The school board approved a new loan Wednesday night allowing the district to borrow millions, saying it is the only way to ensure the district can continue to run smoothly.
The district is facing a 20 million dollar deficit. It has already made major cuts to staff and privatized many services.
The interim superintendent says it is not uncommon for a district to borrow money but acknowledges the district is borrowing a record amount of money because of its financial situation.The board approved a 15.5 million dollar loan with a cap of 17 million dollars. The interim superintendent also says the loan will ensure that teachers and students have the resources they need.
The school board president says borrowing is a normal practice and parents should not be alarmed.
"It is happening at the same time as the D.E.P is being reviewed but we need the cash in order to move through October one, so it was important for us to get this through as soon as possible with the understanding that if the D.E.P isn't approved then we won't have the ability to borrow against our state aid," said Flint School Board President Isaiah Oliver.
The district and the state will negotiate the terms of the loan with a bank. School board member David Davenport approved the loan but says he still has concerns about the district's financial health. "I can't say that I really feel like it's back to where it needs to be, on a strong foundation. I still say when you start playing with numbers, and not knowing what interest rates are, you still have a gray area," said Davenport. Davenport is hoping for a good student count this year since state aid is based on enrollment.
The district submitted its revised Deficit Elimination Plan at the end of July to address the 20 million dollar deficit.
The superintendent says he hopes to hear back from the state in the coming weeks.