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updated: 1/31/2012 2:36 PM

Despite spending cuts, District 37 needs short-term loan

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Despite curtailing spending, Gavin Elementary District 37 officials say they will need to take out short-term loans to make their cash last through the end of the school year.

However, officials say the amount they'll need is $200,000 to $300,000, down from the $800,000 in loans district officials pulled last spring.

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"For the fourth year in a row, we are trending downward in the amount of (loans) we are obtaining," said District 37 Superintendent John Ahlemeyer. "Four years ago, we took out $1.2 million in loans."

The short-term, low-interest loans -- called tax anticipation warrants or TAWs -- are available for school districts to use, then repay when estimated tax revenue is obtained from the state.

Ahlemeyer said the reason for the loan is because state revenues from property taxes are not equaling what it costs to run the Ingleside-based district.

The district has an operating budget of $10.5 million, he said.

"We've done what we could to get to this point," he said. "We've had a two-year teacher contract freeze in place and did cost cutting about three years ago. We have not cut any major programs or had any layoffs and have been trimming where we could."

Ahlemeyer said teachers agreed to the contract freeze earlier this year as a way to reduce overhead costs. In addition, an executive board committee was put in place to review all costs and recommend reductions where possible.

"We have done a real nice job getting to this point," he said. "Taking out TAW's is never a good idea so we definitely don't want to be in this position, but the interest rates on them are low right now, so if there was ever a time to do it, this would be the time."

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