WatchSonoma Watch

Cotati-Rohnert Park schools told to stop borrowing to meet payroll



The Cotati-Rohnert Park school district must stop borrowing from bond funds to meet payroll and cash demands, say county officials who have financial oversight over the struggling district.

For at least two years the district has met payroll demands by tapping interest revenue on the $4.5 million that remains unused from the sale of $85 million in bonds passed by voters in 1990.

“For the last couple of years, as the state has deferred the general, unrestricted dollars and increased the deferrals every year, we basically run out of cash in the general fund in April, so we have been borrowing bonds,” said Wade Roach, chief financial officer of Sonoma County’s third-largest district.

When state payments come in, the bond fund is repaid, Roach said.

Roach and Denise Calvert, deputy superintendent of the county Office of Education, agreed that maneuver must stop if the district is to emerge from a financial quagmire that has landed it on a state watch list.

“It was legal,” Calvert said of the borrowing. “The bond money generated interest earnings, so they transferred the interest money to the general fund. It’s OK to do that, but the problem was it’s one-time money so the whole thing just snowballed on them.”

The borrowing has allowed the district to weather the temporary shortfalls caused by the state delaying scheduled payments — a strategy the state uses to deal with its own money woes.

District officials are scheduled to meet with IRS representatives to review the unused funds from the 1990 bond.

“The issue is we really need to spend bond funds,” Roach said. “The fact that there is a fiscal crisis doesn’t negate that there is an assurance that the board gave the public when they issued the bonds. Part of those assurances is that those funds would be used for capital projects in the district.”

“It’s horrible timing but got to be done,” he said.

The cash problem has squeezed the district from many fronts. Because of it’s negative financial rating, it cannot apply for a so-called bridge loan that many districts seek when the state regularly delays payments to districts throughout the state.

County Superintendent of Schools Steve Herrington warned the board this month that it must increase its reserve level to at least 3 percent of its budget because the county can’t guarantee loans to meet immediate cash needs.

“The 3 percent reserve is imperative for the district to remain solvent and avoid state receivership,” Herrington wrote.

“I basically put them on notice,” Herrington said. “We have to be able to stay solvent ourselves and (for) the other districts we support and I couldn’t have them bring us down as well. I couldn’t let them drop below 3 percent.”


11 Responses to “Cotati-Rohnert Park schools told to stop borrowing to meet payroll”

  1. Pearl Alquileres says:

    Abolish the CTA. If their members want to continue to support a “CTA PAC”, fine. But there is NO VALID reason they should have ANY say in their pay or benefits. It’s a “GOVERNMENT JOB”! Compensation should be based on what the free market pays NOT the other way around.

  2. Ricardo Sorentino says:

    RE: Reason – ” CA has a very high ELL and Special Ed population that the federal government has mandated programs for.”

    And just why does California, and Sonoma County, have such a high ‘ELL’ population? Can we say ‘welcome all illegal immigrants.. we’ll support you, feed you, house you, educate you, provide your medical care and look away when you break additional laws, like driving without a license and car insurance, thus allowing you to afford to further bring in your large, extended families.

    The pro-liberal left that wants all the above, also wants to now cry, screaming for more and higher taxes and fees, so they can keep the cycle going. Future Democratic voters, don’t you know, so lets spend the bulk of our limited educational resources on ELL students; so what if it’s at the expense of the non-ELL students and school districts and local governments are going bankrupt.

    Makes me feel all warm and fuzzy, knowing the good that we are doing for those less fortunate. Of course, that means we’re making our non-ELL students less fortunate and less successful then their counter-parts in other states; sure hope the pay-off was worth it.

  3. FedUp says:

    The teachers and their union hacks were the first in line to oppose prop 187 when taxpayers, fed up with their hard earned dollars going to educate children of illegals who have no business being here in the first place tried to get a handle on the situation. Now the chickens are coming home to roost and guess whose first in line begging for more tax dollars? Cry me a river. You made your bed now lie in it.

  4. Originalist says:

    Breaking the law of least resistance! The idea of robbing Peter to pay Paul, the failure of schools and govt to get illegals out of our schools and country, the trashing of the Constitution in our courts, and one excuse after another, all point to a nation in decline that cant afford the standard of living it had in the past! So it spends what it doesnt have! Forgetting that schools are responsible to the people first, not the teachers, employees, etc.

