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Board approves $600,000 loan
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The Fennimore Community School District will borrow money to make ends meet prior to the end of the fiscal year on June 30.

District Administrator Jamie Nutter explained the need for the borrowing during a meeting of the Fennimore Community Schools Board of Education on April 28.

“We have never really had to do this in the last several years just because of the amount of cash flow we have been able to have as a result of our fund balance,” he said. “And fund balances, as you are well aware, help bridge that gap, especially when we receive 35 percent of our state aid the last week of our fiscal year.

“So in other words, we have over seven million dollars of bills throughout the year and we only get five million of the revenue until about the last week. Then we will get about two million dollars.”

Nutter foresaw the school district would fall short in its cash flow on approximately May 12.

“Basically we need to borrow money to get from May 12 to June 22, in which we will receive two million dollars and then turn around and pay that back,” Nutter told the Board.

The school district will borrow $600,000 from Livingston State Bank at an interest rate of 0.60 percent. Nutter estimates the resulting interest payment will be approximately $700.

“This is not $600,000 that we are spending on something, it is for cash flow purposes. I don’t know what that means for future years, but this year we had to fund part of this project because of the way that it fell over fiscal years,” he said. “We have gotten into a pattern also, because we make the payment for the addition. “So our payment is about $350,000 on the building over 20 years. Well, our payment is due to the bond company and we don’t tax for it until January. It keeps creating this void. So we have gotten in this cycle now.

“The only way to get out of the cycle is to tax more, so we would be looking at a big mill rate increase versus the $600 in expenses we will incur here.”

Board policy states the school district must strive to keep a 30 percent fund balance.

“I do think we have to start thinking about a plan to reinvest,” Nutter said. “This will drop us down around 20 percent. The recommendation is 17 percent. So we are still over the recommended minimum amount, but our board policy states we should strive for 30 percent. So I think we need to budget to try to slowly build that back up.

“But I still think we did a good job of following the rules of fund balance, and what fund balance is used for. Again, just like we are getting more state aid on that money, whatever we put into fund balance, we lose that the following  year. So basically for every 100,000 we stick into fund balance, the following year our mill rate would go up about $40. Vice versa, for every $100,000 that we spend, it drops about $40 or maybe even more depending on what the state aid is. It is tough, but I think we have to continue to build that. Because right now at 0.6 percent interest, it is not a big, big deal. But interest rates, hopefully, or the economy and the market, won’t always be that low. So we have to start thinking ahead a little bit. For future budgets, I think we need to think about that.”

Scanlan’s retirement approved

In other action, the Board accepted the resignation and retirement of Fennimore Middle/High School secretary Sanrda Scanlan.

“It is with great regret but with much appreciation that I submit this letter of resignation from Fennimore Community Schools effective July 29,” Scanlan wrote in a letter of resignation. “I can honestly say that I have enjoyed coming to work every day for the past 31 years. This I can attribute to great bosses and co-workers for that time and it’s a very hard thing to let go of.

“But I feel it is time for a fresh, young face at Fennimore Middle/High School and also time for me to spend more time with all my family. None of us are getting any younger!”

Scanlan’s July 29 resignation will allow her the opportunity to mentor her replacement.

“It is takes a lot to start a school year off. It takes a lot to get ready for registration. It takes a lot to close a school year out,” Nutter said. “I am very thankful she is choosing to work through July for us.”