Jessica Cejnar / Friday, Sept. 18 @ 10:40 a.m.
Bracing For $1 Million To Be Withheld To Next Fiscal Year, County Office of Ed Starts Loan Shopping
Bracing for a cash deficit of up to $1 million due to deferred state funding, the county office of education will begin shopping for a loan to ensure its bills and staff are paid.
The Del Norte County Board of Education on Thursday authorized Assistant Superintendent of Business Jeff Napier to seek a tax and revenue anticipatory note, or TRAN, a short-term loan that ensures DNCOE has the cash it needs through the end of the 2020-21 fiscal year.
The County Board of Education also serves as the Del Norte County Unified School District Board of Trustees.
The DNCOE Board’s Thursday decision comes after it authorized Napier last month to seek a TRAN of up to $7.76 million should the state defer district funding from the 2020-21 fiscal year to the 2021-22 fiscal year.
“We’re projecting an up-to $1 million cash deficit for the county office due to deferrals,” Napier told the county board on Thursday.
Though it didn’t include the $13.5 billion cut to education California Governor Gavin Newsom proposed due to the COVID-19 pandemic, the state adopted budget did carry the possibility of withholding $11 billion to the 2021-22 fiscal year if the Golden State didn’t receive more federal relief dollars.
These deferrals are expected to begin in February, according to Napier, and are projected to be paid back in monthly installments through November 2021.
“The adoption of the resolution does not obligate the Del Norte County Office (of Education) to participate in the TRAN,” Napier wrote in a Thursday staff report. “The resolution simply delegates to the administration the right to decide on participation.”
As it seeks a TRAN, the county office could participate in a pooled TRAN through the Califonria School Finance Authority, Napier said. This effort is in conjunction with the state treasurer’s office and could walk DNCOE and DNUSD through the process.
Some school districts have already sought a TRAN, Napier said. At first issuance, those loans carried an interest rate of 0.18 percent.
“Some people couldn’t even start the year without a TRAN,” Napier said. “They had to borrow for June just to get through the summer. The resolution is only if we need it. We’re not going out for funds we’re going to have to pay money (back) for if we do not need it.”
The last time the state deferred education funding from one fiscal year to the next was in the Great Recession in 2008-09, Napier told the DNUSD Board on Aug. 27.