The school board approved a $13.5 million borrowing measure on Thursday night to balance its 2018-19 budget and avoid laying off 120 employees.
School board members voted 7-2 to approve the loan which carries an estimated 3.5-percent interest rate and will be paid over a five-year period. The district will pay an estimated $964,503 in interest, according to officials.
The school board appeared opposed to the controversial “sale and leaseback of existing textbooks” earlier in the month. Some called it a one-shot infusion of cash that will put the district in a bigger hole for the 2019-20 budget.
Others worried about where the district would find the funds to make the average annual $2.33 million payments.
“We have exhausted all remedies,” said business administrator Richard Matthews explaining the loan is the only way to get to a balanced budget.
Superintendent Eileen Shafer warned board members in mid-March, the district would have to layoff 120 staff members if the loan failed. There are 25 classrooms with over 30 students; that number would jump to 100 classrooms with over 30 pupils if the loan failed, she told the board.
School board members spent little time discussing the loan on Thursday night. School board members Manny Martinez and Jonathan Hodges inquired about the interest rate for the loan.
Interest rate is determined in the market, said district officials.
School board members voted on two resolutions.
First resolution awarded a contract to Educational Funding Sources of Leonia to serve as program manager to gather an inventory and conduct a valuation of district textbooks. The consulting firm gets 1-percent commission or an estimated $100,000 that is covered by the loan.
Second resolution approved the financing plan.
The first resolution was approved in a 6-2-1 vote. Vincent Arrington, Manny Martinez, Nakima Redmon, Flavio Rivera, Joel Ramirez, and Oshin Castillo voted in favor. Hodges and Kenneth Simmons voted against while Emanuel Capers abstained.
The second resolution was approved in a 7-2 vote. Capers, Arrington, Martinez, Redmon, Ramirez, Rivera, and Castillo voted in favor while Hodges and Simmons opposed.