Dallas schools trustees have been told that the district needs a $100 million loan in order to pay all of its expenses through the next school year because the district’s reserve funds are insufficient to meet budget costs.
Larry Throm, Dallas schools executive chief financial officer, told trustees Thursday during a budget meeting that the $100 million loan will cost the district an estimated $1 million in interest.
Throm said the borrowed funds would carry the district until state money kicks in, The Dallas Morning News reported.
“If you had enough money in the fund balance that would tide you over,” Throm told trustees.
School districts usually tap their reserve funds to meet budget costs until certain revenues become available during the school year.
But the newspaper reported the school district’s reserve fund, or fund balance, is dangerously low at $30 million for a district its size.
The reserve is low because of a $30 million deficit, which school officials have tried to reduce with various measures including cutting jobs.
Throm told trustees the full effect of the cost savings efforts would kick in and no deficit would exist in next school year’s budget.
An additional $20 million is expected to be in the fund balance at the end of the next budget year from departments not spending their entire budgets.
Throm said he had found records showing the district has previously borrowed money.
“We have to change our financial practice,” said trustee Jerome Garza. He said this would prevent having to borrow money in the future.
The projected $1.245 billion general fund budget is a decrease of about $18 million from last school year’s budget.
The district also has budgeted about $2.2 million for 51.5 new positions and $1 million for continued development of “the dashboard project,” which is a computerized method for accessing various data, including up-to-date information on student performance.
Copyright 2009 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.