Mehlville School District may seek $2.75 million in loans to meet payroll
The Mehlville School District may have to borrow $2.75 million to cover November payroll and operating expenses.
Mehlville officials are waiting for a payment from the state that includes the district's share of property taxes, which accounts for 80 percent of the district's revenue. The district does not have enough cash in its operating funds to meet payroll and operating expenses until the tax revenue arrives.
The district ended fiscal 2003 with an operating fund balance of roughly $6 million, or 7.87 percent, while the average operating fund balance for other St. Louis County school districts is more than 20 percent, according to Mehlville officials.
"We will experience a shortfall in funds again in November," said Randy Charles, assistant superintendent of finance and the district's chief financial officer.
Administrators were scheduled to ask Board of Education members Monday night — after the Call went to press — to permit Charles to execute a $500,000 loan with Midwest BankCentre on Nov. 6 — the day funds from an advance funding program issued Oct. 9 will be depleted.
The Missouri Health and Educational Facilities Authority enables school districts to borrow money from the state for cash-flow purposes until taxes become available.
Administrators predict, however, the district will use the $7.5 million MOHEFA paid to the district by the beginning of November, so Midwest BankCentre will, if approved, issue tax anticipation notes for $500,000 with a 4.5 percent interest rate amounting to $2,219.
To Charles' knowledge, this is the first time the district has had to apply for tax anticipation notes after MOHEFA funds were depleted.
But officials expect to need even more money by Nov. 20 if the district has not received enough tax revenue payments from the state, which should not happen until late November.
Administrators also plan to ask board members to give permission, if needed, to apply for another $2.25 million loan with Midwest BankCentre on Nov. 20 with a similar interest rate amounting to $6,103.
"Ideally, we would get our November tax payment before we would have to issue another note on Nov. 20," he said. "That would be ideal, but you can't count on that."
In September, board members met in a special session to authorize Charles to seek a $3 million loan in tax anticipation notes with Midwest BankCentre while it waited for MOHEFA funds to become available.
The district paid $5,891.12 in interest on those notes.
In other business Monday night, board members were scheduled to hear from Oversight Committee Chairman Chuck Van Gronigen before they consider the Oakville Middle School construction plan that, if approved, is $172,185 over its $2.58 million construction budget. Work yet to be completed at Oakville Middle includes the installation of an air conditioning system and energy efficient windows.
Unexpected asbestos removal this summer caused workers to rip out and replace floor and ceiling tile, disconnecting the building's fire alarm system. The system was replaced with a new $99,000 system — just one of the reasons the project will go over budget if the air conditioning is approved.
At the committee's Oct. 22 meeting, all committee members voted to recommend the project, but Van Gronigen and member Mike Levine voted with reservations because the air conditioning will take the project over budget.
In other Proposition P-related business, board members and administrators will evaluate skeleton calendars for the 2004-2005 and 2005-2006 school years earlier than planned to help McCarthy Construct-ion, Prop P construction manager, develop a timeframe for the summer, Ricker said.
These tentative calendars will include start and finish dates and also holiday dates that include spring and winter breaks. Grading periods, staff development days and other dates will be set later this year.
"It was agreed upon early with the (Mehlville National Education) Association to try to, in the '04-'05 school year, start school early so that the semester ended at winter break," the superintendent said.
"But because of the scrunched timeframe, it would cause us to pay a premium on construction ... We don't want to do that ... we're going to report to the board that we want to look at a late start again in '04, but then agree that we can do the early start in '05,'' he added.
Also, the Early Childhood Task Force has been putting together a vision or program plan that tackles present and future early childhood programming for the Mehlville School District.
Members of the task force are scheduled to report this plan to the board Monday night.
Ricker said they will not specifically discuss square footage of the new childhood development center that will be rebuilt on Will Avenue, replacing the old St. John Elementary School building.
This report, however, should help the Dickinson Hussman Architects design team examine the site's programming needs and then allocate space and facilities accordingly, Ricker said.
The early childhood development center will be the final Proposition P project. The building is set for construction in summer 2004.