  5. Better Times Coming says:

    @ Reason

    I understand that there are some dedicated teachers in your District who do try to teach and work in a difficult situation. But, and there is always a but, there is too much money spent on special ed, the large minority population present special problems and issues for the districts and the management of schools in California has become in too many cases incompetetent and too political.

    However, a major problem in how our kids have been let down in the attitude of the teachers and their unions. They have spent millions in Sacramento and at the federal level to protect their jobs like they were teamsters. They were support to be professionals, not rank and file union members who couldn’t be layed off and senority alone determines who stays. Compentency should be the defining factor, not how much time you put in the classroom.

    That is why the credibility of teachers suffers and their status will continue to fall as long as they persist with a trade union mentality.

    Trade unions have a place, but it is in the private sector not the public sector where the unions “negotiate with the board” they put in office.

  6. Reason says:

    Responding to the comment by better times coming, the teachers in CRPUSD are the most dedicated teachers you will find. Your sad comment makes it seem as though CRPUSD teachers are incompetent. We are far from it. We are dedicated and doing everything we can to help kids move ahead in this world. Your comment about funding is very skewed as well. CA spends more overall because we have the most kids. Our per pupil spending in CA is the lowest of any state. School funding is weak in this state. For the number of kids we have, we just dont have the money to educate what is the most diverse group of kids that any state has to deal with. Travel to other states and you will find that they dont have to beg parents for supplies and kleenex. They have working computers and libraries. CA has a very high ELL and Special Ed population that the federal government has mandated programs for. The feds just dont want to pay what they have promised. In our district, we are blessed with a tremendous Special Ed department, but it is woefully underfunded by the feds and state, for what they require of us. The other thing to remember is that Petaluma and Santa Rosa are both given twice as much money per student as CRPUSD is. We are still labeled a “rural” district, so we get rural money. That is what everyone should truly be raising cain about, not teachers and how this is our fault.

  7. Phil Maher says:

    The CRPUSD has known about this problem for years. Based on this report from 2009, the accounting for transfers between funds has been obscured in what appears to be a deliberate attempt to disguise the extent of the misallocation of assets that were earmarked by statute to other uses (when one legal opinion doesn’t give you what you need, simply get another). And from what I gather, the General Fund has been frequently supplemented, if not primarily sustained, by transfers of bond principle through the RRMA account. The voters, taxpayers and bondholders have been duped. The accounting and accountability is beyond atrocious, possibly bordering on criminal, and certainly not in any manner forthcoming or transparent enough to give a honest snapshot of the real financial state of the district. Time for a comprehensive, third-party, external audit. It’s no wonder the district is in a state of ruin. Heads should roll!

    Read this…see what you think-


  8. Chucky says:

    I already jumped ship with my kid. Now were sitting on the beach watching this ship sink. What happens next? Do they close schools, fire teachers or stop maintaining the schools. I thought the blame would fall on the superintendent but according to B.T.C. its the unions fault. Never blame the managment always blame the worker.

  9. Dogs Rule says:

    No business can continually borrow money to meet payroll obligations. That’s why business people tend to understand finance 101.

  10. Better Times Coming says:

    Why continue to pump money into a failed school system here in California and this is just another example? Why not hold those responsible for failing, the teachers and their unions. We spend more money on education than 48 other states, but we are at or near the bottom when it comes to academic achievement.

    Hold those responsible for this, the teachers, and get rid of the teachers who don’t do their jobs. It is time for a change and don’t allow our kids to pay for teacher incompetence.

  11. Ricardo Sorentino says:

    So, parents of students in the Cotati-Rohnert Park School District, it’s obvious that the clock is ticking and it can’t be long before the state takes over the district. Where does this leave us with our students? Do we stick it out until a total collapse, or do we transfer our students out to a school district that is on a more financial footing? If we can’t make payroll, then how do we pay for classroom supplies and upgraded equipment? On the first day of the upcoming school year, do we sent our students to school with a case of Kleenex and TP? Maybe an envelope of cash for the superintendent?

    Speak up, parents; what do you think your plan is to further your child’s’ education? I know I don’t want to be the last one on the Titanic.