SAN FRANCISCO — The Natomas Unified School District in Sacramento County, Calif., missed a deadline last month that triggered the process for a state bailout.

The 12,000-student district, which is facing an $8.9 million shortfall for the next two years, missed a Nov. 30 deadline to show the California Department of Education it could muster enough cash to stay solvent.

Now the process has begun to find a local lawmaker to offer a bill to the state Legislature for an emergency 20-year loan to bailout Natomas, which would result in a state-appointed administrator overseeing the district.

"To put it simply, we are spending more dollars than we are getting," district superintendent Bobbie Plough, appointed four months ago, said in a recent online video. "By this coming summer, there will not be enough cash to pay bills or meet payroll."

Plough said the district, which is the fifth largest in Sacramento County, needs employees to agree to a 7.9% pay and benefits cut to stay solvent. The district has been negotiating the reductions with unions for the several months.

State officials have been alerted that Natomas will be seeking the loan, said Tim Herrera, a spokesman for the county office of education.

Herrera said a "multitude" of fiscal problems have caused the district's financial crisis, including delayed budget cuts, overestimating revenue from taxes and student attendance, and lower property values in the area.

He also said the county does not have any other districts facing a similar crisis.

"It's kind of like moving an iceberg," Herrera said of the six-month process to apply for the state loan.

Herrera said the county office of education, which oversees the budgets of the county's 13 school districts, has had Natomas on a watch list for the last two years.

If the district gets employees to agree to the pay and benefit cuts, Herrera said, then it could back out of the takeover process.

The district has $196 million of outstanding debt, according to Bloomberg LP.

Standard & Poor's has an A underlying rating on the district's long-term debt with a negative outlook and Fitch Ratings rates it A-minus on a negative watch.

If Natomas goes into receivership, it will become the ninth district under California's control, according to the Sacramento Bee newspaper. Other districts that have been taken over in the last decade include those in the cities of Vallejo, Oakland, and Richmond.

As part of the state takeover, the emergency loan will have to be paid back with interest and the district will also be on the hook for any costs related to the takeover.

Natomas will also have to pay for a new study on its fiscal solvency that would be conducted by the state every six months.

As a condition of the loan, a state administrator would have power over the school board and the superintendent. The administrator would have powers that could help impose changes on the collective bargaining agreements with the district's unions.

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