College will have to use reserves to pay salaries and bills through the end of fiscal year.
Taft College will tap into its reserves to finish paying the salaries and bills through the end of the current fiscal year.
The board of trustees last week approved pulling $663,000 from reserves at the same time the district awaits word on how hard it will get hit by Gov. Jerry Brown’s May budge revise.
New Supt./Pres. Dr. Dena Maloney reminded the board that TC took only a $110,000 hit at the beginning of the year thanks to a waiver for small colleges that softened the blow.
However the “February Surprise” dinged the college with a one-time $553,000 cut.
“We need to have $663,000 to cover that amount,” Maloney told the board. “We hope to mitigate some of this and not have to draw down the entire amount.”
Maloney, who began work on May 1, said she’s been busy.
“It’s been a busy week and a half,” she said. “I’ve been to a number of functions that have given me a sense of the energy and passion that you all have for Taft College.”
She said she’s hard at work “figuring out some projects.”
Trustees also approved a resolution authorizing the district to borrow money for cash flow purposes until twice-a-year tax revenue arrives.
“The idea is to smooth cash flow,” said Ron Errea, vice president of administrative services. “Property tax revenue arrives twice a year – in the fall and in the spring, but our payroll is every month.”
He said the sale of tax and revenue anticipation notes – commonly called TRANS – will prevent cash shortages.
The board was asked to approve $6 million in TRANS, but much less actually will be needed, Errea said.
“This year it’s roughly $2.5 million that we will need, but we ask for something higher in case we need it. We’ll pay it back at the end of the year.”
The use of TRANS by school districts is a common practice.
Gov. Brown this week proposed deep cuts after California’s deficit jumped to $15.7 billion and warned of more cuts ahead if voters fail to approve tax increases in November.
Education will take a $1.5 billion hit plus more deferrals, which postpone revenue approved for schools.
Brown said education gets another $5.5 billion cut if voters reject the tax proposals.