ilbegone
10-20-2009, 11:20 AM
San Bernardino County considers new budget solution
October 19, 2009
By IMRAN GHORI
The Press-Enterprise
San Bernardino County supervisors are considering staving off $37.1 million in state budget cuts with a proposal to sell off the debt the county is owed by the state.
Under the state budget approved in July, the county lost $36 million from its general fund and $1.1 million from its library budget. The state pledged to pay back the money plus interest in 2013.
The proposal calls for a joint powers agency, which plans to sell bonds, to make up for the loss with its purchase of the state debt. The agency will collect the money owed later, plus 2 percent per year interest from the state.
The Board of Supervisors will vote on the proposal at its meeting today.
The arrangement saves the county from having to make any cuts as a result of the state's one-time borrowing, said Gary McBride, deputy county administrator.
"We wouldn't take that cash flow hit that would otherwise occur if they took the money outright," he said.
The county would get the full amount in two payments over the fiscal year, in January and May 2010.
"Effectively, it's going to be seamless for us," he said.
The California Communities joint powers authority, sponsored by the League of California Cities and the California State Association of Counties, was authorized by the state Legislature as a tool to help cities, counties and special districts deal with the 8 percent borrowing of property taxes. The bill still is awaiting approval by the governor.
All but one of the state's 58 counties have enrolled in the program, as have 352 cities and 707 special districts, the organization's Web site states. Riverside County has enrolled along with several cities in the Inland counties.
The strategy is different than one considered by Redlands in July, which proposed its own joint powers authority and shifting funds around to address a $2.5 million budget shortfall.
October 19, 2009
By IMRAN GHORI
The Press-Enterprise
San Bernardino County supervisors are considering staving off $37.1 million in state budget cuts with a proposal to sell off the debt the county is owed by the state.
Under the state budget approved in July, the county lost $36 million from its general fund and $1.1 million from its library budget. The state pledged to pay back the money plus interest in 2013.
The proposal calls for a joint powers agency, which plans to sell bonds, to make up for the loss with its purchase of the state debt. The agency will collect the money owed later, plus 2 percent per year interest from the state.
The Board of Supervisors will vote on the proposal at its meeting today.
The arrangement saves the county from having to make any cuts as a result of the state's one-time borrowing, said Gary McBride, deputy county administrator.
"We wouldn't take that cash flow hit that would otherwise occur if they took the money outright," he said.
The county would get the full amount in two payments over the fiscal year, in January and May 2010.
"Effectively, it's going to be seamless for us," he said.
The California Communities joint powers authority, sponsored by the League of California Cities and the California State Association of Counties, was authorized by the state Legislature as a tool to help cities, counties and special districts deal with the 8 percent borrowing of property taxes. The bill still is awaiting approval by the governor.
All but one of the state's 58 counties have enrolled in the program, as have 352 cities and 707 special districts, the organization's Web site states. Riverside County has enrolled along with several cities in the Inland counties.
The strategy is different than one considered by Redlands in July, which proposed its own joint powers authority and shifting funds around to address a $2.5 million budget shortfall.