MONEY MATTERS
What Your Board Needs to Know About Financing At CSDA’s General Manager Leadership Summit, consultants of the CSDA Finance Corporation and a special district general manager collaborated in a presentation providing insight into preparing board members for a financing. Panelists included Pat Kaspari, general manager of McKinleyville Community Services District, as well as consultants from the CSDA Finance Corporation: Rick Brandis and Nicki Tallman of Brandis Tallman, a division of Oppenheimer and Co. Inc.; Albert Reyes of Kutak Rock LLC; Stefan Morton of Municipal Finance Corporation. 38
When it comes to infrastructure projects and large equipment purchases, general managers play a pivotal role in defining the scope of the need and securing the funds to get the job done. When funding for those big-ticket items means identifying the right financing option, it is crucial that the members of the board be educated and informed throughout the process so they feel confident in the decisions they make. While board members may have an understanding of personal loans or home mortgages, few have experience with the type of financing options available to local governments. Keeping an eye toward their responsibility to protect district finances and the pocketbooks of their constituents, board members may approach financing with questions like: “Why do we need to finance?” and “Why can’t we use our cash reserves?” Every scenario is different, and there are pros and cons to paying cash as well as to financing. Some considerations include: the type and size of the project or purchase, the immediacy of the needed improvements, and the district’s fiscal health. Using cash reserves may seem expedient in the short term, it could cost the district more in the long run. In addition, there is an element of fairness to consider before the cash reserves are drained. California Special Districts • July-August 2022
