CONYERS -- For the third time in four years, Rockdale County Public Schools will borrow money to avoid a year-end deficit.
The Rockdale County Board of Education agreed during its monthly work session Thursday night to borrow $8.5 million on a tax anticipation note. Board members Wales Barksdale and Katrina Young were not present at the meeting.
RCPS also borrowed a TAN in 2011 and 2009, for $6 million each.
RCPS Superintendent Richard Autry had asked the board to approve the TAN again this year, but at a greater amount.
"Rockdale County Public Schools require a TAN to cover the current expenses of the school system," he said. "We have estimated the cash flows for the system and determined that a temporary loan of $8.5 million is required."
A TAN is a short-term loan that is borrowed in anticipation of collecting taxes in the future.
The school board recently adopted a millage rate of 24.5 mills for the year, the same rate as last year. RCPS Chief Financial Officer Lee Davis previously said that taxes received this year will be a 4.6 percent drop, or more than $2.6 million, from the previous year.
RCPS is otherwise a debt-free school system, which has been a point of pride for the system, as that is not the case for many other governmental institutions, board members have said.
The system will have to pay $23,138.87 in interest if the TAN is paid off by Dec. 31, 2012, when the loan will mature.
The TAN is expected to be borrowed from SunTrust Robinson Humphrey at a fixed rate of .98 percent; RCPS borrowed from the same company last year and officials said then they were able to secure a low rate since that is the firm RCPS uses for its checking account.
In 2011, RCPS paid .884 percent interested, and in 2009, it paid 2 percent on the TANs.
Davis said the system plans to receive enough revenues to pay off the loan early, as it did last year, when it paid off the $6 million loan 24 days early to save more than $5,000 in interest. Davis said he expects the interest expenses will be less than budgeted for this loan too.