Exemptions available for March deferral
Local educational agencies that would not be able to cover payroll because of the coming $2.5 billion March payment deferral can apply for an exemption, the California Department of Education announced this week.
Applications are due to the State Superintendent by Jan. 3 for county offices of education and by Jan. 5for school districts and charter schools.
The March 2011 deferral was part of ABX8 14, signed into law in March 2010. The bill deferred $2.5 billion in K-12 apportionment payments in July 2010 for 60 days; $2.5 billion in September 2010 for 90 days; and up to $2.5 billion in March 2011 for 30 days.
In addition, there remain permanent" statutory principal apportionment deferrals also planned this school year for February, April, May, and June.
AB 1610 deferred an additional $420 million in April 2011 and $800 million in May 2011. Those monies are expected to be paid in July 2011, the next fiscal year.
AB 1610 contained another deferral of $1.6 billion from June to July 2011. But the legislation, which was part of the 2010-11 budget agreement, set aside up to $100 million that may be exempted for LEAs that can prove they cannot make June payroll if subjected to payment deferral.
The CDE reports that LEAs can apply for a "dollar limited" June 2011 deferral exemption by April 1, 2011. The department plans to issue more information on the application in March.
There is no exemption from the February, April, and May deferrals, writes CDE.
As for the March 2011 deferral, the state may move it to February 2011. But according to CDE, "given the limited amount of scheduled apportionments in February, (moving the March deferral) seems unlikely."
To apply for exemption from the March deferral, "school districts must provide narrative and/or documents that demonstrate that the school district has exhausted all internal and external sources of borrowing and will need a state emergency loan if the payments are deferred in March 2011," said a Tuesday letter from the CDE.
The documentation must include a cash flow projection from the months of July 2010 through March 2011. If the district would only need the emergency loan if the deferral was moved from March to February 2011, the narrative must reflect that.
School districts must submit the documents to their county superintendent for review and certification. The county superintendent must then submit completed applications to the Department of Finance and the CDE by January 5.
The authorizing agency of a charter school - a district, county office or the state - must serve as the certification authority for charters looking to meet the same deadline.
Care to Comment?
Send response of any length to: email@example.com. We will publish all appropriate reactions.