The Tax Revenue Anticipation Note (TRAN) loan that caused so much confusion in December was a mistake of the bond company, not the result of work not completed by Mariposa County Unified School District officials or the Mariposa County Treasurer’s Office.

Mark Farrell of Piper Jaffray told the board that his company sent information to the County and district, “but forgot to attach an email saying to put it into a separate account.” When the County received the money in July and didn’t have instructions on what to do with it, the treasurer’s office put it into the district’s general operating budget.

Farrell explained how common use of a TRAN loan is for districts and municipalities. He said it happens because of the way in which school districts are funded. The TRAN funds can “bridge that gap with the cash flow shortfall” in the interim, he explained.

Superintendent Randy Panietz said his office did not requistion the funds, and in fact he was glad when he learned the money had been transferred to the County for a better interest. All the while, the superintendent thought the County had the proper instruction from Piper Jaffray. “I did not know the funds had been put in the general fund,” Panietz explained.

The confusion may also be attributed to a simple question of semantics. When Panietz used the term “draw down” the funds, he said he meant making the actual transfer to the district’s general fund. Since he had not done that, he believed the funds were not “drawn.”

Piper Jaffray and Mariposa County understood the terminology different. To them, the “draw” actually began when the board approved the TRAN in March of 2009. The TRAN was funded, or drawn in their understanding, when the County received the funds in July, 2009.

The TRAN money is typically held by a third-party bank, but because the financial markets were so unstable last year, the money was transferred to the County, where it could earn a higher interest rate. Mariposa County Treasurer Keith Williams told the board that it may actually net the district about $10,000 by the time the TRAN is repaid.

Former board member Debbie Peters said from the audience that there was never any money missing. “It just got put in the wrong place,” she said. “It was a mistake.”

Williams told the board that the proper accounts have been established and the school district has earned about $15,000 in interest on the account. He anticipates that the district will make about $10,000 in interest on the investment.

The board also got its annual audit report from Marcia Hall of the Kemper Group. She addressed a number of points in the audit, including how the federal stimulus funds had “pumped up” the district’s federal revenue last year. She said the money had come in before the end of the fiscal year but had not been spent. “It’s kind of a band-aid,” she said, “a one time shot.” Hall said the funds should be used “to bridge the gap” during these tough budget times.

Hall explained how the district has become much more reliant on property taxes as the state’s revenue continues to decline. In fact, property tax revenue made up 55 percent of total income in 2009. The year prior, it was 51 percent.

The district spent more than 86 percent of its total budget on employee salaries and benefits last year, according to Hall’s report. She said that is trend she sees all over California.

“Everybody put a halt on all the spending to spare salaries,” Hall told the board about the current fiscal climate in the state. “That’s what everyone is doing.

Hall said it was a “difficult” audit because the district was without a business manager for so long. She called the vacancy of the position “a huge deal” that “can change the status of your district in one year.” The auditor said MCUSD “had a captain, but no navigator” while the position was empty. “It was a difficult year all around.” She was extremely encouraged to be working with the district’s new Business Manager, Linda Levesque.

As if the state’s budget weren’t enough to worry about, the board also learned that the collection of developer fees continues to decline. Just a few years ago, the district was collecting nearly $1 million a year in fees on new construction. Since the housing crisis hit, that number has plummeted. It fell to $182,000 this year.

California homebuilders put up the lowest number of homes for a single year in 2009, beating the previous low that was set in 2008, the California Building Industry Association announced this week.