Connellsville seeks line of credit
Connellsville School Board held a special meeting Friday to approve a more solid resolution approving the establishment of a more than $16 million tax anticipation line of credit at PNC bank through the state.
According to Solicitor Linda Cordaro, the board approved the line of credit in November, but the bank did not think the wording was specific enough.
“The bank and the Department of Education required more specific wording and language,” said Cordaro. “Also, the loan itself is going through the bank (PNC) and it’s not sponsored by the Department of Education as was worded in the November resolution.”
According to interim business manager, Gene Cunningham, the district received the documents last week from PNC, but after the proper officials had signed and sent the papers back, PNC called and said it was worried the Department of Education wouldn’t accept the original motion.
“So we called this meeting because we needed to get those funds to cover our expenses,” said Cunningham.
According to Superintendent Gerald Browell, although this line of credit is approved, it would not keep the district from closing the schools on Jan. 16 if the state does not pass a budget soon.
“We haven’t received $11.1 million in subsidies that we should have gotten up to this point and we’ve spent the $5 million in our fund balance as well as $2.2 million from another loan, and that money is now gone,” said Browell.
“This (line of credit) is needed because we’re out of money and we have to meet payroll next week,” he added.
The district will draw down $6 million from the line of credit next week and the will probably have to draw down another $6 million later.
“Our payroll is $1.2 million every two weeks on top of all our other expenses,” said Browell.
The interest on the money borrowed is supposed to be paid by the state, according to a proposal made by Gov. Ed Rendell earlier in the year.