ST. CHARLES: STATE AID NOTES FOR 2021-2013

[Shadowninja]

Dearest reader,

Sometimes a breadcrumb does not answer a question.

It creates a much bigger one.

Lady B went digging through Michigan Treasury records for St. Charles Community Schools — from 2018 through 2025.

And something rather interesting appeared in the ledger.

For six years before 2021, Lady B found no State Aid Notes in the records searched.

Then:

2021 — $650,000
State Aid Note
Purpose: "To meet operating cash flow shortfalls."

2022 — $600,000
State Aid Note
Purpose: "To meet operating cash flow shortfalls."

2023 — $837,000
State Aid Note
Purpose: "To meet operating cash flow shortfalls."

Three consecutive years.

$2,087,000 in short-term borrowing issued.

Then?

2024 — none found.

2025 — none found.

So Lady B has a question.

Actually, quite a few of them.

📍 What happened financially at St. Charles Community Schools between 2021 and 2023?

📍 Why did the district suddenly need to borrow against future State School Aid to cover operating cash-flow shortfalls three years in a row?

📍 Why hadn't Lady B found the same borrowing during the six preceding years she searched?

📍 Why did it stop after 2023?

And there is another rather large elephant sitting beside the ledger.

Those three years overlap the period when extraordinary federal COVID education dollars were flowing to school districts across Michigan and the country.

Yes, dear reader, some COVID funding had restrictions.

But that does not answer the question.

📍 What was happening with St. Charles' cash position during those three years that made borrowing necessary?

📍 Where did the district's COVID relief money go?

📍 How much of it was available for allowable operating expenditures?

📍Did those federal dollars replace expenditures the General Fund otherwise would have paid?

📍 And if so, why was there still a cash-flow shortfall large enough to require State Aid Notes three years running?

Then there is the cost.

Borrowing money is not free.

The 2022 $600,000 State Aid Note carried a 1.97% true interest cost.

The 2023 $837,000 State Aid Note carried a 3.46% true interest cost.

What was the total interest paid on all three notes?

What were the issuance costs?

What other professional or financing fees were associated with them?

What did three consecutive years of short-term borrowing ultimately cost the taxpayers of St. Charles?

And now we arrive at November.

On November 3, St. Charles voters are being asked to consider another bond proposal. The district says the revised proposal would levy 3.75 mills and provide more than $10 million for facility and infrastructure projects.

This is a different kind of borrowing from a State Aid Note.

But history still matters when taxpayers are being asked to authorize new debt.

St. Charles did not seek State qualification for this bond proposal.

That is optional.

But without a State preliminary qualification filing, there is no Form 3881 sitting at Treasury for Lady B to pull apart.

And at this point, Lady B has not located publicly released financing particulars showing the complete proposed repayment schedule, assumed interest rate, projected principal and interest, issuance costs, financing fees, contingency assumptions, and other details that would allow taxpayers to see exactly how the proposed debt is expected to work over its life.

So before voters are asked to authorize millions of dollars in new debt, perhaps there are some old questions worth answering — and some new numbers worth putting on the table.

Why did St. Charles need operating cash-flow borrowing in 2021?

Why again in 2022?

Why again in 2023?

Why not during the six years Lady B searched before that?

Why not in 2024 or 2025?

What changed?

What did those three years of borrowing cost?

And what, precisely, are taxpayers being asked to finance this November — not merely in project costs and mills, but in total debt, interest, fees, repayment structure and long-term cost?

Lady B is not answering those questions for voters.

Lady B is asking why voters do not already have the answers.

The ledger remains open.

With receipts and respect,
Lady Budgetdown

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