Stacey Klim: Indian River School District, FL, Needs a $ 10 Million Bond for Short-Term Payroll and Operating expenses.


At the October 23, 2018 School District of Indian River County Board Business Meeting, the Board voted to approve a $10 million Tax Anticipation Note (TAN). A TAN is essentially a bond that is issued to finance a short-term need before receiving tax revenues.

In this case, the school district needs the money for payroll and operating expenses.

The property tax revenue won’t be coming in for a couple of weeks and the school district apparently can’t pay the bills until then. A few other school districts have also used a TAN this year to pay their bills.

Dr. Rendell tried to assure the audience that this wasn’t due to mismanagement of funds or poor budgeting, that it was the result of the funding cycle that creates a feast or famine pattern of revenue.


But I question his statement.

The School District has no Chief Financial Officer. He has been out for months now and there is no job listing to replace him. In the meantime, the finance department is in flux and I know I can’t get my questions answered. Is anyone getting answers?

Additionally, how can we get correct figures if no one understands the budget and how it works?

Dr. Rendell has been unable to answer a lot of budgetary questions. Budgeting is a responsibility to ensure there is money to pay the bills.  If you know you have “X” amount of money and “Y” amount of expenditures, you budget accordingly. With tax revenues coming in within the next couple of weeks, it seems to me a big short sighted to go to this extreme.

Where does this $10 million go?

Writing Where Does All the Money Go? on a blackboard

There are a lot of fees and interest involved in this bond. Here is the breakdown provided by the school district:

$10,000 to the Note Counsel
$1,750 to the Note Counsel for expenses
$5,000 to the School District Attorney
$8,000 to the School District Financial Advisor
$1,750 to the School District Financial Advisor for expenses
$2,500 to the Wells Fargo (bank) attorney
Interest will be approximately $51,333

This is a total of $80,333 in interest and expenses.

The rest, approximately $9,920,000, will be used for cash flow deficits of the general fund and working capitol revenue (according to Dr. Rendell).

I’ll be the first to admit that I don’t have any experience with TAN’s. After doing some research, reading the documentation in the school board meeting agenda and listening to the school board discuss it, here is one of my main concerns about this TAN, and something Mrs. Zorc also questioned.

TAN’s require specific expenditures to be listed. Proceeds from the TAN cannot be diverted to other projects or expenses other than the ones listed. In this case, there was no specific cash flow analysis given. It’s unclear where this money will go and how it will be used. This is troubling to me and should be troubling to you also as taxpayers.

It was mentioned that some of these funds would be used for payroll. I surely don’t want employees to go without their pay and benefits. They should not be punished. But it would be imperative that this was in the agreement so we know for sure that is where the money is going. Without clear guidelines about what this $9+ million will be used for, I would have to agree with Mr. Searcy and Mrs. Zorc and vote no.

Mr. Frost indicated that this road needed to be taken since last year they passed a budget with more expenditures than revenue.

Again, I have grave concerns about how the school board budget has been handled over the past few years. There is a history of passing budgets in this school district that don’t line up. Being fiscally conservative also means ensuring balanced budgets.  This is something I believe strongly in.

If we don’t have extra money to spend, we shouldn’t be spending it.

The first order of business is to put the Chief Financial Officer in position. We can’t move forward without a CFO.



Publisher’s Note:

Stacey Klim was a candidate for the School District of Indian River County School Board / District 4.

This article has been published for information purposes and does not constitute an endorsement.

3 thoughts on “Stacey Klim: Indian River School District, FL, Needs a $ 10 Million Bond for Short-Term Payroll and Operating expenses.

  1. I firmly believe, had Carter Morrison not been thrown under the bus by Rendell, this situation would either not exist or not be as dire. Mr. Morrison is excellent at his job, regardless of what Rendell world have the public think. It is why they have failed to find any evidence of wrongdoing.
    At least we have one potential board candidate willing to ask questions!

  2. In flux, all right– a “cluster flux.” Let me explain it this way. It’s like a payday loan. And if the term is, as stated, “a couple weeks” the interest and fees are equivalent to putting it on a credit card — 21% APR.

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