0620LOANAUDHear John Dunn, director of financial review for the state Department of Education, discuss how tax anticipatory notes help school boards with cash flow.
The Gainesville school board will convene Tuesday to consider using a tax anticipatory note to help finance the school system until it receives property tax revenues this fall.
John Dunn, director of financial review for the state Department of Education, said tax anticipatory notes are a cash flow mechanism that is a fairly common tool for school boards.
"This allows the school board to borrow money, and they’re pledging their future taxes against it," Dunn said. "Taxes normally come in all at one time at the end of the calendar year. To get to that point, sometimes they need to borrow money in the middle of summer to get them to the October-November time frame."Shirley Whitaker, assistant superintendent for Gainesville City School System, said the board would borrow the money from a bank and use it for expenditures that have already been identified in the proposed fiscal year 2009 budget, which may go into effect July 1.
"It will not increase or decrease the deficit," Whitaker said. "This money is already (represented) in the budget. We are not raising the budget or increasing the deficit. It is a cash need that anticipates taxes paying it back."
Gainesville education officials have not said how much money the bank might loan the school system or how much interest might accrue.
Dunn said the local school system needs to gain approval from the Gainesville city school board to obtain the note, and does not require approval from the state Department of Education.
Whitaker added the note will not support any new expenditures for the 2009 fiscal year.
The board meeting will be held at 5 p.m. Tuesday in the Gainesville city school system’s board room, 508 Oak St.