Administrators at the Ballard Community School District plan to rely on a short-term loan program next year - and possibly the following year - as they look to get their budget back in the black.

The school board approved the move at a special meeting Tuesday after hearing from Superintendent Ottie Maxey, who detailed the need for the temporary cash flow.

"There will be points next year, because of our fund balance, where we will have to utilize this program," Maxey told school board members.

When asked if the money from the Iowa School Cash Anticipation Program would be a short-term solution, Maxey said it was, but the district would also likely need to use it again the following year.

"It’ll probably take two fiscal years for us to build a fund balance that will enable us not to need to utilize the funds," Maxey said.

The district has been working to get its financial house in order for the past several months.

Officials have approved an estimated $787,000 in budget reductions for next year, while also terminating nearly 30 full-time equivalent positions and looking for other ways to cut costs.

Maxey anticipates the district will end the next fiscal year - after borrowing the cash to help make ends meet while waiting for state aid and other funding to come online - with a positive fund balance.

But in order to cover expenses during the start of the following fiscal year, before the district receives its state aid, Maxey said they’ll likely need to borrow additional funding through the program.

The Iowa School Cash Anticipation Program is a nonprofit corporation that was created in the mid-1980s to help public schools, area education agencies and community colleges plug temporary cash flow shortages.

The program operates with tax-anticipation warrants, money that will be borrowed from a bank and then repaid as tax revenues are received by school officials.

The warrants are issued with the understanding that the state aid, property taxes and other revenue needed to repay them will be eventually received during the same fiscal year.

"It’s always been the best deal that we had in terms of access to cash," said school board president David Jackson.

School districts need the money for a variety of reasons and can repay the loan at the end of the academic year, or directly following their financial pinch, said Ballard’s business manager, Jan Halverson.

"You may borrow this week because payroll hits and taxes don’t come until next week, and then you can turn right around and pay it back the next week," Halverson said.

The district will have to pay interest on the money during the time frame it’s borrowed, and there will also be a fee to help cover the cost of the program, she said.

The easiest part about using the program is that the district doesn’t have to fill out a mountain of paperwork, as it would when selling bonds or borrowing directly from a bank, Halverson said.

Another benefit is how quickly the cash is made available, she added.

In the past when the district has participated in the program, the cash has been made available within days of the request.

District officials didn’t have an estimate on how much money they’ll need to borrow for next year, but to give an idea of their expenses, Halverson noted payroll alone is $1 million a month.