CONYERS - As a result of the down economy, Rockdale County Public Schools is making a move that it hasn't made in about seven years.
Superintendent Dr. Sam King asked the Board of Education Thursday during its monthly work session to approve the authorization of a $6 million tax anticipation note, or TAN.
"Rockdale County Public Schools require a TAN to cover the current expenses of the school system," King said in his recommendation. "We have estimated the cash flows for the system and determined that a temporary loan of $6 million is required."
Lee Davis, chief financial officer at RCPS, said the school
system will be operating negatively by sometime in October based on calculations if this action isn't taken.
Davis said RCPS, which prides itself on being a debt-free school system, doesn't feel good about borrowing money, but it's necessary.
A TAN is a short-term loan borrowed in anticipation of collecting taxes in the future. If the recommendation is approved, the school system will close on the loan Sept. 24, and it will mature on Dec. 31, after the system expects to collect the tax bills in early December. RCPS plans to pay back the funds through its interest earned account; Davis said it may be possible to pay it back earlier than Dec. 31 but not by much time.
The loan is expected to be borrowed from SunTrust bank at a fixed rate of 2 percent; RCPS solicited bids from eight banks and received the best rate from SunTrust, one of three banks to respond. Davis said the system won't have to pay any legal fees or closing costs, so the only financial impact to the school system is the payment of the interest from Sept. 24 to Dec. 31 - $32,333.33.
The school board will vote on the recommendation during Thursday's regular session monthly meeting, when the note from SunTrust will be available for the board to review after Davis and school board attorney Jack Lance have had a chance to review it. The meeting begins at 7 p.m. in the board room at the RCPS administrative office complex, which is located at 954 N. Main St. in Conyers.
Michelle Floyd can be reached at firstname.lastname@example.org.