Connellsville Area considers $3.5M loan to meet payroll
School directors will decide Wednesday on a $3.5 million loan package needed to meet the July payroll at Connellsville Area School District.
For the first time in 10 years, administrators are expecting to fall short of meeting the $1.3 million biweekly payroll. A series of deficit budgets have left only $1.7 million in the bank.
Business Manager Eugene Cunningham first asked the school board in May to consider a tax anticipation note. The district does not receive property tax revenue until August.
"Over the last couple of years, we've been beating up our fund balance," he said.
Connellsville Area last applied for a tax anticipation loan during the 1996-97 school year. That loan was for $3 million.
"When the fund balance is so low, (a loan) provides safe haven for us," Cunningham said.
Cunningham said proposals are due Wednesday afternoon. The least costly plan will be acted upon, and he is expecting about five of the 12 lenders queried by the district to respond.
"That'll give us some competitive rates," he said.