School Board OKs backup funding source, but questions arise over covering virtual program
Like all school districts, the bills for operating the Northern Ozaukee School District come in throughout the year.
Tax payments, the district’s main source of revenue, are not that regular.
Acknowledging that cash-flow reality, the School Board approved securing a $3 million revolving line of credit last week with Port Washington State Bank.
The district will be charged 3.25% interest on all the money it draws from the account during the 2015-16 school year.
The money is used on a short-term basis as needed, and is repaid as other revenue becomes available to minimize interest payments.
Setting up the revolving loan is a routine step in the district’s financial operations, and part of what officials termed a collaborative relationship they have with the local bank.
While arranging the line of credit has become routine, there were questions from several board members about the second component of the loan.
The board’s action also included securing $2 million in credit for Wisconsin Virtual Learning, the virtual charter school the district oversees independently of its brick-and-mortar facilities.
The virtual program reaches students from around the state, and relies heavily on students using laptops and the Internet to follow lesson plans and keep in contact with teachers.
Although the line of credit for the virtual school does not reflect a change, board member Kendall Thistle asked why the board was involved in securing credit for a program that is intended to be self-sufficient.
“At some point, will WVL be able to secure its own line of credit?” Thistle asked.
“It is a liability the taxpayers are being asked to take on.”
Board president Paul Krause said the virtual program is working on such a step toward complete independence.
“The virtual school has a difficult business model, because it has expenses but doesn’t receive a dollar from the state until the end of the school year,” Krause said.
If the issue is seen as a major concern, he suggested the board include the credit requirement as part of the virtual school’s next long-term contract with the district.