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RCPS pays off debt early

CONYERS -- Rockdale County Public Schools once again will start off the new year as a debt-free school system.

The system paid off its $8.5 million Tax Anticipation Note in early December, according to Lee Davis, chief financial officer at RCPS.

The system had to use a TAN -- a temporary, short-term loan to cover expenses in anticipation of collecting taxes in the future -- to stay out of the red this school year.

RCPS, which prides itself in otherwise being a debt-free school system, would have operated in a deficit if it didn't borrow the money because most revenues from taxes don't come in until November and December.

The school board recently adopted a millage rate of 24.5 mills for the year, the same rate as last year. Davis previously said that taxes collected this year will be a 4.6 percent drop, more than $2.6 million, from the previous year.

After also borrowing on TANs in 2011 and 2009 and paying them off the same years, the system had not borrowed money in the previous seven years.

The system would have had to pay $23,138.87 in interest if the TAN were paid off on Dec. 31, 2012, when the loan matured. Instead, the system paid it off 24 days early, on Dec. 7, after enough taxes came in, saving $5,553 in interest.

The TAN was borrowed from SunTrust Robinson Humphrey at a fixed rate of .98 percent; RCPS borrowed from the same company in 2011 and officials said then they were able to secure a low rate since it is the same firm RCPS uses for its checking account. In 2011, RCPS paid .884 percent interest of nearly $10,500, and in 2009, it paid 2 percent on the TANs at more than $32,000.

Comments

Dan_Turner 1 year, 7 months ago

It's understandable why so many of the annonymous posters choose to not have anything to say about good news such as this. I saw a nega-comment about the two long term board members that were stepping down at 12-16 years of service to the community and although Rockdale has the highest millage rate....the Schools operate within budget and pay off short term loans like this.

Step to the west a mile or so to DeKalb that is only a few basis points below Rockdale's millage and it's a school system on the verge of losing accreditation and operating under the same scrutiny of bankruptcy as they're $28million in the hole. The School Board in DeKalb seems to have it's own inherent problems of leadership, ego and unfortunate financial distress. So when this county steps forward on bringing in sufficient revenue to operate in the black....rather than suffer public humiliation as other metro counties....it needs to be recognized for the pay-ahead achievement with a surplus rather than the most expensive millage rate in the state of Georgia.

I can guarantee that by the time DeKalb pulls out of it's nose dive it will be too late NOT to raise rates on properties as well as start charging fees to offset various expenses that should be a responsbility of the student-family....not borne of the tax payer. They are and will be in crisis management while Rockdale continues to operate like a business.

Thank you to Darlene Hotchkiss, Jean Yontz, chairman Wales Barksdale and the current and previous board members for structuring this entity and keeping it on track. "I wish the Citizen would post more positive stories like this....and do away with the comments that tend to demean, eviscerate hard working community members while at the same time creating a bigger divide within this growing community."

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