Walden loaned $50K for payroll
The Glenn County Board of Education on Monday agreed to loan Walden Academy $50,000 to get them thorough the school year.
School officials said the small charter school in Willows struggles to meet payroll because the state Department of Education defers payment until after the fiscal year closes.
The shortage is not a matter of school solvency but of cash flow, said Glenn County Superintendent of Schools Tracey Quarne.
Walden Academy board President Kelly Lawler said the school, which is in its second year, has not had the time to build the necessary reserves to handle state deferrals on its own. Its only other lending source, Charter Schools Capital, would force Walden to sell its entire receivable at 15 percent interest.
"It's a very expensive proposition," Lawler said.
Instead, the Board of Education agreed to loan Walden $50,000 from the Office of Education's reserve funds at 6 percent interest.
Board President Judy Holzapfel said because the Office of Education is Walden's sponsoring agency, it feels something like new parents who want to help the school as much as possible.
"We want the school to flourish," Holzapfel said.
But in reality, the loan is a good financial proposition all away around, Quarne said.
"Walden won't have to borrow a larger sum of money at 15 percent interest, and the 6 percent the Office of Education will make on the loan is a far higher return than any financial investment we could make at this time," he said.
Walden anticipates repaying the loan in full by August.
Meanwhile, Lawler said Walden is in the process of securing a line of credit with Tri Counties Bank to help cover future deferrals.
She also expects the school to end its second fiscal year with about $35,000 with which to start building a reserve.
The Glenn County Office of Education previously loaned Walden $200,000 to meet payroll and expenses.
The loan was paid back in full, officials said.