PONTIAC, Mich. - The Pontiac School District may ask for a state loan or an advance on special education funding to maintain cash flow, The Oakland Press reported.
Anticipating it could overspend its revenue by up to $6.5 million, and with its fund balance already allocated, the district will have to make cuts and borrow money to cover operational costs, The Press reported. Felix Chow, interim deputy superintendent of finance and operations, said that declining enrollment is a factor, but also that the district did not achieve the savings it anticipated through contract negotiations or sale of property, The Press reported.
The district will attempt to borrow money from the state in November, if available, and may ask Oakland Schools for an advance on federal special education funding, though typically those payments are made on a reimbursement basis, according to The Press. An advance payment would reduce Pontiac's borrowing costs, Chow said.
The Oakland Press, "Pontiac school officials hope loans are available," Oct. 22, 2008
Michigan Education Report, "Detroit not the only school district seeing red," June 30, 2008