EDUCATION: CAPE DISTRICT COPING WITH TIGHT FINANCES

The Cape Girardeau School District will squeak through its roughest financial period of the year with the help of reduced spending and a line of credit from a local bank on this year's tax revenue.

The district's fund balances are dangerously low and could attract the state's attention if there are high, unexpected expenses, district Business Manager Rob Huff told the Board of Education Monday.

However, he said the district should make it through the end of the year if school officials spend wisely.

"We're trying to make sure people get paid, but otherwise, we're really tightening our belts and only spending money for things that will significantly impact kids' education," Huff said. "I'm checking every purchase order and requisition as it comes in."

The school district gets the bulk of its funding from local property taxes and traditionally has little incoming revenue the last three months of the year.

Huff said the district should receive about $400,000 today in property tax revenue from the county, but the bulk of the tax money won't be received for another four weeks or more.

This year, increased bills due to monthly payments for construction costs have drawn the district's fund balances down, prompting the Board of Education to take out a $2.5 million tax anticipation note to help cover bills.

The note, established with Bank of America, is essentially a line of credit school officials can use as needed over 90 days. That allows the district time to receive most of this year's local tax revenue, which is then used to repay the loan at 5.4 percent interest.

Added to the district's concerns is the delay of a $1 million allocation from the state to cover costs to complete construction of the Cape Gir-ardeau Career and Technology Center. The funding has been postponed until at least January, when an appeal on a lawsuit regarding taxpayer refunds is settled.

Board of Education President Dr. Ferrell Ervin said the district's financial problems are a cause for concern, but not panic. Although the school board could seek passage of an operating tax levy increase as early as April to bolster sagging fund balances, Ervin said he doesn't anticipate that happening.