A school district in Binghamton, New York, sold $4 million in revenue anticipation notes to fill a cash flow deficit ahead of collecting anticipated state aid later this year.
The notes, issued by Binghamton City School District, mature on January 17, 2025, and yield 3.2%. They pay interest at 4.25%. The notes did not receive a rating.
The issuance comes one month before the district estimates its disbursements to exceed its receipts, according to the official statement accompanying the sale of the bonds. The district expects the deficit to begin in February and widen in March to a projected maximum amount of $3.7 million.
The deficit is due to a “lack of congruence between the cash flow needs of the School District and the receipt of the budgeted revenues,” the bond documents read.
Most district revenue comes in the form of state aid, including 64.4% of revenue in the district’s current fiscal year. The district predicts a $1.5 million general fund surplus over the 13 months ending in January of next year, a drop from the $5 million surplus it recorded last year.
The school district said it may renew the notes if it does not receive state aid before the maturity date.
The school district enrolls 4,471 students, mostly in the city of Binghamton. The bonds are general obligations of the school district, backed by its full faith and credit.
Piper Sandler & Co served as underwriter on the issuance. Fiscal Advisors & Marketing, Inc acted as municipal advisor.