Hart District Prepared

The State has announced that funds which school districts had expected to arrive Friday will be deferred until July 30. The Wm. S. Hart High School District was expecting to receive $13.4 million, the last payment for the 2008-09 fiscal year, but will have to wait another three weeks for the funds.

The Hart District anticipated the delay and has issued $12.9 million in Tax Revenue Anticipation Notes (TRANs) to help with cash flow as State funds continue to arrive late. “We will be able to meet our payroll and our other current expenses,” explained Sue Guthrie, the district’s chief financial officer, but the deferral will cost the district in interest on the TRANs.

The first apportionment for the 2009-10 fiscal year is also due in July, but the State has notified school districts that just over half of that first payment will be deferred until next October. The district has received some $2 million in federal funding for its special education programs, which will help cover some of the district’s operating expenses while it waits for the deferred State funding.

“We currently have $3.1 million in the bank and $12.9 million in borrowed TRANs funds,” Guthrie explained. “We have expenses of $12 million a month, so when the State defers money it owes us, it makes it difficult for us to pay for our day-to-day operations.”

The district has resorted to TRANs and inter-fund borrowing to meet its staff payroll and other obligations while it awaits the deferred State funds. The district is also dealing with reduced State funding and is negotiating with its employee unions to make up those projected shortfalls through such measures as increased class size, shortened work year, and a cap on benefits.