Wabash City Schools OK tax anticipation loan

By Amanda Redman

Wabash City Schools will borrow against future taxes to meet cash flow needs for the first time in a decade while taking steps to reduce costs, the school board decided during a March 7 meeting.
The school board approved a resolution to take up to $880,000 in advance of the next two tax draws through a Tax Anticipation Warrant.
Inflation, excess expenses and tax cap losses have contributed to the need to apply for the advance through Indiana Bond Bank, Dr. Amy K. Sivley, superintendent, said after the meeting.
“There are a myriad of contributing factors that led us to applying for the Tax Anticipation Warrant,” Sivley said.
Tax Anticipation Warrants are loans against future tax collections commonly used by schools, local and other branches of government to offset disparity between receipt of tax revenue and ongoing expenses, Sivley told the board.
The advance will be paid back in June and December tax draws, said Matt Stone, business manager.
“We will pay half back in June and the other half in December,” Stone said. “The notice in the paper said $1.9 million but that is the entire levy of our operations and of course, we don’t get all that because of tax cap. In the paper, it has to say the max of those things in that notice so if you saw the notice, that’s why.”
The advertised notice also allowed for an interest rate not to exceed 8 percent but the actual interest rate is 3.2 percent, Stone said, adding that the actual amount advanced will be between $880,000 and $900,000.
“Inflation, excess expenses related to the Ivy Tech Building and tax cap losses are the three largest factors,” Sivley said.
To reduce excess expenses, the board voted to sell the Ivy Tech building at a meeting Feb. 20.
Establishing a four-day work week this summer should help reduce utility costs, Sivley said.
“To my knowledge, this is the first year Wabash City Schools will move to a four-day week in the summer, Sivley said. “By shutting down all buildings on Friday, we believe we will see reduced costs in utilities.  After the summer, we will compare utility expenses for Summer 2022 to Summer 2023 to determine whether or not it was beneficial to the district.”
Summer hours will be 7 a.m. to 5 p.m. Monday through Thursday, closed on Fridays.
“This move allows us to shut down all of our buildings, including central office, every Friday, Saturday and Sunday,” Sivley said. “Doing so will result in cost savings on our utilities they tend to increase during the hot summer months.”

Posted on 2023 Mar 14