MONROE - The international financial meltdown hit home late last week when the Monroe School District found itself unable to secure short-term borrowing in the bond market.
The financial picture is not all gloomy, however, as the district should be able to borrow money from a local bank to cover payroll and other operational expenses until promised revenues come into the district, Business Manager Ron Olson told the school board Monday.
Monroe initially wanted to borrow about $5 million on the bond market, as it does every year. Many school districts, like Monroe, use short-term borrowing as a way to cover expenses until state and federal funding and money from property taxes are received by the district.
For instance, the district has enough money to get through October, but will need about $2 million to meet payroll in November. It will receive aid money in December, but will need to borrow again in January. Tax revenue comes into the district in January and August, but January money must also be used for debt service. June is the month with the biggest shortfall, Olson said.
Interest rates on the short-term borrowing is generally favorable enough that the district will borrow more than it needs and invest that money itself. Last year's interest rate was 3.65 percent, but it has been as low as in the high 2s, Olson said.
But this year, the district hit a snag. Olson said he had the borrowing package ready for the market Friday - the day the already severely troubled market dropped another 500 points almost immediately upon opening.
"No one bid," Olson said - a reflection of investors' uncertainty and unwillingness to lend money in recent weeks.
The district even moved the time it hit the bond market from 1 p.m. to 9:30 a.m. to try to get ahead of other school districts.
"But no one was willing to invest," Olson said.
It's been a bit disheartening for Olson to see Monroe's borrowing needs fall in the middle of one of the financial world's most troubled times.
"The budget is in the best shape it's been in years," he said. But "the bond market is just terrible."
Olson said the district could try again and seek a lesser amount for a shorter term. However, he said there's no guarantee that will work either.
Instead, he is working with Wisconsin Community Bank to secure about $2.5 million for the district at an interest rate of about 3.75 percent. The amount is enough to cover the district's needs.
The financial picture is not all gloomy, however, as the district should be able to borrow money from a local bank to cover payroll and other operational expenses until promised revenues come into the district, Business Manager Ron Olson told the school board Monday.
Monroe initially wanted to borrow about $5 million on the bond market, as it does every year. Many school districts, like Monroe, use short-term borrowing as a way to cover expenses until state and federal funding and money from property taxes are received by the district.
For instance, the district has enough money to get through October, but will need about $2 million to meet payroll in November. It will receive aid money in December, but will need to borrow again in January. Tax revenue comes into the district in January and August, but January money must also be used for debt service. June is the month with the biggest shortfall, Olson said.
Interest rates on the short-term borrowing is generally favorable enough that the district will borrow more than it needs and invest that money itself. Last year's interest rate was 3.65 percent, but it has been as low as in the high 2s, Olson said.
But this year, the district hit a snag. Olson said he had the borrowing package ready for the market Friday - the day the already severely troubled market dropped another 500 points almost immediately upon opening.
"No one bid," Olson said - a reflection of investors' uncertainty and unwillingness to lend money in recent weeks.
The district even moved the time it hit the bond market from 1 p.m. to 9:30 a.m. to try to get ahead of other school districts.
"But no one was willing to invest," Olson said.
It's been a bit disheartening for Olson to see Monroe's borrowing needs fall in the middle of one of the financial world's most troubled times.
"The budget is in the best shape it's been in years," he said. But "the bond market is just terrible."
Olson said the district could try again and seek a lesser amount for a shorter term. However, he said there's no guarantee that will work either.
Instead, he is working with Wisconsin Community Bank to secure about $2.5 million for the district at an interest rate of about 3.75 percent. The amount is enough to cover the district's needs.