LIVERMORE FALLS — Monday night, Nov. 23, Regional School Unit 73 directors approved changes to financing for Phase II of the Siemens Project and a Tax and Revenue Anticipation Note (TRAN).

For the Siemens project, the original amount of more than $1.89 million in financing was lowered to almost $1.78 million because a lease purchase agreement cannot be made for more than the actual cost of the agreement, Superintendent Scott Albert wrote in an email Tuesday.

“The second piece had to do with the first payment,” he wrote. “The first quarterly payment is not due for a full year, in November 2021, and the interest on that full year is greater than the first quarterly payment.”

The district requested all quarterly payments be the same for budgeting purposes, Albert wrote.

“Since the interest owed in that first year is greater than the payment, our principal rises by the difference in the amount. From that point on it is a regular loan with quarterly payments consisting of both principal and interest payments,” Albert wrote.

In an email Wednesday, Albert wrote the annual payments are about $44,000 while interest for the first year is about $60,000 so the difference, about $16,000 will be added to the principal.

The TRAN was unanimously approved to prevent issues with cash flow.

“To my knowledge the district has not had to get one of these (TRAN) before,” Albert wrote. “We are doing so because of the CRF grants and the slowness of reimbursement from these grants.”

The district will receive over $2.4 million in CRF funds but the money must be spent before receiving reimbursement, Albert noted. Some money was received for what was spent in August but not for anything spent since then, he wrote.

“This is 2.4 million dollars not in our regular budget, so we do not just have the money sitting there to spend,” Albert wrote. “(D)espite having a 20 million dollar budget, that money is not just sitting in our bank account.”

The district receives monthly payments from the state for the amount it owes RSU 73 and also gets monthly checks from Jay, Livermore and Livermore Falls for their shares.

“Our worry is that if the reimbursement from the CRF grants continue to drag out, we would not have enough cash flow to make payroll, pay our regular monthly bills or continue to purchase items through the CRF grants,” Albert wrote. “This TRAN is like an insurance policy to make sure we are ready if we get to the point of no cash flow. We may not have to use this money, but want to be prepared if we do.”

 

 

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