School board authorizes borrowing up to $6 million from state
Zero-interest loan will cover short-term funding deficit
At Aspen School District, some expenses for the 2021-22 fiscal year are cropping up before sufficient tax revenue rolls in to cover those costs.
A zero-interest loan from the state of Colorado will help bridge the gap; the Board of Education swiftly and unanimously authorized Tuesday morning borrowing as much as $6 million from the state to address the short-term cash flow deficit.
The approved resolution indicates that the district can repay the loan by June 25. The loan contributes to general fund expenses that can’t be covered by other, more specified sources such as the transportation, food service and bond redemption funds.
The board of education authorized a similar loan for as much as $5 million last year and the district was able to promptly repay the principal, Superintendent David Baugh said during Tuesday’s meeting.
“This is largely a formality. … Many school districts use these zero-percent loans to cover a gap in funding streams from tax collection, tax revenues,” Baugh said.
The gap exists because the district distributes its funding fairly evenly over the course of the fiscal year that begins July 1, but most property tax revenue does not come in until the spring months of March through June. That leaves a midwinter deficit in December, January and February, according to a memo attached to last year’s loan resolution.
With just the loan approval on the agenda and no contention over the matter, the school board meeting lasted all of four minutes Tuesday. Suzy Zimet, Susan Marolt, Katy Frisch and Dwayne Romero voted in favor of the resolution; Jonathan Nickell was absent.
The Aspen School District could collect an extra $1.2-1.5 million in tax dollars annually as a result of the district switching to local funding in fiscal year 2023-2024.