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Schools paying off TRAN loan early

October 15, 2012
By JOSH COTTON (jcotton@timesobserver.com) , The Times Observer

The Warren County School District is about to pay off a loan.

And it might be able to save some money in the process.

In May, the district took out a $6 million tax revenue anticipation notice (TRAN) to cover expenses through the first half of the 2012-2013 fiscal year, which runs from July 1 to June 30.

A motion approved at last Monday night's meeting of the school district's board of directors "authorizes the Director of Business Services to pay back the $6M TRAN loan to Northwest Savings Bank during the month of October, 2012 pending sufficient funds are received from local tax revenues.

"Furthermore, direction is given to pay appropriate interest at that time while realizing interest savings by paying the loan off earlier than the December 31, 2012 term."

WCSD Business Director Jim Grosch said the interest payment, if paid back on Dec. 31, would be approximately $50,000.

A resolution passed at a special board meeting authorizing the TRAN earlier this year said that that district "anticipates current revenues as et uncollected...The District has inadequate funds for current expenditures (and) has determined that it is is necessary to borrow for the purpose of meeting current expenses by issuing a Note to be repair from said anticipated revenues."

The interest rate on the note was listed in the resolution as "1.65 percent per annum." Over the six-year life of the loan, the district could have expected to pay $48,500 in interest.

"If we make repayment on Oct. 19th or the 26th we will save approximately $20K ($20,000) to $18K ($18,000), respectively," Grosch said.

 
 

 

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