As previously reported, TCRC had been unable to secure revolving and year end lines of credit with our bank as in previous years. These lines of credit are necessary to make payments on behalf of the regional center during times when TCRC funding is delayed from the State and/or when the signing of the State budget is delayed.
Previously, we reported that we had enough cash on hand to pay for all services up until June 17 and could pay all bills until the July 17 billing date. The funding has been approved by DDS, just not the cash on hand to pay vendors in a timely manner.
Given the instability in the State’s finances, our bank has required assurance from DDS in the event the regional center were to default on the credit line. DDS and our bank have agreed to language in a “side letter” that has been under negotiation for the past month. Execution of this letter paves the way for our bank to establish the credit line. This line will prevent a cash flow crisis for the rest of the fiscal year ending June 30.
Additionally, DDS has requested TCRC’s specific cash needs with regards to payment on the April claim. DDS is working with the regional centers on individual cash flow needs. We are expecting partial payment of our April claim soon.
We are hopeful that these measures will avert a cash crisis and bridge the gap between the end of FY 2010/11 and the beginning of FY 2011/12 until the state budget is signed.