll so we have to take out a tax anticipation note until taxes are collected. (Even Fulton Co. took out a TAN to cover the delay of tax collections for the county.)
“This action been vetted for months. That candidate you highlighted … and does not know the details of the work we have done to close the budget gap related to the tax assessment freeze.”
Pat St. Claire, spokesperson for APS, has sent this statement from Lisa Bracken, chief financial officer for the school system:
“[B]ecause of the assessment freeze and the time it took for the Fulton county assessors’ office to recalculate and resend new notices, we are more than two months behind our typical millage rate process. As September represents a low point in cash flows for most public school districts, this delay required that we seek a tax anticipation note in order to meet expenditure requirements until taxes are received. We anticipate borrowing no more than $100 million.”
We’re told that APS was in the same situation last year, and ended up borrowing $75 million, at a cost of $147,000 or so. Any money from the new loan would have to be paid back by Dec. 31, 2017.