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Gainesville school system pays off $7.5 million loan

POSTED: December 31, 2008 4:14 p.m.

The Gainesville school system squeaked in under the deadline Wednesday, paying back a more than $7.5 million loan due by year’s end.

Janet Allison, finance director for Gainesville schools, said although tax collections have been slow in coming this fall, the system collected enough revenue in December to pay off the $7.5 million tax anticipation note.

Allison said the system also paid off the nearly $84,000 in interest on the note.

At a November school board meeting, Allison said she was "worried" the school system might not be able to pay off the note by Dec. 31, 2008, as required by law.

Allison said a tax anticipation note is a commonly used tool that allows school boards to borrow cash for the short term to keep the school system running until anticipated tax revenues are collected.

Financial statements dated Oct. 31 stated the school system collected $14 million, including state and local revenue, since July but had expenditures totaling $17.7 million through Oct. 31, Allison said.

But that shortfall was expected, and that’s why the school board took out the loan in late June to cover the school system’s expenses this fall.

As the Dec. 22 Gainesville tax bill payment deadline drew nearer, Allison said the school system was relying on the bulk of tax collections to come in during the latter part of December to make the note payment.

Allison said during the last fiscal year, the school system collected $22.3 million in local ad valorem taxes, $10.5 million of which was collected in December.

Allison also said the school system now has enough funds to make bond payments in excess of $4.1 million due in January.



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