Treasurer reports Prescott School District financial distress; county asked about short-term bridge loan with state diversion guarantee

County Treasurer Gordon Heimbigner told commissioners on June 2 that the Prescott School District faces a cash shortfall this fiscal year and that the Office of Superintendent of Public Instruction (OSPI) is stepping in with financial oversight. OSPI has proposed a financial oversight committee and asked whether the county would consider a short-term loan, in the $200,000–$300,000 range, repayable by redirecting the district’s apportionment payments.

Heimbigner said OSPI will redirect the state apportionment if the school board passes a resolution authorizing diversion; he advised the board that he would not unilaterally approve a loan without the county commission’s decision. He also said OSPI has been asked to renegotiate existing bank loans and that dissolution of the district is the last resort if the district cannot be made solvent.

Commissioners were cautious about setting precedent for lending to local districts and suggested banks might be better positioned to renegotiate. Commissioner Todd Kimball and others asked for follow-up with OSPI on whether private banks could obtain similar diversion guarantees. Heimbigner offered to report back with more details after further discussion with OSPI.