County’s borrowing power helps district obtain short-term
funding
Unable to borrow money through its traditional sources, the
Hollister School District this year is using the borrowing power of
San Benito County to obtain interim funding until it receives money
from the state.
County’s borrowing power helps district obtain short-term funding
Unable to borrow money through its traditional sources, the Hollister School District this year is using the borrowing power of San Benito County to obtain interim funding until it receives money from the state.
The San Benito County Board of Supervisors last week adopted a resolution authorizing the issuance of Tax and Revenue Anticipation Notes (TRANs) on behalf of the district as a bridge loan of sorts until the district receives its anticipated revenue.
“It’s a short-term funding mechanism,” County Counsel Matthew Granger told supervisors. “The (repayment) revenue source is solely the general fund of the school district,” meaning there is no financial liability for the county.
The school district in previous years has partnered with other districts to issue the revenue anticipation notes, which provide schools with working capital until they receive money from the state. The district this year was not allowed to do that, as it received a negative certification on its second interim financial report for fiscal year 2010-11. State law requires that districts in similar straits must use the county government as the issuing body for the notes.
HSD has requested borrowing up to $5 million, which will be payable no later than 13 months from issuance using tax income or other revenue.
Jack Bachofer, the chief business official for the school district, said HSD has made “significant and painful expenditure reductions” to get its financial house in order.
“We’re doing the right things,” he told the board. “We walked away from the brink.”
Supervisors unanimously approved a resolution authorizing the issuance of the revenue notes.
