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Jersey Shore Area School District cites state budget impasse, will explore TRAN to cover shortfall
Summary
At its meeting, the Jersey Shore Area School District board heard that the state budget impasse has reduced expected revenues and that district staff will seek authorization to work with PFM to explore a tax and revenue anticipation note, or TRAN, as a contingency to cover cash shortfalls.
At its meeting, the Jersey Shore Area School District board heard that the state budget impasse has reduced expected revenues and that district staff will seek authorization to work with PFM to explore a tax and revenue anticipation note, or TRAN, as a contingency to cover cash shortfalls. The recommendation to begin paperwork would be brought back for board approval; officials said the district would not incur costs unless it draws on the instrument.
Dr. Alma, a district official, told the board it should not assume the district was in poor shape: "we are not in a bad financial position. We do have fund balance, and we're using that fund balance eventually as we get to the point where we need additional funds for our regular bills." The board was also told the district is controlling costs while waiting for state revenues to arrive.
District finance staff said investments have declined since last year, reducing interest income. "Last year at Sept. 30, we had $6,400,000 invested. This evening, your investment reports at 4,400,000 dollars," a finance official told the board, noting that the drop reflects a change in short-term investment activity and that reduced interest revenue has cost the district money. The official said the Commonwealth has paid roughly $1 million of an expected $4.5 million and currently owes the district about $1.3 million from 2024-25 allocations.
To preserve liquidity, staff said they will recommend that the board authorize district administrators to work with PFM to explore a TRAN. "It will not cost us a penny until we would actually feed or draw on the money," the finance official said, explaining the paperwork-gathering step would be approved at a future meeting and that drawing on the line would be a last resort.
When asked about timing, the finance official said the district reviews cash projections monthly: "Right now, I feel comfortable saying that we will make it through February. March, it starts to get a little dicey." Local revenue collections were described as holding steady but subject to timing fluctuations tied to quarter-end receipts.
Board members and staff also discussed the budget calendar and the district index for the coming year (reported at 4.8 percent). Officials noted possible legislative changes that could affect district options for exceptions or referenda when a final state budget is enacted.
Votes at a glance
- Approved minutes from Oct. 27 (voice vote; motion carried). - Approved treasurer's report (voice vote; motion carried). - Approved payment of bills (voice vote; motion carried). Board discussed total gross bills of about $6.6 million and noted that after bond-related funds and deferred PSERS employer payments the near-term cash effect on the general fund is smaller (discussed figure: about $3.7 million). - Approved personnel items (voice vote; motion carried). - Approved finance items a and c (item b removed from tonight's agenda) (voice vote; motion carried). - Approved miscellaneous items a, b and c (voice vote; motion carried).
