LINCOLN — The Lincoln School Board may need to borrow $400,000, or more, to meet district payroll in August.
Superintendent Mary Ann Spears called the situation a cash flow problem that doesn’t signal financial failure of the district.
The situation has developed because of a debt payment of about $1.4 million scheduled in July. Spears said she has been told by the district’s fiscal agent, Stephens Inc., that the date for the payment can’t be changed.
The board met Thursday to deal with the situation but with only two members present, no action could be taken to authorize Spears to secure a short-term loan.
Dax Moreton, board president, and Scott Davis, a board member, spent the time discussing cost-saving strategies, including possibly eliminating an incentive pay program for teachers and administrators.
“It’s such a good thing,” Moreton said of the incentive program that pays teachers bonuses based on student achievement test scores. “But, at the end of the day, can we cash flow it?”
Bonuses amounting to nearly $300,000 to staff for student performance during the last school year will be paid this fall, said Crystal Breshears, a master teacher in the program.
Board members Kendra Moore, Jim Ayers and Connie Meyer were absent. Three members present constitutes a quorum when business can be transacted.
The district’s payroll runs about $636,000, Spears said. The district also has about $300,000 in accounts payable due in August.
The district will receive some property tax money from Washington County Tax Collector’s office this month and next but a payment of $560,000 in state foundation aid probably won’t be received until the last week in August. Employees will be paid on Aug. 23, before the state money arrives. The district is also expecting a reimbursement payment from the federal government of about $100,000 for expenses incurred for the incentive pay program. The program is supported by a federal five-year grant.
As of Thursday’s meeting, the district had about $370,000 in the bank, she said.
Districts receive state per student aid and categorical funding in 11 monthly payments. No payments are made to districts in July.
Spears said she has talked with Simmons Bank, where the district accounts are kept, about withdrawing a certificate of deposit and possibly making a short-term loan as needed.
Board members agreed to meet on Aug. 12 at which time the district should have more information on available finances and whether a loan is still needed.