County treasurer outlines $2.5M credit line for Upper Lake USD; LCOE/FCMAT to monitor finances

The Lake County treasurer told supervisors on Sept. 29 that the Upper Lake Unified School District has sought a $2.5 million advance on future property-tax receipts and that the county can provide the funds as a credit line drawn "as needed," subject to repayment from December and April tax distributions.

"The way the county treasurer will recover those funds if they are borrowed is through the property tax revenues that come in in December and April," Treasurer Patrick Sullivan said, adding that the structure limits the county's upfront exposure and requires the district to pay interest. Sullivan noted county staff had met with the district, the Office of Education and the state's Fiscal Crisis and Management Assistance Team (FCMAT) and raised concerns about high superintendent compensation, debt levels and other fiscal risks.

Denise Shannon, assistant superintendent for the Lake County Office of Education (LCOE), told the board LCOE had disapproved Upper Lake USD's 2026–27 budget and declared the district a "lack of going concern," which triggers a FCMAT fiscal-health analysis and increased state involvement. LCOE and FCMAT will evaluate whether the county advance is an appropriate short-term cash-flow tool or whether deeper intervention is necessary. The treasurer said the county will track draws and, if money remains unpaid, recover amounts from the district's property-tax apportionments.