FERGUSON — The Ferguson-Florissant School District will borrow up to $9.5 million this fall to alleviate what school officials call an urgent need amid “cash flow difficulties.”
The district’s budget is estimated to have a $6.9 million shortfall, Chief Financial Officer Lavon Singleton said at the district’s school board meeting, held Wednesday night at McCluer South-Berkeley High.
District leaders say they are still trying to ascertain the exact cause, but Superintendent Joseph Davis said last week it related to staffing and the end of pandemic relief funds.
“Let me clearly say, there was no mismanagement of anything,” Davis said.
Davis initially said he intended to ask the board to approve a hiring and spending freeze on Wednesday. There was no discussion of such action.
People are also reading…
Board members instead approved a resolution to borrow up to $9.5 million in tax anticipation notes — a short-term loan used by school districts when they need to spend more money than they have before receiving tax revenues.
The loan would sustain the district until it receives property tax revenues in December.
Davis said he did not anticipate the district would need to borrow the full amount approved by the board “but the funds will be there if the full amount is needed.”
The district started the latest fiscal year with an anticipated fund balance of $32.7 million. But an annual, state-required financial report of the district earlier this fall found the district’s ending fund balance was actually $24.8 million.
Ultimately, Singleton told the board the district has been spending far more than it’s been bringing in. Its bank accounts went from $26 million in July to $5 million as of Oct. 16.
“I think we’ll be OK in the long run, but to make sure we keep pace, it’s necessary that the board do some short-term borrowing,” Singleton said.
Davis said the district is performing an internal audit and he’d present the results in December.
“We’re going to have to tighten our belts from here on out,” Davis said.