That’s the district’s share of the $1.3 billion being repaid
The Osseo School District has begun receiving payments from the state for the funding that was deferred to balance the state budget.
The first payment of $8.2 million came Dec. 15. By June 30, the state is expected to repay about $31.5 million it “borrowed” from the Osseo Area Schools, according to Kelly Benusa, the district’s business services director.
The state is catching up partially in its payments to school districts due to an improved short-term budget forecast that allows it to pay back $1.3 billion of the $2.4 billion it owes districts. By law, the better-than-forecasted revenue must go to the schools.
But Benusa made it clear that this money doesn’t represent extra revenue. That’s because the state required districts to count the money as having been received as revenue for the year, even though the payment was delayed.
“Our fund balance showed that it was quite healthy, but then when we compared that with our cash on hand, it was quite different,” Benusa said.
Nevertheless, the payments will reduce some of the pressure on the district.
“It gives us a little more flexibility in our cash flow,” Benusa said. “So we have a little bit more ease in paying our bills on time, and we don’t have to borrow from outside sources, and we don’t have to manage our cash to such a constraint as it was before.”
The Osseo district has managed to avoid borrowing money to cover cash flow needs, but many districts in the state haven’t been so lucky.
In addition to improving cash flow, having the money on hand will allow the district to earn interest on it as well. But the $25,000 interest it expects to earn by June won’t have much impact on its $218 million general fund budget.