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Shutdown could force schools to borrow money for payroll

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News Willmar,Minnesota 56201 http://www.wctrib.com/sites/all/themes/wctrib_theme/images/social_default_image.png
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Shutdown could force schools to borrow money for payroll
Willmar Minnesota 2208 Trott Ave. SW / P.O. Box 839 56201

GROVE CITY -- Sherri Broderius has a stack of papers an inch thick on her desk that the state Attorney General was required to send government entities regarding temporary funding of core government services in the event of a government shutdown.

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Broderius, the Atwater-Cosmos-Grove City Superintendent, is a little peeved when she thinks about the clerical time, paper, printing and postage it took to send out all of those documents across the state.

And then there's the 20 additional pages of documents she received from various attorneys and organizations that "refute the original one-inch thick pile of papers."

And in the end, none of those papers answer the questions that Broderius wants to know: Will ACGC have to borrow money to make payroll, what's the interest on that money and how will all of this affect the education of students in the district?

It's questions most superintendents are likely asking now as the state marches closer to a government shutdown.

The ACGC School Board has sent letters to local legislators asking them to resolve the budget dispute and keep government running.

But they've also made a contingency plan.

Last month the board authorized the ACGC business manager, Dan Tait, to borrow up to $1.3 million to help cover pay roll and other expenses if the state doesn't come through with a $419,504 payment to ACGC on July 15 or the $766,527 payment on Aug. 15.

"That's a significant amount of money," said Broderius. "We've got to pay our bills."

Tait said Tuesday there's enough money in the bank to cover ACGC's July 15 expenses, including checks to employees and vendors, but not the Aug. 15 expenses.

He said he told the board Monday it was "time to pull the trigger." He intends to proceed with a bond sale next month whether there's a shutdown or not.

Because it takes time to receive funds after a bond sale, he's initiated the sale so the money would arrive in time for the Aug. 15 payroll.

He said he's not willing to risk ACGC's reputation or bond rating by sending someone a bad check.

It's not unusual for ACGC to borrow money to help with cash flow, but Tait said until recently school districts could actually make a little money when they invested that borrowed money. This year, schools will loose money on interest paid to lenders.

Tait said ACGC would've likely borrowed money in September, but because of the threat of a shutdown, they'll take out a loan in July and pay extra interest fees.

Depending on what the interest rates is, the cost of borrowing money could be the price of new curriculum or a teacher, said Broderius.

She's also worried that a state shutdown will mean state test scores won't be released and teachers won't have "front line" information about individual students when classes begin in September.

"Nobody's thinking about those things. They're thinking about if the state parks are going to be open," said Broderius. "I want test scores."

And she wants to know how much a state shutdown will cost her district and "how much will that take away from kids?"

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Carolyn Lange
A reporter for more than 30 years, Carolyn Lange covers county government and regional news with the West Central Tribune.
(320) 894-9750
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