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August 21, 2010
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Re-1 worried about cash flow if Amendment 61 passes

GLENWOOD SPRINGS, Colorado - Roaring Fork School District Re-1 officials recently considered a range of options to get ahead of a potential ban on any non-voter-approved debt that would come with passage of Amendment 61.

Of particular concern is that the amendment, if approved by voters in the Nov. 2 election, would do away with the state's interest-free cash flow loan program that is made available to school districts.

Because school districts that are mostly reliant on local property taxes don't receive that revenue until the last quarter of the fiscal year, in April or May, they typically borrow money from the state to meet cash-flow needs earlier in the year.

"Under Amendment 61, the state will no longer be able to do the cash flow loan program," Re-1 Assistant Superintendent of Business Shannon Pelland said at the Aug. 11 school board meeting.

And, any borrowing by the school district, even for cash-flow needs, would need to be approved by voters, per the provisions of the amendment.

"If this passes, we would not be able to meet our cash-flow needs beyond Dec. 15," she said.

She presented several options for the district to consider as a way to get ahead of the potential new restrictions. Included would be for the district to put its own question on the ballot seeking approval for a bond issue or other means to cover cash flow needs, but only if 61 passes.

However, after discussing the options, the Re-1 school board decided to take a wait-and-see approach.

Another option if the cash-flow loan program is eliminated would be to ask the various counties that collect property taxes for the school district to pay a cash advance to the district each fall, Pelland said.

"This is complicated for our district by the fact that we are dealing with three separate counties," she wrote in a memo to the school board.

In the meantime, the district is looking at ways to educate voters about the impacts on local schools that would come with passage of Amendment 61, as well as two companion initiatives that are on the November ballot, Amendment 60 and Proposition 101.

Combined, the measures would cut property taxes, lower the state income tax rate, lower vehicle registration fees and severely limit or in some cases ban government borrowing. The estimated hit to public schools in Colorado would be more than $1 billion over the next 10 years.

"If it passes, it would be a strong statement that we need to operate very differently," Re-1 board member Myles Rovig said.

However, district officials also want to make sure voters understand what the ballot measures would mean for local schools if they are approved. The school board is expected to consider taking a formal position against the ballot initiatives at its Aug. 25 meeting.

jstroud@postindependent.com


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The Post Independent Updated Aug 23, 2010 05:08PM Published Aug 21, 2010 12:48AM Copyright 2010 The Post Independent. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.