Tax Revenue, Efficiencies Increase Fund Balance at Trenton Public Schools

The Trenton Public School district's fund balance increased by about $62,000 recently, according to Gail Farrell, district business manager.

Additional funds were made possible by additional tax revenue, efficiencies in district transportation and retirement reform.

The fund balance was increased to about $2.5 million.

While the fund balance is currently high, compared to previous years, a lack of cash flow might force district officials to seek a low-interest loan from a local bank to pay for costs including payroll.

Farrell said, for the past two years, the district has borrowed money from Monroe Bank and Trust.

The district borrowed $2,960,000 for the 2011-12 school year and $4,000,000 for the 2012-13 school year.

Farrell said the district seeks loans instead of borrowing from the Michigan Department of Education because the offered interest rates are lower through local banks.

TPS paid 1 percent interest on a 12-month loan to make payroll in 2011-12 and 1.10 percent on a 12-month loan in 2012-13. The district will pay a total of about $73,600 in interest on both loans by August 2013.

Farrell said borrowing money is not ideal, but is a neccessary for many districts to cover costs.

"The money is not just to cover payroll, but all the bills that come due," Farrell said in an email.

Farrell said she plans to present the budget for the 2013-14 school year at the next Trenton Board of Education meeting set for 6:30 p.m. March 25.

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