§ 100440 Bond Fund Withdrawal Authority

This law lets the finance director take money out of the General Fund to help pay for school building projects, but the money has to be put back later with the interest it would have earned.

Key Takeaways

•The finance director can only withdraw up to the amount of unsold bonds approved for the project.
•All withdrawn money must go into the 1998 State School Facilities Fund.
•When the bonds are sold, the money must be paid back to the General Fund plus the interest it would have earned.

Example

A school district needs $500,000 now to start building a new classroom. The finance director pulls that amount from the General Fund and puts it into the State School Facilities Fund.

After the district sells the bonds it was allowed to sell, it must give the $500,000 back to the General Fund plus the interest the money would have earned if it had stayed in the investment account.

How to Calculate

Return amount = Withdrawn amount + (Withdrawn amount × Interest rate × Time held)

Find out how much money was taken out (the withdrawn amount).
Find the interest rate that the Pooled Money Investment Account pays (e.g., 3%).
Figure out how long the money was held before it is paid back (in years).
Multiply the withdrawn amount by the interest rate and the number of years to get the interest earned.
Add that interest to the original withdrawn amount. That total is what must be returned to the General Fund.

The district withdrew $500,000 and kept it for 1 year. The investment account pays 3% interest per year.

Result: Interest = 500,000 × 0.03 × 1 = $15,000; Return amount = 500,000 + 15,000 = $515,000

For the purposes of carrying out this chapter, the Director of Finance may authorize the withdrawal from the General Fund of an amount not to exceed the amount of the unsold bonds that have been authorized by the State School Building Finance Committee to be sold for the purpose of carrying out this chapter. Any amounts withdrawn shall be deposited in the 1998 State School Facilities Fund consistent with this chapter. Any money made available under this section shall be returned to the General Fund, plus an amount equal to the interest that the money would have earned in the Pooled Money Investment Account, from proceeds received from the sale of bonds for the purpose of carrying out this chapter. (Added by Stats. 1998, Ch. 407, Sec. 16. Approved in Proposition 1A at the November 3, 1998, election.)

This law lets the finance director take money out of the General Fund to help pay for school building projects, but the money has to be put back later with the interest it would have earned.

Key Takeaways

•The finance director can only withdraw up to the amount of unsold bonds approved for the project.
•All withdrawn money must go into the 1998 State School Facilities Fund.
•When the bonds are sold, the money must be paid back to the General Fund plus the interest it would have earned.

Example

A school district needs $500,000 now to start building a new classroom. The finance director pulls that amount from the General Fund and puts it into the State School Facilities Fund.

After the district sells the bonds it was allowed to sell, it must give the $500,000 back to the General Fund plus the interest the money would have earned if it had stayed in the investment account.

How to Calculate

Return amount = Withdrawn amount + (Withdrawn amount × Interest rate × Time held)

Find out how much money was taken out (the withdrawn amount).
Find the interest rate that the Pooled Money Investment Account pays (e.g., 3%).
Figure out how long the money was held before it is paid back (in years).
Multiply the withdrawn amount by the interest rate and the number of years to get the interest earned.
Add that interest to the original withdrawn amount. That total is what must be returned to the General Fund.

The district withdrew $500,000 and kept it for 1 year. The investment account pays 3% interest per year.

Result: Interest = 500,000 × 0.03 × 1 = $15,000; Return amount = 500,000 + 15,000 = $515,000

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 100440 Bond Fund Withdrawal Authority

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References